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  • January 2008 (Revised September 2009)
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Financing American Housing Construction in the Aftermath of War

By: David Moss and Cole Bolton
  • Format:Print
  • | Language:English
  • | Pages:30
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Abstract

At the start of WWI, the United States faced a significant housing shortage. Public officials feared the spread of disease—and even communism—in the nation's cramped urban centers where vacancy rates held near zero and families often "doubled up" in single-housing units. Hoping to spark a burst of new construction, New York Senator William Calder called for the creation of eleven regional Federal Building Loan Banks that would serve as a new source of funds for mortgage lenders. The proposal was controversial, however. Opponents disliked the fact that the Federal Building Loan Banks would have the authority to issue tax-free, mortgage-backed bonds, and many claimed that the private market would solve the housing shortage on its own. Proponents of the bill, meanwhile, believed that it was necessary to stave off a potentially disastrous and protracted housing shortage, and they cited the long-successful mortgage bond markets in France and Germany as evidence that their plan could succeed. Federal lawmakers had to assess the arguments on both sides and render a decision.

Keywords

Central Banking; Bonds; Mortgages; Government Legislation; Business History; Housing; Banking Industry; United States

Citation

Moss, David, and Cole Bolton. "Financing American Housing Construction in the Aftermath of War." Harvard Business School Case 708-032, January 2008. (Revised September 2009.)
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About The Author

David A. Moss

Business, Government and the International Economy
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Related Work

    • January 2008 (Revised September 2009)
    • Faculty Research

    Financing American Housing Construction in the Aftermath of War

    By: David Moss and Cole Bolton
Related Work
  • Financing American Housing Construction in the Aftermath of War By: David Moss and Cole Bolton
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