When, in the summer of 1933, Congress authorized loans and grants to states, municipalities, and other public bodies for slum clearance and low-cost housing, only two cities in the country, were prepared under existing laws and ordinances to take advantage of the offer. Ten states during the next two years passed housing authority laws, but at the end of 1935, when the last of the projects developed by the P. W. A. entered the construction phase, only a third of the cities with projects had housing authorities.
The authorities were, moreover, for the most part new and inexperienced. (Fisher, 1959) In 1938, 30 states have housing-authority legislation. Forty-nine authorities have been established under these laws, and a good many have gained considerable experience through cooperation with the federal government in the development of its “demonstration” projects. Under the Wagner-Steagall Act, it is mandatory that the projects already built be leased or sold to the local authorities “as soon as practicable” and that all future projects be developed by them.
(Fisher, 1959, p. 51-6) With local responsibility for the development and management of housing has come the requirement that the states or communities share in the cost. This injected a new element of uncertainty into the program. It was unquestionably desirable in principle that the localities share the cost of providing adequate housing accommodations for their citizens. However, the local units of government were not then in a position to do so and that the whole program would be jeopardized by this provision.
Meanwhile other competent could be pointed out that upon analysis the requirements seem fairly lenient and entail no more local contribution than has been made to existed projects. (Hunt, 2005) The third big handicap of the housing program during the 1933-37 years — centralized control of an undertaking peculiarly subject to local conditions, and therefore unsuited to central control — had definitely been put to an end by the United States Housing Act of 1937. Centralized control was in the first place brought about through circumstances rather than by legislative necessity.
Provisions The 1937 Act stated that the contributions to local authorities would require an appropriations vote by the Congress. It authorized direct relations between the U. S. Housing Authority and the local public housing agencies. In those years public housing agencies were “defined as any state, county, municipal, or other government entity or public body, which is authorized to engage in the development of administration of low-rent or slum clearance” (Fisher, 1959, p. 108).
The law held that grants, that is annual contributions provided by the U. S. Housing Authority, would be given only to those local authorities that abided by the law’s guidelines concerning construction and materials cost. The Housing Act of 1937 created an implementary agency called the Unites States Housing Authority (USHA). The office’s principal duty was to implement the low-rent programs of the 1937 Act. The primary source of revenue was an allocation from Congress of one million dollars.
“The chief function of the USHA under the 1937 Act is to make loans and annual contributions or one-time capital grants to help in developing and administering low-rent housing and slum-clearance projects” (Fisher, 1959. p. 98). The problem the agency faced was that some jurisdictions wanted to spend the bulk of their grant money on employment opportunities, hence, increasing construction cost and limiting the actual numbers of units built. Other jurisdictions desperately needed the units and cared little about employment opportunities.