Housing policy plays out on all levels of government, with states serving as a key link between Federal dollars and local communities

1945: Community Redevelopment Act

In 1945, California passed the nation’s first state redevelopment law to combat blight, “a serious and growing menace which is hereby condemned as injurious and inimical to the public health, safety and welfare of the people.” As the law described it, blight was a terrible collective action problem: if a neighborhood was generally in decline, individual property owners became less likely to fix up their places. “The process of deterioration” could not only be “halted or corrected” unless “the entire area” were developed anew.

But how could “the entire area” be acquired? The sheer organizational complexity and the prices that owners were asking made redevelopment “so difficult and costly that it is uneconomic and as a practical matter impossible.” 

Thus, the government would step in, not to take over the private real estate market, but merely to get it back on its feet, as they saw it. “The remedying of such conditions may require the public acquisition at fair prices of adequate areas, [and] the clearance of land through demolition,” the act lamented.

The act never even tried to define blight in any real terms. “Blighted areas” only had to show “one or more” of any number of conditions ranging from “defective design” to “high density of population and overcrowding” to lack of “ventilation, light, sanitation” to “mixed character or shifting of uses” to the presence of “infant mortality, juvenile delinquency and crime.” But if the neighborhood and its people were physically (and morally) fine, merely the shape of the lots or the lack of utilities could be used to declare an area blighted. And if the neighborhood was fine and its plan was adequate, the area could still be declared blighted if there was “a prevalence of depreciated values, impaired investments” that resulted in “a reduced capacity to pay taxes.” 

Blight, in this act, is literally any bad thing in a city. Which put tremendous power in the hands of local officials. Every area had already committed one of these crimes of blight, so any neighborhood could be brought up on charges.

The legislators did seem to contemplate the new power and tools they were giving their cities. As such, cities could not just willy-nilly designate an area blighted. There was a process. A city had to have a planning commission and that body had to have developed a master plan for transportation and land-use. Then, those prerequisites met, the city had to produce some kind of report. But once the report came back, the redevelopment area could be established and the power of eminent domain unleashed.