HUD Created as Cabinet Department, Inherits FHA Discriminatory Practices

President Johnson signs legislation creating the Department of Housing and Urban Development (HUD) as a Cabinet-level agency, consolidating federal housing programs under one roof. Robert C. Weaver becomes the first HUD Secretary and the first African American Cabinet member. However, HUD inherits the Federal Housing Administration’s legacy of discriminatory practices and faces industry opposition to meaningful reform.

The new department consolidates the Housing and Home Finance Agency, FHA, Public Housing Administration, and Federal National Mortgage Association under unified leadership. Johnson touts HUD as central to his Great Society vision of eliminating urban poverty and blight. However, the agency’s creation does not immediately change the discriminatory practices embedded in federal housing policy since the 1930s.

FHA underwriting manuals continue recommending racial homogeneity for mortgage insurance approval until 1968. The National Association of Real Estate Boards and National Association of Home Builders, which lobbied against HUD’s creation, maintain influence over housing policy through their relationships with Congressional appropriations committees. Urban renewal programs inherited by HUD continue displacing minority communities. HUD proves unable to enforce fair housing principles against entrenched industry opposition until the Fair Housing Act passes in 1968, and even then enforcement remains weak. The department’s history demonstrates how creating new agencies without dismantling discriminatory institutional practices merely reorganizes rather than reforms systematic racism in housing policy.