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The Urban Renewal program began with the Housing Act of 1949 and was terminated by Congress in 1973. Local public agencies used a mixture of local and federal funds plus the power of eminent domain to acquire and clear redevelopment sites. Sites or portions of sites were then made available to developers at a fraction of their cost. The combination of heavy subsidy and eminent domain was intended to solve two major obstacles to urban redevelopment: problems of residual value and site assembly.

As Urban Renewal progressed, it acquired many enemies, primarily because of its displacement effects. By the time Congress ended the program, it had demolished approximately 600,000 housing units, forcing perhaps 2 million people, most of them having low or moderate income, to relocate. It also forced the closure of thousands of small businesses, many of which never reopened. The destruction of the social and economic fabric of neighborhoods was ultimately considered to be an unacceptably high cost.

The year after Urban Renewal was ended, Congress passed the Housing and Community Development Act of 1974. In place of Urban Renewal's clear-and-rebuild approach, community development programs have tended to emphasize preservation and improvement. The urban homesteading program noted in connection with the city of Baltimore typifies the emphasis on preserving the existing urban fabric that characterizes many CD programs. As a reaction to what were regarded as the excesses of Urban Renewal, CD legislation contains numerous requirements for citizen participation, particularly that of low- and moderate-income citizens.

Housing plans may be narrowly keyed to federal funding programs, or they may take a broader approach. In the latter case, estimates of housing demand based on employment and demographic studies are compared with projections of future supply in order to estimate future needs. In general, housing is one of the more frustrating items with which the planner deals. The sums of money on the public side are very small compared with total expenditures. Thus the capacity of government programs to affect the basic housing picture is limited. In addition, housing issues are often major sources of social and political controversy within the community.

The chapter ends with the problem of massive foreclosures brought about by the bubble in housing prices that began to collapse in 2006 and an account of the reckless mortgage lending that was one cause of the bubble. Widespread foreclosures and the consequent abandonment of housing pose very difficult problems for municipalities because of the threat they pose to the overall state of the municipality's housing stock and the erosion of the municipal tax base that they cause. This chapter notes some of the limited steps that municipalities can take to deal with the problem as well as a number of steps the federal government has taken to strengthen the market for housing and reduce the number of foreclosures.

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