Units for about 650,000 low-income people, but mostly for the homeless, were started.
Progressives early in the 20th century had argued that improving the physical environment of poorer citizens would improve their quality of life and chances for success (and cause better social behavior). As governor of
New York,
Al Smith began public housing programs for low-income employed workers. US Senator
Robert F. Wagner (D-New York) carried those beliefs into the 1930s, when he was a power in the
United States Congress. From 1933 to 1937, the
Public Works Administration (PWA) under
Harold Ickes razed 10,000 slum units and built 22,000 new units, with the primary goal of providing construction jobs. Ickes was a strong friend of African Americans and reserved half the units for them. The courts ruled the PWA lacked
eminent domain power to condemn
slums, so the Housing Act of 1937 envisioned a long-term federal role under the new agency, the USHA. This Housing Act of 1937 was strongly influenced by
Catherine Bauer. She became its Director of Information and Research, a position she held for two years. The private sector saw an economic danger in nationalized housing, and insisted that there be a clear differentiation between the main
housing industry and
welfare programs focused on people too poor to buy but who were worthy and deserved help. As Senator Wagner said, there was a concerted effort at "avoiding competition" between the private and public sectors. The law required a 20 percent gap between the upper income limits for admission to
public housing projects and the lowest limits at which the private sector provided decent housing. Wagner obtained support from conservative leaders
Robert A. Taft and
Allen Ellender to guarantee a bipartisan approach. Ellender insisted and civil rights groups accepted, that the units be
racially segregated. Critics eventually pointed to the
culture of poverty, violence, drugs, crime and hopelessness that thrived in the "vertical ghetto" as a refutation of the original Progressive theory. Defenders of public housing point out that the program was beset with limitations at its outset, has never been truly fully funded, and continues to serve a limited income population that the private real estate sector has never tried to serve. ==Organizational history==