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Calling upon the Genius of Private Enterprise: The Housing and Urban Development Act of 1968 and the Liberal Turn to Public-Private Partnerships

Published online by Cambridge University Press:  20 September 2013

Alexander von Hoffman*
Harvard University


President Lyndon Johnson declared the Housing and Urban Development Act of 1968 to be “the most farsighted, the most comprehensive, the most massive housing program in all American history.” To replace every slum dwelling in the country within ten years, the act turned from public housing, the government-run program started in the 1930s, toward private-sector programs using both nonprofit and for-profit companies. As a result, since its passage, for-profit businesses have developed the great majority of low-income residences in the United States. The law also helped popularize the idea of “public-private partnerships,” collaborations of government agencies and non-government entities—including for-profit companies—for social and urban improvements. Remarkably, political liberals supported the idea that private enterprise carry out social-welfare programs. This article examines the reasons that Democratic officials, liberals, and housing industry leaders united to create a decentralized, ideologically pluralistic, and redundant system for low-income housing. It shows that frustrations with the public housing program, the response to widespread violence in the nation's cities, and the popularity of corporate America pushed the turn toward the private sector. The changes in housing and urban policy made in the late 1960s, the article concludes, helped further distinguish the American welfare state and encourage the rise of neoliberalism in the United States.

Research Article
Copyright © Cambridge University Press 2013 

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2. Lyndon B. Johnson, Special Message to the Congress on Urban Problems: “The Crisis of the Cities,” February 22, 1968, APP,

3. Ibid.

4. The best account is Bratt, Rachel G., Rebuilding a Low-Income Housing Policy (Philadelphia: Temple University Press, 1989), 6062Google Scholar, 88–93, 131–35, passim, which attributes attacks on the public housing program and private industry lobbying to the shift toward publicly subsidized private housing. Hays, R. Allen, The Federal Government and Urban Housing: Ideology and Change in Public Policy, 2nd ed. (Albany, NY: State University of New York Press, 1995), 8889Google Scholar, 106–7, passim, notes the sweeping scale of the 1968 act's housing programs and analyzes their results. Erickson, David J., The Housing Policy Revolution: Networks and Neighborhoods (Washington, DC: Urban Institute Press, 2009)Google Scholar, 8, overlooks the importance of the 1968 act to the change in policy. See also Lewis, Paul George, “Housing and American Privatism: The Origins and Evolution of Subsidized Home Ownership Policy,” Journal of Policy History 5, no. 1 (1993): 2851CrossRefGoogle Scholar; Biles, Roger, “Public Housing and the Postwar Renaissance,” in Bauman, John F., Biles, Roger, and Szylvian, Kristin M., eds., From Tenements to the Taylor Homes: In Search of an Urban Housing Policy in Twentieth-Century America (University Park, PA: Pennsylvania State University Press, 2000), 156–57Google Scholar. Hyman, Louis, Debtor Nation: The History of America in Red Ink (Princeton, NJ: Princeton University Press, 2011)Google Scholar does note the importance of the 1968 act's home ownership program and mortgage credit instruments, but ignores its low-income rental housing and housing finance corporation provisions.

5. A few welfare state scholars have considered housing policy, but mainly in connection with home ownership. See, for example, Howard, Christopher, The Hidden Welfare State: Tax Expenditures and Social Policy in the United States (Princeton, NJ: Princeton University Press, 1997)Google Scholar; Conley, Dalton and Gifford, Brian, “Home Ownership, Social Insurance, and the Welfare State,” Sociological Forum 21, no.1 (March. 2006): 5582.CrossRefGoogle Scholar

Some scholars have considered the historic trajectory of the new concept of the “public-private partnership” mode of governance, but most erroneously date its origin in the late-1970s. See, for example, Stephenson, Max O. Jr., “Whither the Public-Private Partnership: A Critical Overview,” Urban Affairs Review 27, no. 1(September 1991): 109–27CrossRefGoogle Scholar; Lyall, Katharine C., “Public-Private Partnerships in the Carter Years,” Proceedings of the Academy of Political Science 36, no. 2 (1986), 413CrossRefGoogle Scholar. Berger, in contrast, identifies a Lyndon Johnson program, the National Alliance of Business (described below) as an early example of a government-business program and notes without further elaboration that the “concept of private-sector initiatives has a long history.” See Berger, Renée A., “Private-Sector Initiatives in the Reagan Administration,” Proceedings of the Academy of Political Science 36, no. 2 (1986): 1415CrossRefGoogle Scholar. For diverse perspectives on collaborative practices and public-private partnerships in American cities, see Squires, Gregory, ed., Unequal Partnerships: the Political Economy of Urban Redevelopment in Postwar America (New Brunswick, NJ: Rutgers University Press, 1989)Google Scholar.

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8. According to Daniel Patrick Moynihan, three-quarters of the community action agencies established in the first year of the programs' operation were nonprofit entities. Perlstadt, Harry, “The Development of the Hill-Burton Legislation: Interests, Issues, and Compromises,” Journal of Health & Social Policy 6, no. 3(1995): 7796CrossRefGoogle ScholarPubMed; Moynihan, Daniel Patrick, Maximum Feasible Misunderstanding: Community Action in the War on Poverty (New York: Free Press, 1969)Google Scholar, 130.

