Housing Act of 1954


Amendment to the Housing Act of 1949 that initiated city urban renewal projects and displaced poor residents.

The federal Housing Act of 1954 increased the flexibility of the Housing Act of 1949, specifying that the earlier act’s funding for property acquisition, demolition of structures, and site preparation be expanded to include commercial and industrial development. The shift in emphasis from replacement residential housing (urban redevelopment) to commercial and industrial development (urban renewal) meant that poor neighborhoods could be demolished and replaced with businesses or apartments that did not necessarily provide residences for former neighborhood residents. After passage of the 1954 amendment, applications for federal funds increased significantly compared with what had been experienced after passage of the 1949 legislation, and politicians and business interests combined private funds with municipal and federal funds toward redeveloping core areas of big cities. These areas had experienced deterioration as new homes were built in the suburbs for young families seeking to live in their own homes rather than living with their parents. As more people moved to the suburbs, the inner city was abandoned and the tax base diminished, causing some areas to become slums.

Urban renewal legislation initiated a period of contention between advocates for the poor and local business interests. Frequently, cities pursued redevelopment plans that eliminated many poor neighborhoods and left others overcrowded. Poor inner-city neighborhoods were affected by practices such as redlining, a process of exclusion in which financial institutions denied development capital to neighborhoods designated as poor investments. Pockets of inner-city poverty and unemployment were increasingly evident within areas of relative prosperity. By the end of the 1950s, many large city governments were aggressively pursuing urban renewal in the interest of establishing more vital business districts rather than improving the living conditions of poor residents.

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