On August 22, 1974, at 6:33 am, recently sworn-in President Gerald Ford went to his doctor’s office, and over the course of the morning met with various people, including: Senator Edward Kennedy (D-MA), Secretary of State Henry Kissinger, CIA and National Security Affairs representatives, the Chair of the Board of General Motors, as well as many others. At 2:05 pm, the President and First Lady Betty Ford went to the Red Room of the White House to meet HUD Secretary James T. Lynn and Under Secretary James Mitchell. A few minutes later, at 2:13 pm, they all proceeded to the East Room for a ceremony at which President Ford signed into law, the Housing and Community Development Act of 1974 (HCDA). According to the President’s “Daily Diary,” approximately 200 people attended the signing ceremony.
President Ford’s signing statement quoted Senator John Sparkman (D-AL), Chair of the Banking, Housing, and Urban Affairs Committee, who said the HCDA “is probably the most important legislation on community development since the passage of the Housing Act of 1949.” Focusing on Title I of the HCDA, which created the Community Development Block Grant (CDBG) program, President Ford stated, “I think we can say without any reservation that the move from the narrow programs of the past in community development to programs that are very broad gauged, a consolidation of programs such as Model Cities and urban development, will give a real impetus to local decision making, local action, and local responsibility.”
The President said relatively little about Title II of the HCDA, which created the Section 8 program, “Finally, S. 3066 authorizes a more flexible approach to assisting low- and moderate-income families obtain adequate housing. This new lower income housing assistance program should also help increase the supply of housing in areas where vacancies are unreasonably low.”
Writing in the 25th anniversary issue of Shelterforce in March 2000, NLIHC’s founder, Cushing Dolbeare, remarked that the HCDA “substantially revised the nation’s subsidized housing and urban renewal programs.” She further commented that the HCDA, “effectively ended the Nixon housing moratorium [but] was viewed with widespread skepticism, even before it was implemented.” (Without warning in January, 1973, President Nixon announced a funding moratorium for most HUD programs, such as public housing, urban renewal, and Model Cities.)
Regarding Section 8, Cushing noted that “the ’74 act’s signature housing program, resulted from a series of compromises between an administration regarded as hostile to all forms of housing assistance and a Democratic Congress that had, with great difficulty, reached agreement between the House and Senate on a form acceptable to the administration.” Cushing observed that “Once the regulations governing the Section 8 program were issued and digested, low-income housing reached its peak. In 1976, HUD and Farmer's Home Administration subsidized housing programs provided a total of 649,000 incremental units. While this figure includes 206,000 tenant-based units (such as vouchers), neither the total units nor the level of project-based units has been equaled since. Indeed, it has not even been approached since FY 1981, the year project-based HUD low-income housing programs were effectively terminated. The Ford administration's final budget proposal requested funds for 400,000 additional HUD-subsidized low-income units. Congress cut the request, continuing a pattern that lasted through the Carter administration.”
The HCDA initiated three major policy shifts that addressed the Nixon Administration’s goals of greater reliance on the private sector and devolution of authority from HUD to local officials:
- A reduced emphasis on public housing construction, and an end to new activity in the shallow subsidy, private rental programs (such as Section 236 and Section 221(d)(3) Below Market Interest Rate programs), substituting the new Section 8 project-based new construction and substantial rehabilitation programs.
- Introduction of a mostly new approach to tenant-based rental assistance, the Section 8 Certificate program, which years later became the Housing Choice Voucher program. The HCDA terminated the Section 23 rental assistance program, which enabled public housing agencies to use federal funds to pay private owners the difference between contract rents and a set amount that low income families paid toward rent.