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12. In some urban renewal projects, the housing component consisted of rehabilitating old buildings to “conserve” neighborhoods from the threat of blight, which in this context meant low-income residents, frequently of color. The 1954 act offered builders mortgage insurance for homes developed for families displaced by urban renewal projects. Teaford, Jon, The Rough Road to Renaissance – Urban Revitalization in America, 1940–1985 (Baltimore: Johns Hopkins University Press, 1990)Google Scholar; Teaford, Jon, “Urban Renewal and Its Aftermath,” Housing Policy Debate 11, no. 2(Summer 2000): 443–65.CrossRefGoogle Scholar

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15. Although presidents as early as Andrew Jackson used the term “partnership” in their public addresses, they did so to refer to business collaborations. A search of the public statements by American presidents from 1789 onward indicates that Franklin Delano Roosevelt was the first president to employ the term in its modern political usage: as a metaphor or analogy to the business relationship in order to describe a particular mixed form of government. I conducted the survey of presidential public communications in The American Presidency Project (online at the University of California at Santa Barbara), an invaluable resource for historians and social scientists compiled by John T. Woolley and Gerhard Peters, at

16. Franklin Delano Roosevelt (FDR), Second Fireside Chat, May 7, 1933, APP,; FDR, Speech to Civil Works Administration Conference in Washington, November 15, 1933, APP; FDR, “Address to the National Conference of Catholic Charities,” October 4, 1933, APP,; FDR, “Radio Address for the Mobilization for Human Needs. October 14, 1938,” APP,; FDR, Address at the Dedication of the National Institute of Health, Bethesda, Maryland, October 31, 1940, APP, “Neither the American people nor their Government intends to socialize medical practice any more than they plan to socialize industry,” Roosevelt explained. “Since the passage of the famous Social Security Act with its health provisions in 1935, Federal, State and local health and medicine are cooperating more broadly than ever before … the Public Health Service is helping and must continue even more greatly to help. That partnership—and I emphasize that word in regard to health and medicine throughout the land—is making definite progress against many diseases” (italics added); FDR, Statement on Art Week, November 29, 1940, APP,

17. The agencies were the Tennessee Valley Authority, the Federal Works Agency, the National Institutes of Health, and the Federal Security Agency, respectively. Harry S. Truman (HST), “Address and Remarks at the Dedication of the Kentucky Dam at Gilbertsville, Kentucky,” October 10, 1945, APP,; HST, “Special Message to the Congress on Highway Construction,” February 9, 1948. APP,; HST, “Address at the Dedication of the National Institutes of Health Clinical Center,” June 22, 1951,; HST, “Address in Philadelphia at the American Hospital Association Convention,” September 16, 1952,,

18. Dwight D. Eisenhower (DDE), “Annual Budget Message to the Congress: Fiscal Year 1955,” January 21, 1954, APP,; DDE, “Annual Message to the Congress on the State of the Union, February 2, 1953,” APP, “The best natural resources program for America will not result from exclusive dependence on Federal bureaucracy. It will involve a partnership of the States and local communities, private citizens, and the Federal Government, all working together.” At an “Address at the Dedication of McNary Dam, Walla Walla, Washington,” September 23, 1954, Ike condemned the idea of universal federal provision of hydroelectric power and celebrated “voluntary pooling of public and private generating and transmission facilities” as “a splendid partnership.” Available at APP,

See also DDE, “Remarks at the Governors' Conference, Seattle, Washington,” August 4, 1953, APP,; DDE, “Address at the Annual Convention of the Future Farmers of America, Kansas City, Missouri,” October 15, 1953, APP,; DDE, “Annual Budget Message to the Congress for Fiscal Year 1957, January 16, 1956,” APP,

19. John F. Kennedy (JFK), “Remarks in Los Banos, California, at the Ground-Breaking Ceremonies for the San Luis Dam,” August 18, 1962, APP,; JFK, “Remarks in the Public Square, Cleveland, Ohio,” October 19, 1962, APP,; JKF, “Remarks at the Arkansas State Fairgrounds in Little Rock, Arkansas,” October 3, 1963, APP,; Lyndon B. Johnson (LBJ), “Remarks in Concord, California, at the Groundbreaking for the San Francisco Bay Area Rapid Transit Test Track,” June 19, 1964, APP,; LBJ, “Special Message to the Congress on Area and Regional Economic Development,” March 25, 1965, APP,

20. JFK, “Statement by the President on the Forthcoming U.N. Conference on the Application of Science and Technology for the Benefit of the Less Developed Areas,” January 25, 1963, APP,; JFK, “Special Message to the Congress on Housing and Community Development,” March 9, 1961, APP,; LBJ, Special Message to the Congress on Housing and Community Development, January 27, 1964, APP,

21. For the two tracks or tiers of housing policy, see Radford, Gail, Modern Housing for America: Policy Struggles in the New Era (Chicago: University of Chicago Press, 1996).CrossRefGoogle Scholar

22. Among the works that discuss the federal role in suburbanization are Jackson, Kenneth T., Crabgrass Frontier: The Suburbanization of the United States (New York: Oxford University Press, 1985)Google Scholar; Hayden, Dolores, Building Suburbia: Green Fields and Urban Growth, 1820–2000 (New York: Pantheon, 2003)Google Scholar; and Cohen, Lizabeth, A Consumers' Republic: The Politics of Mass Consumption in Postwar America (New York: Knopf, 2003)Google Scholar. For hidden aspects of social welfare policy, see Howard, The Hidden Welfare State; Hacker, Jacob S., The Divided Welfare State: The Battle over Public and Private Social Benefits in the United States (New York: Cambridge University Press, 2002).CrossRefGoogle Scholar

23. The phrase comes from the preamble to the United States Housing Act of 1937, U.S. Statutes at Large (75th Congress, 1st Sess., 888–99).

