Housing Markets, Government Programs, and Race during the Great Depression

• Main Author: Kollmann, Trevor Matthew
• Other Authors: Fishback, Price V.
• Language: en
• Published: The University of Arizona. 2011
• Subjects: Great Depression; Housing; New Deal; Segregation
• Online Access: http://hdl.handle.net/10150/145438

The thesis focuses on the role of race and poverty programs in influencing the housing market in the 1930s. I investigate claims that African American in-migration resulted in the decline of neighborhood property values in New York during the Great Depression. I find that contrary to the expectations of economists and government officials, African American migration initially increased housing values. However, this premium disappeared as the neighborhood was increasingly settled by African Americans.During the 1930s the federal and state governments introduced several programs designed to help people stay in their homes. In my analysis using U.S. Census data from 1920, 1930, and 1940, the results suggest that among the New Deal programs for non-farm households, the Federal Housing Administration was the only program that had a positive and statistically significant influence on the probability of home ownership for both white and black households. The Home Owners' Loan Corporation appears to have had no influence on home ownership rates. Among the farm programs, Agricultural Adjustment Administration (AAA) grants are negatively associated with white farm home ownership rates, but had no statistically significant effect for black farmers which are consistent with previous findings that found the AAA spurred black out-migration from the rural south. Mortgage moratorium laws were associated with an increase in white farmers home ownership rates.Federal public housing for the poor was introduced during the New Deal. I examine how housing officials selected the location of public housing and measures the effect of public housing on surrounding contract rents in New York City between 1934 and 1940. I find that public housing was constructed in poor, crowded neighborhoods with nearby public transportation. My findings also suggest that public housing increased the share of contract rents throughout the city. The magnitude of the effect also appeared to not dissipate as the distance to public housing increased. However, my results suggest that the early public housing projects constructed by the Public Works Administration led to greater spillovers in in contract rents than the later projects constructed by the United States Housing Authority.