- Implementation of “New Federalism,” the transfer of decision-making from the federal government to state and local governments, by substituting “special revenue sharing” block grants for discreet, “categorical grants.” The HCDA eliminated seven categorical urban development programs: Urban Renewal, Model Cities, Neighborhood Facilities grants, Water and Sewer grants, Open Space-Urban Beautification-Historic Preservation grants, Public Facilities loans, and Rehabilitation loans. To receive a categorical grant, local governments applied to HUD in competition with other localities. In place of the categorical grants, the HCDA created the Community Development Block Grant (CDBG) program, which distributed funds according to a formula to each state and to all cities with populations of 50,000 or more and urban counties with populations of 200,000 or more. These “entitlement” jurisdictions had broad discretion regarding use of CDBG.
Although Section 8 and CDBG were regarded as the most significant components of the HCDA, many other changes were made, including:
- Authorizing HUD to make comprehensive planning grants (Section 701grants) to states, cities, urban counties, and metropolitan areawide organizations;
- Enacting the National Mobile Home Construction and Safety Standards Act (see Memo, 6/27);
- Authorizing HUD to provide assistance to urban homesteading programs carried out by state and local governments;
- Broadening HUD’s ability to authorize housing counseling for homeowners and tenants; and
- Authorizing HUD to carry out demonstrations to determine the economic feasibility of using solar energy for heating and cooling residential housing.
As previously reported (see Memo, 8/4), the HCDA added sex as one of the protected classes under the Fair Housing Act of 1968. President Ford mentioned this provision in his formal remarks, stating, “By prohibiting discrimination on the basis of sex in making mortgage loans, this measure will also enable millions of hardworking women and married couples to obtain the mortgage credit to which their economic position clearly entitles them. I fully support these efforts to eliminate discrimination based on race or sex.”
Related to Fair Housing, regarding CDBG’s shift from decision making in Washington, DC to the local level, President Ford noted that, “responsibility for results will be placed squarely where it belongs – at the local level…At the same time, of course, we will not abdicate the Federal Government's responsibility to oversee the way the taxpayers' money is used. In particular, we will carefully monitor the use of funds to assure that recipients fully comply with civil rights laws prohibiting discrimination.”
Another interesting activity on the part of the President and First Lady took place that morning of August 22, 1974, a signing ceremony for a proclamation designating August 26 as “Women’s Equality Day.” On August 26, 1920, the 19th Amendment to the Constitution extended the right to vote to women. The proclamation read, in part, “In 1970, on the floor of the House, I said that the Equal Rights Amendment to the Constitution was an idea whose time had come. Today I want to reaffirm my personal commitment to that amendment. The time for ratification of the Equal Rights Amendment has come just as surely as did the time for the 19th Amendment. I further urge Americans to consider the essential role of women in our society and their contribution to our economic, social and political well-being. As a Republic dedicated to liberty and justice for all, this Nation cannot deny equal status to women.” Unfortunately, the Equal Rights Amendment was not ratified by the requisite number of state legislatures and never became law.
The Daily Diary of President Gerald R. Ford, http://www.fordlibrarymuseum.gov/library/document/0036/pdd740822.pdf
Gerald R. Ford Statement on the Housing and Community Development Act of 1974, http://www.presidency.ucsb.edu/ws/index.php?pid=4632
Gerald R. Ford Remarks on Signing the Housing and Community Development Act of 1974, http://www.presidency.ucsb.edu/ws/?pid=4620
“Shifting Fortunes: Trends in housing policy and programs,” Cushing Dolbeare, Shelterforce, Issue #110, March/April 2000, http://www.shelterforce.com/online/issues/110/dolbeare.html
A Chronology of Housing Legislation and Selected Executive Actions, 1892-1992, Congressional Research Service, December 1993, pages 221 – 227, http://www.huduser.org/portal/publications/pdf/HUD-11661.pdf
A History of HUD, Lawrence L. Thompson, 2006, http://mysite.verizon.net/hudhistory/hud_history.pdf
Proclamation 4309 - Women's Equality Day, 1974, http://www.presidency.ucsb.edu/ws/index.php?pid=23865
NLIHC is recognizing its 40th anniversary throughout 2014, culminating in a commemorative event on Monday, November 17 in Washington, DC. Please save the date.