24. The delegation of responsibility to local housing authorities contrasts with many other New Deal programs in which the federal government made grants to state agencies. Radford, Modern Housing for America, 91.

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54. Lyndon B. Johnson, “Remarks to the Press on the Message ‘To Earn a Living: The Right of Every American,’ ” January 23, 1968, APP, For analysis of the later activities of the National Alliance of Business, see Martin, Cathie Jo, “Business and the Politics of Human Capital Investment Policy: A New Institutionalist Perspective,” Polity 32, no. 2 (Winter 1999): 203–32.CrossRefGoogle Scholar

55. Lyndon B. Johnson (LBJ), “Statement by the President upon Appointing a National Advisory Commission on Health Facilities,” October 6, 1967, APP,; LBJ, Statement to NAREB, printed October 12, 1967, event November 10, 1967, Folder 10/13/67-01/03/68, FG 170, Department of Housing and Urban Development, Box 254, LBJ. Like other presidents before him, Johnson also referred to the national highway program as a partnership between private enterprise and government. See LBJ, Statement by the President upon Signing Order, “Effective Date of Department of Transportation Act,” March 30, 1967, and Remarks upon Signing Proclamation 3834 “National Defense Transportation Day and National Transportation Week, 1968,” March 7, 1968.

56. In addition, Weaver believed that local communities, especially suburbs, used zoning and other regulations to prevent low-income housing development and wanted to wait for the National Commission on Urban Problems, which was charged with finding ways to remove such roadblocks, to issue its report. Pritchett, Robert Weaver and the American City, 301–2; Lalli, Frank, “Weaver's Frustrating Year—Errors, Politics Mar HUD Start,” House and Home 29, no. 10 (October 1966)Google Scholar: 12, 14; Coan, Carl A. S. Jr., “The Housing and Urban Development Act of 1968: Landmark Legislation for the Urban Crisis,” The Urban Lawyer 1, no. 1 (Spring 1969)Google Scholar: 6; National Commission on Urban Problems, Building the American City: Report of the National Commission on Urban Problems to the Congress and to the President of the United States (Washington, DC: U.S. GPO, 1968)Google Scholar; Howard Moskof, interview with author, Chevy Chase, MD, June 18, 2008; Address By Hon. John Sparkman, U.S. Senator from Alabama, Before the 36th Annual Convention of the National Housing Conference, Hotel Statler Hilton, Washington, DC; Congressional Quarterly Almanac 90th Congress 1st Session…1967, Vol. 23 (Washington, DC: Congressional Quarterly News Features, 1967), 501.

57. Housing Legislation of 1967, 2–3.

58. Congressional Quarterly Almanac… 1967, 498; Robert F. Kennedy, “Industrial Investment in Urban Poverty Areas, 113 Congressional Record, July 12, 1967, 18443.

59. The housing mortgages were to cover 80 percent of the construction cost. Committee on Finance, United States Senate, Tax Incentives to Encourage Housing in Urban Poverty Areas—Hearing Before the Committee on Finance United States Senate, Ninetieth Congress, First Session on S. 2100…September 14, 15, and 16, 1967 (Washington, DC: U.S. GPO, 1967)Google Scholar; “Major Housing Legislation, S 2100—Kennedy Plan,” Congressional Quarterly Almanac 1967, 501; Robert B. Semple Jr., “A Kennedy Plan Seeks Slum Jobs and Lower Rents,” New York Times, July 5, 1967. Kennedy's inner-city factory legislation originated the concept of enterprise zones, according to Frank Mankiewicz, “The Origins of Enterprise Zones,” Letters to the Editor, Washington Post, October 30, 1992.

60. Moskof's most convincing points were that the Kennedy proposal would not sufficiently lower rents for tenants but would increase developers' profits, which the Kaiser Committee staff had found were already sufficient to attract development. Mortgage subsidies and accelerated appreciation were part of the system established by the Section 236 program of the 1968 housing act and reinforced in the Tax Reform of 1969 (see analysis below in “A Government-Sponsored Enterprise for Low-income Housing” section and note 103), and tax credits for investment in low-income housing were adopted in 1986 (see discussion in “A Shift toward For-Profit Developers” section). Memo, Robert C. Wood to Joseph Califano, June 28, 1967, Box 3 (EX HS 2 11/22/63), Folder 11/1/67-8/31/67, LBJ; Moskof, interview.

61. The foundation was to be funded like many government programs by the sale of bonds to private investors. Henderson, A. Scott, Housing and the Democratic Ideal: The Life and Thought of Charles Abrams (New York: Columbia University Press. 2000), 206–9CrossRefGoogle Scholar. For the act and the reasoning behind it, see S. 1592, A Bill to Charter a National Home Ownership Foundation, and for Other Purposes, 90th Congress, 1st Sess., reprinted in Housing Legislation of 1967, 1414–46; Explanatory Statement Submitted by Senator Percy” in Housing Legislation of 1967, 1517–42; Butler, Warren H., “An Approach to Low and Moderate Income Home Ownership,” Rutgers Law Review 22, no. 1 (Fall 1967): 67101Google Scholar; McClaughry, John, “The Troubled Dream: The Life and Times of Section 235 of the National Housing Act,” Loyola University Law Journal 6, no. 1 (Winter 1975): 145Google Scholar; Carnegie, Christa Lew, “Homeownership for the Poor: Running the Washington Gauntlet,” Journal of the American Planning Association 36, no. 3 (May 1970): 160–67.Google Scholar

