don’t blame the fha for the rise of the suburbs

One of the most important trends in the post-WWII US was the rise of the suburbs. The creation of the suburbs involved a transformation of economic and political life, as well as a new era of racial segregation. Historians have long laid the blame for the emergence of the suburbs on the Federal Housing Administration (FHA), arguing that the FHA favored new single-family houses in the suburbs over multi-family rental properties in cities, and that the FHA discriminated against minority homebuyers. A new article by Judge Glock, a history PhD student at Rutgers, argues that this condemnation of the FHA is entirely misplaced. In How the Federal Housing Administration Tried to Save America’s Cities, 1934–1960, Glock argues that the FHA: “was more likely to be involved in (1) multifamily and rental housing than single-family homes, (2) urban housing than suburban, and (3) to provide relative equality to white and minority borrowers, after significant political prodding.” (2016: 292) What did historians miss?

Glock’s argument is rooted in traditional archival sources from the FHA itself, as well as media coverage of FHA efforts and the Historical Statistics of the United States which demonstrate the relative involvement of the FHA in different parts of the housing market. Glock finds that from the very beginning, the FHA was focused on cities for a combination of political and organizational reasons. One compelling part of the account notes that most FHA offices were located in urban downtowns, which led to FHA agents being unwilling to travel into the suburbs and exurbs to approve loans:

By the 1950s, suburban builders who lamented their lack of insurance were apprehensive that FHA agents were staying too close to these offices. One government report noted that while many other government employees were paid by fees for each approved project or permit, and were ready to travel anywhere to get those fees, it was difficult to convince FHA appraisers and inspectors on fixed salaries to “travel long distances” to approve loans for “outlying communities,” since they were in no way compensated for such extra work. (2016: 301)

Narrative accounts like these suggest that historians have misread the agency’s biases. But perhaps Glock’s most important evidence is simple counts of the relative level of FHA involvement in single-family vs. multi-family properties, in suburban vs. urban properties, and for white vs. nonwhite mortgages. In contrast to the conventional narrative, Glock finds that the FHA supporter multi-unit properties and urban properties at greater rates:

From 1934 until 1958, the FHA insured about 25.6 percent of all new single-family construction in the country and 39.7 percent of all multifamily construction. (2016: 296)

The 1960 residential finance census show that the FHA insured 23 percent of all single-family mortgages in the central cities and 18.9 percent of such loans in the suburbs. If one moves out to the rural, or possibly “ex-urban,” areas the percentage of FHA loans drops to 13.2 percent. (2016: 302)

Whether or not we should characterize these modest differences as the FHA trying to “save America’s cities,” the evidence sharply contrasts with the prevailing narrative of an organized governmental effort to promote suburbs at the expense of the urban core.

The evidence on race is a bit more mixed. In its early years, the FHA exhibited all of the racial biases attributed to it in the literature. But in the mid-1940s, in part due to mounting political pressure, the FHA began to become more progressive than the rest of the mortgage industry, and thus “when the FHA is compared to private real estate practices, the agency provided relatively more opportunity to minorities, and thus ameliorated some racial disparities, although they did so against an admittedly low bar.” (Glock 2016: 304) Even staunch critics of the FHA’s racism in the 1940s recognized the progress achieved by the early 1950s, and by 1970 the FHA “supported 35 percent of the black single-family market and only 20 percent of the white market, a tendency that would continue into the present.” (Glock 2016: 308)

Glock concludes by arguing that while we can and should fault the FHA for not doing more to support urban centers and minority borrowers, we should recognize that, “Despite claims that federal subsidies created the modern suburban landscape, the government’s most important instrument for reshaping the housing market pushed against it.” (Glock 2016: 309)

Highly recommended, and I’m very excited to hear what sociologists invested in these debates make of Glock’s argument.

Author: Dan Hirschman

I am a sociologist interested in the use of numbers in organizations, markets, and policy. For more info, see here.

4 thoughts on “don’t blame the fha for the rise of the suburbs”

  1. Thanks. This is really interesting. I’ll need to dig into this when I have time, which I’m afraid will be after classes end in May. Only reading quickly at this point, but do I correctly infer that FHA was racially biased, just less so than private lenders?


    1. The argument about race is the most tenuous and complicated, I think. Glock argues that in the 1930s-1940s, the FHA was as racially biased as the rest of the market. In the late 1940s, the FHA made a large and intentional shift towards racial equality, and by the 1960s it becomes significantly less biased than the market as a whole and at least intendedly offered equal treatment (with even a bit of race-based affirmative action). But these are relative claims; it’s difficult to judge what it would mean to be “not racially biased” in the mortgage market of the time.


  2. Thanks for this! The articles is a nice read, and I’m sympathetic to the argument, though I wonder if a focus on where the money went underplays the influence of the FHA, in particular in terms of its role in standardizing the industry. For instance, Harris and Forrester (2003) demonstrate the importance of mortgage insurance standardization in encouraging zoning practices – these, in turn, would directly shape suburban form (and in turn, the presence of zoning by-laws may provide an additional reason that urban areas were favored by FHA practices over ex-urban areas). Anyway, this is great stuff, pushing us beyond Jackson’s foundational work (and Jackson, too, never paid enough attention to zoning).


  3. Those percentages are interesting, but I’d like to see the ratio of multi/single family housing the FHA was involved with. Percentages of total leave a lot of room for heavy single family bias since I have no idea of their respective prevalence.


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