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Open Access Publications from the University of California

Housing Policy and Economic Restructuring in the United States


The Stock Market Crash of 1929 and the Jean years of the Depression that followed in its wake, brought about a fundamental transformation in the structure of American free enterprise. The legislation enacted by the Roosevelt administration that put the economy on a new footing, also established the basis for the nation's first systematic housing policy, eventually legislated officiallyas The Housing Act of 1949.

When the economy collapsed, the mortgage system collapsed as well, adding to the depth of the plunge into the Depression. These conditions precipitated massive social protest movements, especially among industrial workers and the unemployed. The dilemma faced by the Roosevelt administration was how to preserve the basic features of the market system, while at the same time incorporate but circumscribe the social protest of millions of Americans. Out of this dilemma emerged a new type of free enterprise system in which the State, for the first time, began to play a decisive role in the operations of the country's financial markets. The other pro­ duct of Roosevelt's actions was perhaps even more significant. This was the establishment of what has been termed "The Welfare State " .

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