62. Used to dealing with HUD and the FHA, the housing interest groups disliked Percy's independent nonprofit housing foundation. Statement of Robert C. Weaver, Housing Legislation of 1967, 8–9; Robert C. Weaver to John Sparkman, July 14, 1967, Subject: S. 1592, 90th Congress (Senator Percy et al.) reprinted in Housing Legislation of 1967, 1447–49; Carnegie, “Homeownership for the Poor,” 161–64, note 16 (167); Pritchett, Robert Weaver and the American City, 307; Horace Busby to Charles L. Schultze, July 30, 1965, Box 288 (Papers of LBJ, EX FG 240-1 6/1/68), Folder FG 245 Housing and Home Finance Agency 6/11/65—9/23/65, LBJ; Bratt, Rebuilding a Low-Income Housing Policy, 131–32; National Housing Conference, “Report of the Committee on Providing Homeownership for Lower Income Families,” reprinted in Housing Legislation of 1967, 327–33, 329 (quotation); Housing Legislation of 1967, 255, 272–73, 395–96, 1152–57, 1194, 1200.

63. Even the home ownership assistance of Percy's proposed nonprofit foundation was watered down to encourage all low-income housing opportunities, not just home ownership. McClaughry, “Troubled Dream,” 11–14; United States Senate Committee on Banking and Currency, Housing and Urban Development Act of 1967: Report to Accompany S. 2700 Together with Individual and Additional Views (Washington, DC: U.S. GPO, November 28, 1967), 1–24; Robert Ellickson to President's Committee, November 15, 1967, PCUH, Box 56, Folder Originals for November 16, 17 Meeting, LBJ.

64. Carnegie, “Homeownership for the Poor,” 164–66; Robert C. Weaver to John Sparkman, August 10, 1967, WHCF, Box 3 (EX HS 2 11/22/63), Folder 11/1/67-8/31/67, LBJ; John Sparkman to Honorable Russell B. Long, January 16, 1968, Sparkman Accession 70A4063, Box 6, Folder 11 Housing General, John J. Sparkman Papers, W. S. Hoole Special Collections Library, University of Alabama, Tuscaloosa, AL (hereafter Sparkman Papers).

65. Califano admitted such an enormous job might be impossible to achieve, but he and Kaiser believed it necessary to set high goals to make serious progress in the next few years. Joseph Califano to the President, November 10, 1967, FG 170 Box 254, Folder 10/13/67-01/03/68, LBJ.

66. Lyn Shepard, “Housing-bill Chefs Toil over Recipe,” Christian Science Monitor, January 18, 1968.

67. An example of enthusiasm for tremendous housing productions is the measure, introduced in 1967 by three Democratic members of the House Housing Subcommittee, to expand the supply of low- and moderate-income housing in the United States by 1,000 percent. Congressional Quarterly Almanac, 90th Congress, 1st Sess., 1967, vol. 23 (Washington, DC: Congressional Quarterly Service, 1967), 501.

68. Howard Moskof, Staff Report: The President's Committee on Urban Housing, September 28, 1967, President's Committee on Urban Housing (hereafter PCUH), Box 55, Binder “Staff Report,” LBJ; Memo, unsigned [probably Howard Moskof] to The President's Committee on Urban Housing, Subject: “The Elusive Search for the All-Purpose Housing Solution—The Need to Analyze Each of the Several Components of the Problem,” September 15, 1967, Papers of LBJ, EX FG 647 Box 379 Folder Committee to Rebuild America's Slums (11/22/63—12/31/67), LBJ; Moskof, interview.

69. Groups attending the policy conferences included the lending trade associations interested in mortgage credit, the National League of Cities with the U.S. Conference of Mayors, NAHRO, National Association of County Officials, the U.S. Chamber of Commerce, and the AFL-CIO. Lilley, William III, “The Homebuilders' Lobby,” in Pynoos, Jon, Schafer, Robert, and Hartman, Chester W., eds. Housing Urban America, 2nd ed. (New York: Aldine Publishing Company, 1980)Google Scholar, 39 (first published as “Washington Pressures/Home Builders' Lobbying Skills Result in Successes, ‘Good-guy Image,” National Journal, February 27, 1971, 431–45); Proceedings of the Twenty-Third Annual Convention of the National Association of Home Builders, Meeting of the 1966 Board of Directors, morning session, December 7, 1966, Chicago, IL, NAHB archives, 10–12; Presidents Committee on Urban Housing, Minutes, November 16–17, 1967, PCUH, Box 41, Folder Minutes, LBJ; NAHRO's Contribution to Housing and Urban Redevelopment Act of 1968,” Journal of Housing 25, no. 7 (August 1968)Google Scholar: 362.

70. Lyndon B. Johnson, “Annual Message to the Congress on the State of the Union, January 17, 1968.”

71. John Sparkman to Robert De Kruif, January 23, 1968, Sparkman Papers.

72. A number of people in the 1960s dreamt of a public-private Comsat for housing. See Urban America, The Troubled Environment, 138. For examples of criticisms of the housing industry as too fragmented, see “An Agenda for Policy: Housing and Community Development, Working Draft,” presented at the Newark Conference on the ACTION Program for the American City, May 4, 5, and 6, 1959, 2, 20; National Commission on Urban Problems, Building the American City: Report of the National Commission on Urban Problems to the Congress and to the President of the United States (Washington, DC: U.S. GPO, 1968)Google Scholar. Comsat was authorized by Congress in 1962; Johnson signed the act enabling the Corporation for Public Broadcasting on November 7, 1967. Internal Memo of the President's Committee on Urban Housing, November 24, 1967, Subject: Better Urban Dwellings Corporation, PCUH, Box 57, Folder Original December Package, LBJ.

