Lecture 3 - January 23:
Golden Age of Suburbian (Period of most intense suburbanization in history); after WWI
Reasons for postwar suburbanization. Push and pull factors
1. Housing pressures: baby boomers and veterans (push)
- After WWI, there’s been spike in population both in Canada and the US. This happened
because in 1939-45, large portion of soldiers came back from war and started reproducing.
- With the return of these soldiers, families were started. One concern is where will these
people live? This issue is intensified with the birth of baby boomers.
o Since the 1920s, no new houses were built. In 1929, the great depression began
and continued thru beyond the 1930s. Then, the WWII started as well and gave
no chance for new houses to be built.
- Initially, the veterans moved to the cities but there were housing shortages. So, lots of
veterans and their wives had to move in with their family. This created very crowded
o This did not make things better, especially when babies came into the picture
o In American culture, people were not used to living in multi-generation
households. Being forced into this kind of living arrangement made people very
o This stress was then put onto the government to create more housing
The government had a problem – the way housing was done. The
tradition had been to put small amount of houses at a time.
o What the government did to deal with the political pressure was to create new
systems. Realestate companies started to mass produce houses. For them to do so,
government provided incentives such as mortgages and financing.
2. Liberalization of mortgage financing (pull)
- Ways mortgage loans was provided liberalized
- Prior to this time, people got money for housing in a variety of different ways
o Family, insurance companies (gave long term loans at a low interest rate)
- At this time, most people were not in a position to buy a house (financially). Soldiers
didn’t make much money to begin with and did not have money saved up. How could
these people pay for their homes?
o Government crafted a new way of financing housing to help them
o One thing they did was they dictated that down payments would be lowered. In
most cases, the most you had to put down on a home would be 5% of the value of
the house. Back in those days, a really good home might have cost only 10k. 5%
of that would have been $500.
o Some homes in the U.S. did not even need a down payment
o Another action government did was created Central Mortgage and Housing
Corporation (CMHC). New homes were insured by CMHCs; if people paid the
down payment but was unable to make monthly payments, the CMHC ensured
these houses so that the builders would get paid for sure. o Federal government, as we can see, can highly influence the housing market with
o Other policies gave incentives that made it profitable for builders to build more
houses. This also helped satisfy housing demands
- VA loan guarantees (U.S.):