73. Bohen to Califano, November 25, 1967; NAHB Policy Statement for 1968, Approved by NAHB Board of Directors, December 6, 1967, Chicago, IL, Section V. Housing Our Urban Poor, 2.

74. Larry Levinson to Joseph Califano, December 26, 1967, EX HS 2 11/22/63 Box 3, Folder 9/1/67-12/31/67, LBJ; Coan, “The Housing and Urban Development Act of 1968,” 23; Moskof, interview; Carl A. S. Coan Jr., interview by author, June 9, 2006, Washington, DC.

75. Joe Califano to the President, February 10, 1968, 8:30 p.m., Papers of LBJ, EX FG 647 Box 379 Folder Committee to Rebuild America's Slums (1/1/68—9/30/68), LBJ; Lyndon B. Johnson, “Special Message to the Congress on Urban Problems: The Crisis of the Cities,” February 22, 1968; Hearings Begin on Urban Development Proposals”, Congressional Quarterly Weekly Report 26, no. 11 (March 15, 1968): 526–27.Google Scholar

76. Lilley, “The Homebuilders' Lobby,” 39.

77. During Section 235's first fiscal year, up to 25 percent of its funds could be used to subsidize the purchase of existing homes; the next year the figure dropped to 15 percent of authorized funds; the year after that it dropped to 10 percent; and from there on no funds could go to existing dwellings. Lilley, ibid; Edson, Charles L., “Sections 235 and 236—The First Year,” Urban Lawyer 2 (1970): 15.Google Scholar

78. McClaughry, “Troubled Dream,” 17–21.

79. Housing and Urban Development Act of 1968 (Public Law 90-448), Title I, Sec. 101, 4; “Major Housing Bill Cleared,” Congressional Quarterly Weekly Report, August 2, 1968, 2031; Henderson, Housing and the Democratic Ideal, 211.

80. Adapting a mechanism from Percy's home ownership proposal, Coan proposed paying the difference between the fair market interest rate—what a for-profit developer would need to operate a project—and the basic or subsidized interest rate of 1 percent. The subsidy in Section 236 was still not as deep as the one in the Rent Supplements program. PCUH, A Decent Home, 65; Coan, interview; Moskof, interview; Minutes, Subcommittee New and Existing Programs, Meeting of December 14, 1967, Box 47 unmarked folder, 10, LBJ; Schwartz, Alex F., Housing Policy in the United States (New York and London: Routledge, 2006), 130–31.CrossRefGoogle Scholar

81. Housing and Urban Development Act of 1968 (Public Law 90-448), Title I, Title II Part A—Private Housing, Part B—Low-Rent Public Housing; Robert B. Semple Jr., “Johnson Approves ‘Massive’ Program to House the Poor,” New York Times, August 2, 1968.

82. The bill also provided more money for urban renewal (while aiming to slow down its bulldozers), expanded urban planning grants, and set up government-industry insurance programs for properties damaged by riots and floods.

83. United States House of Representatives, Subcommittee on Housing of the Committee on Banking and Currency, Housing and Urban Development Legislation and Urban Insurance: Hearings … Ninetieth Congress: Second Session on H.R. 15624, H.R. 15626 and related bills (Washington, DC: U.S. GPO, 1968), Part 1, March 12, 13, 14, 15, 18, 19, 20, 21, and 22, 1968 (hereafter, U.S. House, Hearings…Ninetieth Congress); Carliner, Michael S., “Development of Federal Homeownership 'Policy,'Housing Policy Debate 9, no. 2 (1998): 309–10CrossRefGoogle Scholar; Murray Seeger, “Senate Passed Housing Bill Brightens Mortgage Picture,” Los Angeles Times, June 3, 1968, D11, 14. Hyman, Although, Debtor Nation: The History of America in Red Ink (Princeton: Princeton University Press, 2011), 225–28Google Scholar, correctly points out the impact of mortgage-backed securities eventually had on the housing market, his account misinterprets this element as a tool for subsidized low-income housing—this and the other FNMA provisions primarily aimed at market-rate housing—and exaggerates the confidence that contemporaries placed on the relatively untested idea of mortgage-backed securities. On the latter point, note NAHB testimony proposing an additional regulation that would require investors to invest in housing or HUD Assistant Secretary Brownstein's statement that he hoped the securities would be effective, but also believed that the president's proposed tax legislation should improve the mortgage market. (See Hearings and Seeger, cited above.) Hyman also neglects completely Section 236 (and the funding for Rent Supplements and public housing), by which the bill's authors hoped to stimulate development of the rental apartments that would house by far most low-income households. See Coan, “The Housing and Urban Development Act of 1968,” 18, 21.

84. The members of the National Housing Conference, which had helped birth public housing, approved of the 1968 bill's proposed corporation for housing partnerships because it could “enlist the private capital and talents of American industry in the production of low and moderate income housing.” DeLeslie Allen, Statement, U.S. House, Hearings…Ninetieth Congress, 774; Nathaniel S. Keith, Statement, ibid, 393, 396; Andrew Beimiller, (AFL-CIO Department of Legislation), ibid, 538. NAHB agreed CQW, 653; Rafsky, William F., “What Are the Potentials and the Limits of Private Enterprise on the Urban Front?Journal of Housing 25, no. 7 (August 1968)Google Scholar: 338; Lloyd E. Clarke (NAHB), Statement, ibid, 831; See also quote of Byrne, Thomas R. (Mayor of St. Paul, MN, speaking for the National League of Cities), “Housing, Urban Development,” Congressional Quarterly Weekly Report 26, no. 28 (March 29, 1968)Google Scholar: 654.

85. William F. Rafsky, “Potentials and Limits of Private Enterprise?” 338, 341, 345–48; Gazzolo, Dorothy, “Is It a False Hope or Bright Promise that Private Enterprise Can Avert Urban Crisis?Journal of Housing 25, no. 7 (August 1968): 337Google Scholar; Keith, Statement, U.S. House, Hearings…Ninetieth Congress, 408; Walter P. Reuther, Statement, U.S. House, Hearings…Ninetieth Congress, 725.

86. Tate asserted that nonprofit groups had built almost 1,000 units of low-income elderly and family housing in his city. James H. J. Tate, Statement, U.S. House, Hearings…Ninetieth Congress, 235–45; Allen, Statement, ibid, 776; Edgar F. Kaiser, Statement, ibid, 515–16; Clarke, Statement, ibid, 843.

87. Beimiller, Statement, U.S. House, Hearings…Ninetieth Congress, 540; Walter P. Reuther, Statement, ibid, 725; United Auto Workers leaders opposition to the private housing industry dated from at least 1941, see Peterson, Sarah Jo, Planning the Home Front: Building Bombers and Communities at Willow Run (Chicago: University of Chicago Press, 2013).CrossRefGoogle Scholar

88. Biemiller, Statement, U.S. House, Hearings…Ninetieth Congress, 539–40; Keith, ibid, 399–402; Clarke, ibid, 833–34; Lon Worth Crow, Jr., Statement, ibid, 278–81.

89. Six years after the law's passage, Leon Weiner was elected president of the National Housing Conference. Prior to the implementation of the 1968 law, the idea of a home builder leading the original national public housing interest group was simply unthinkable. U.S. House, Hearings…Ninetieth Congress.

90. Dr. King's Death Brings Pressure for ActionJournal of Housing 25, no. 4 (April 1968): 177–78Google Scholar; Massive Omnibus Housing Bill Passed by Senate,” Congressional Quarterly Weekly Report 26, no. 28 (June 7, 1968): 1429–32Google Scholar; “Housing Bill Amendments,” idem, June 21, 1968, 1506–67; “House Passes Housing Bill,” idem, July 12, 1968; 1708–77; “Major Housing Bill Cleared,” idem, August 2, 1968, 2016–93; Semer, Milton, Zimmerman, Julian H., Foard, Ashley, and Frantz, John M., “A Review of Federal Subsidized Housing Programs, in HUD, Housing in the Seventies Working Papers, National Housing Policy Review (Washington, DC: U.S. GPO, 1973), 124–27.Google Scholar

91. Agnew, Bruce, “Housing the Poor: Gen. Grantsmanship Bows to Pvt. Enterprise,” House and Home 32, no. 5 (November 1967)Google Scholar: 5.

92. Between 1969 and 1973, the Section 235 and 235 programs added 508,013 new homes (of which Section 235 contributed about 415,000), far more than the 359,664 apartments built by the public housing program. From 1969 through 1978, the Section 236 program added 541,460 rental units, while public housing added 485,664. Edgar O. Olsen, “Housing Programs for Low-income Households,” National Bureau of Economic Research, Working Paper 8208, 2001, available at, 6, Table 5; Quigley, John M., “A Decent Home: Housing Policy in Perspective,” Brookings-Wharton Papers on Urban Affairs (2000), Fig. 1, 59; Tab. 1; 63CrossRefGoogle Scholar.

93. For-profit developers' share of the Below-Market-Interest-Rate projects was a little more than two-fifths. Keith, Housing America's Low- and Moderate-Income Families, Tab. 9, 16; Elmer B. Staats, Section 236 Rental Housing: An Evaluation with Lessons for the Future, 1978. Report to the Congress from Comptroller General. 14, 21–25; Hays, Federal Government and Urban Housing, 123.

94. The Section 8 legislation authorized housing assistance payments to low-income families in new construction, substantially rehabilitated, and existing housing, each of which was administered as a separate subprogram. Hays, Federal Government and Urban Housing, 148–53.

95. In 1981 the number of units created under Section 235, Section 236, and Section 8 reached 1,252,210 units, whereas the public housing program had produced 1,204,000. If dwellings that received housing assistance under two smaller programs, Section 515, a rural housing program similar to Section 8, and Rent Supplements are added to the above mentioned programs, the total number of privately owned, subsidized units exceeded that of public housing in 1978. Edgar O. Olsen, “Housing Programs for Low-income Households,” NBER Working Paper 8208 (2001), Tab. 5.

96. HUD, Data Sets, Low-Income Housing Tax Credits, About the LIHTC Database,

97. Abt Associates, HUD, Updating the National Low-Income Housing Tax Credit Database: Projects Placed in Service Through 1999 (Washington, DC: HUD, 2002)Google Scholar,, 12; HUD, New Low-Income Housing Tax Credit Property Data Available (2011),, 9.

98. In the Residential Finance Survey, cooperatives owned .2 percent of the subsidized projects and 3 percent of the subsidized units. Under the Low Income Housing Tax Credit program, nonprofit groups benefit from a requirement that at least 10 percent of tax-credit dollars allocated in each state must be used in nonprofit projects. State governments (usually through state housing finance agencies) allocate the tax credits to housing developers, and some states exceed the federal set-aside by requiring at least 25 percent of the tax credit allocations go to nonprofits. Olsen, “Housing Programs for Low-income Households,” 5; HUD and U.S. Census Bureau, Residential Finance Survey, 2001, micro-data analysis courtesy of Michael Carliner. HUD, “New Low-Income Housing Tax Credit Property Data Available,” September 2011, (viewed April 17, 2013), 9, Tab. 3: Additional Characteristics of LIHTC Projects, 1995–2009.

99. Lilley, “The Homebuilders' Lobby,” 39–40 (quotation); Hays, Federal Government and Urban Housing, Fig. 9, 112, Fig. 10, 118, Fig. 11, 127; Carliner, “Development of Federal Homeownership 'Policy,” 313; Olsen, “Housing Programs for Low-income Households,” Tab. 5.

100. Robert Schafer and Charles G. Field, “Section 235 of the National Housing Act: Homeownership for Low-Income Families?'' in Pynoos, Schafer, and Hartman, eds., Housing Urban America, 460–71; Hays, Federal Government and Urban Housing, 117–21; McClaughry, “The Troubled Dream”; Gotham, Kevin Fox, “Separate and Unequal: The Housing Act of 1968 and the Section 235 Program,” Sociological Forum 15, no.1 (2000): 1337CrossRefGoogle Scholar.

101. The two programs were the Loan Management Set Aside subsidy (drawn from Section 8 appropriations) and the Flexible Subsidy Fund, established in Housing and Community Development Amendments of 1978. In 2000 the government established a program to allow owners of Section 236 properties to continue to receive interest reduction subsidies for their first mortgage when they refinanced their properties that they maintained as low-income housing. Task Force on Improving the Operation of Federally Insured or Financed Housing Programs, Report of the Task Force on Improving the Operation of Federally Insured or Financed Housing Programs Vol. 3, Multifamily Housing (Washington, DC : National Center for Housing Management, 1973), 60, 102–13; Elmer B. Staats, Comptroller General of the United States, Opportunities to Improve Effectiveness and Reduce Costs of Rental Assistance Housing Program, Report to the Congress, B-171630, (Washington, DC: Government Accountability Office, 1973), 9–15, 28–37; Final Report of the Multifamily Property Utilization Task Force (Washington, DC: U.S. Dept. of Housing and Urban Development, Office of Housing-FHA, 1978); Hays, Federal Government and Urban Housing, 122–28, Tab. 4.1.

102. United States Senate, Committee on Banking and Currency, First Annual Report of the National Corporation for Housing Partnerships: December 16, 1968, to June 30, 1970, (Washington, DC: U.S. GPO, 1973); National Corporation for Housing Partnerships (NCHP) and National Housing Partnership (NHP), 1974 Report to the President of the United States of America (Washington, DC: NCHP and NHP, 1974).

103. Other tax incentives available to investors in Section 236 housing included “liberal provisions for the recapture of accelerated depreciation in event of sale, 5-year write-off of rehabilitation costs, deferment of taxable gain when it is reinvested in other subsidized housing, and allowance of a fair market value rather than depreciated cost as a deductible item when housing is donated to qualified charitable organizations.” The 1969 law is known as the Tax Reform Act of 1969. United States Congress, Joint Economic Committee, Subcommittee on Priorities and Economy in Government, Housing Subsidies and Housing Policies. Hearings, Ninety-second Congress, Second Session. December 4, 5, and 7, 1972 (Washington, DC: U.S. GPO, 1973)Google Scholar, 15; Edson, Charles L., “Affordable Housing—An Intimate History,” in Iglesias, Tim and Lento, Rochelle E., eds., The Legal Guide to Affordable Housing Development, 2nd ed. (Chicago: American Bar Association, Forum on Affordable Housing and Community Development Law, 2011), 1213Google Scholar; Edson, Charles L., “Sections 235 and 236—The First Year,” Urban Lawyer 2 (1970): 2627Google Scholar; Cenatiempo, Michael J., “Tax Advantages under Section 236 of the National Housing Act,” Houston Law Review 8 (1971): 911–28.Google Scholar

104. The 1986 tax reform bill eliminated the tax benefits for investors in low-income housing projects, including NCHP projects. NCHP and NHP, Report to the President of the United States of America/1978 (Washington, DC: NCHP and NHP, 1978)Google Scholar, 5.

105. The largest nonprofit syndicators are Enterprise Community Partners and the National Equity Fund (an affiliate of the Local Initiatives Support Corporation or LISC). Erickson, The Housing Policy Revolution, 89–90; (viewed May 1, 2013);; For an example of a for-profit regional syndicator, see

106. Lyall, “Public-Private Partnerships in the Carter Years”; Orlebeke, Charles J., New Life at Ground Zero: New York, Home Ownership, and the Future of American Cities (Albany, NY: Rockefeller Institute Press, 1997), 89Google Scholar; Fosler, R. Scott and Berger, Renee, eds., Public Private Partnerships in American Cities: Seven Case Studies (Lexington, MA: Lexington Books, 1982)Google Scholar; Fosler, R. Scott and Berger, Renee, Public-Private Partnership: An Opportunity for Urban Communities (Washington, DC: Committee for Economic Development, 1982)Google Scholar; Sagalyn, Lynne B., “'Public/Private Development,” Journal of the American Planning Association 73, no. 1 (Winter 2007): 722CrossRefGoogle Scholar; Squires, ed., Unequal Partnerships; McQuarrie, Michael, “Nonprofits and the Reconstruction of Urban Governance: Housing Production and Community Development in Cleveland, 1975–2005,” in Clemens, Elisabeth S. and Guthrie, Doug, eds., Politics and Partnerships: The Role of Voluntary Associations in America's Political Past and Present (Chicago; London: University of Chicago Press, 2010), 237–68Google Scholar; Bratt, , Rebuilding a Low-Income Housing Policy.Google Scholar

107. Jimmy Carter, “National Urban Policy Remarks Announcing the Policy,” March 27, 1978, APP,; Lyall, “Public-Private Partnerships in the Carter Years”; Berger, “Private-Sector Initiatives in the Reagan Administration,” 27.

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109. A further irony, perhaps, is that public-private partnership failed to stop the growth and spending of the federal government. In the post-Reagan era of a reduced federal domestic role, of course, the idea of public-private partnership has continued to grow in popularity. Berger, “Private-Sector Initiatives in the Reagan Administration”; Savas, E. S., Privatizing the Public Sector: How to Shrink Government (Chatham, NJ: Chatham House Publishers, Inc., 1982)Google Scholar; Savas, E. S., Privatization and Public-Private Partnerships (New York: Chatham House, 2000), 34Google Scholar; Linder, Stephen H., “Coming to Terms with the Public-Private Partnership: A Grammar of Multiple Meanings,” The American Behavioral Scientist 43, no. 1 36, no. 2 (September 1999): 3551.CrossRefGoogle Scholar

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112. “Lock-in” is a key term for self-reinforcing factors in path dependency theory as used both in economics and political science. See, for example, Barnes, William, Gartland, Myles and Stack, Martin, “Old Habits Die Hard: Path Dependency and Behavioral Lock-In,” Journal of Economic Issues 38, no. 2 (June 2004): 371–77CrossRefGoogle Scholar; Pierson, Paul, “Increasing Returns, Path Dependence, and the Study of Politics,” American Political Science Review 94, no. 2 (June 2000): 251–67CrossRefGoogle Scholar. Morgan and Campbell, The Delegated Welfare State.

113. Using different lines of attack, scholars have also challenged the idea the United States is laggard in social welfare. Examples include Hacker, The Divided Welfare State; Novak, “The Myth of the ‘Weak’ American State”; Garfinkel, Irwin, Rainwater, Lee, and Smeeding, Timothy, Wealth and Welfare States: Is America a Laggard or Leader? (Oxford, New York: Oxford University Press, 2010).Google Scholar

114. See, for example, Lipset, Seymour Martin, American Exceptionalism: A Double-Edged Sword (New York: Norton Press, 1997)Google Scholar; Skocpol, Theda, Protecting Soldiers and Mothers: The Political Origins of Social Policy in the United States (Cambridge, Mass.: Belknap/Harvard University Press, 1992)CrossRefGoogle Scholar; Steinmo, Sven, “Rethinking American Exceptionalism: Culture or Institutions?,” in Dodd, Lawrence C., Jillson, Calvin C., and Lowi, Theodore J., eds., The Dynamics of American Politics: Approaches and Interpretations (Boulder, CO: Westview Press, 1994), 106–31Google Scholar; Alesina, Alberto and Glaeser, Edward L., Fighting Poverty in the US and Europe: a World of Difference (Oxford and New York: Oxford University Press, 2004)CrossRefGoogle Scholar; for a rebuttal to anti-statism as a political force, Quadagno, Jill S. and Street, Debra, “Ideology and Public Policy: Antistatism in American Welfare State Transformation,” Journal of Policy History 17:1 (January 2005): 5271.CrossRefGoogle Scholar

115. The limited-dividend companies operating under the 1968 act's programs could claim tax advantages, which were also invisible to the public. Howard, The Hidden Welfare State; Clemens, “Lineages of the Rube Goldberg State.”

116. For the development of the nonprofit sector in social welfare policies, see Smith, Steven Rathgeb and Lipsky, Michael, Nonprofits for Hire: The Welfare State in the Age of Contracting (Cambridge, MA: Harvard University Press, 1993)CrossRefGoogle Scholar; Clemens and Doug Guthrie, eds., Politics and Partnerships. For the growth of the nonprofit sector in housing, Erickson, The Housing Policy Revolution; Reagan, Katherine O. and Quigley, John M., “Federal Policy and the Rise of Nonprofit Housing Providers,” Journal of Housing Research 11, no. 2 (2000): 297317.Google Scholar

117. Morgan and Campbell, The Delegated Welfare State, describe the mixture of nonprofit and for-profit entities in social welfare programs generally, 23–25, and in the Medicare program in detail, passim.

118. The literature on social housing in Europe is voluminous. Recent anthologies include Whitehead, Christine and Scanlon, Kathleen, eds. Social Housing in Europe II: A Review of Policies and Outcomes (London: London School of Economics and Political Science, 2008)Google Scholar; Czischke, Darinka and Pittini, Alice, Housing Europe 2007: Review of Social, Cooperative and Public Housing in the 27 EU Member States. European Social Housing Observatory (Brussels: CECODHAS European Social Housing Observatory, 2007)Google Scholar; European Journal of Housing Policy 4, no. 3 (December 2004).Google Scholar

119. Different European countries have to varying degrees decentralized policy systems and adopted private financing and/or management of social housing, private housing companies, for-profit developers' provision of affordable housing, and low-income home ownership including the sale of former public housing dwellings. Baldwin, Peter, “Beyond Weak and Strong: Rethinking the State in Comparative Policy History,” Journal of Policy History 17, no. 1 (January 2005): 1233CrossRefGoogle Scholar; Novak, “The Myth of the ‘Weak’ American State.”