certificates and to close titles to homes, there is another point at which an uncooperative community can develop more obstacles for the builder. . . The builder concluded: 153 [Y]ou must consider that there is a tremendous economic obligation entailed in the program of "integration in housing," and I can say to you gentlemen that there are very few builders who can stand the brunt of that economic cost. ... After all, we as builders are interested in selling houses, but we cannot possibly go through the extraordinarily expensive process of resistance from some local communities in the cases where we indicate that we are willing to sell regardless of race, color, or creed. The California State Attorney General's intervention in the Milpitas episode suggests at least one possible remedy for the plight of the builder and the nonwhite property owner faced with discriminatory action by local governmental officials. A State attorney general's office can collect the real facts concealed behind official pretexts. Moreover, it is properly the responsibility of the State government to assure that its political subdivisions do not discriminate by abuse of legal powerspowers granted by the State-and thereby restrict the residence of minority groups. 7. Conclusions In 1949 the Congress of the United States enacted legislation in which it announced a national housing objective: "A decent home and a suitable living environment for every American family." This pronouncement marked the end of a long period of piecemeal measures largely in response to crisis-first the Great Depression, and later World War II. In short, housing had been a means to the solution of greater problems, rather than an end in itself. The Housing Act of 1949 inaugurated a new housing era and a vast Federal responsibility. It is an era of which we are still a part; and it is a responsibility from which we have not retreated. The declared objective remains the unfulfilled promise of the Federal Government. It is, as President Kennedy has declared before the Congress, an unredeemed "pledge" to the American people. This pledge goes beyond an increase in the Nation's housing supply. Incorporated as its cornerstone is the constitutional principle of equal opportunity. As this Commission pointed out in its 1959 Report: It is the public policy of the United States, declared by the Congress and the President, and in accord with the purpose of the Constitution, that every American family shall have equal opportunity to secure a decent home in a good neighborhood (page 534). In the past decade 17 States and numerous cities have taken legislative and administrative action to eliminate racial discrimination in housing, but the Federal Government has not acted meaningfully in this connection. Several of the agencies that administer Federal housing programs have taken small and essentially ineffectual steps, but neither the President nor Congress has exerted the authority available. The Federal Government has been without question the major force in the expansion of the housing and home finance industries. Its funds, its credit, many of its facilities, and its name have been made increasingly available in an effort to achieve the professed goal of “a decent home and a suitable living environment for every American family." Governmental measures include cash contributions to locali ties, FHA and VA mortgage insurance and guarantees, FNMA mortgage purchases and special assistance, chartering and support of financial institutions, as well as insurance of their accounts. But the benefits of these governmental activities have not been available to the American people on an equal-opportunity basis. The Commission's first housing study revealed the central fact that housing was "the one commodity in the American market . . . not freely available on equal terms to everyone who can afford to pay." The present study emphasizes the extensive nature of the Federal contribution. The private housing and home finance industries, through which governmental housing assistance largely reaches the American people, rely heavily on that contribution. They profit from the benefits that the Federal Government offers-and on racial grounds deny large numbers of Americans equal housing opportunity. At all levels of the housing and home finance industries-from the builder and the lender to the real estate broker, and often even the local housing authority— Federal resources are utilized to accentuate this denial. This is the central finding of the Commission's present study. Denial of equal housing opportunity means essentially the deliberate exclusion of many minority group members from a large part of the housing market and to a large extent confinement in deteriorating ghettos. It involves more than poverty and slums, for it extends to the denial of a fundamental part of freedom: choice in an open, competitive market. This is a strange phenomenon in a Nation that cherishes individual freedom. For in housing, as elsewhere, the essence of freedom is choice. Nevertheless Federal programs, Federal benefits, Federal resources have been widely, if indirectly, used in a discriminatory manner— and the Federal Government has done virtually nothing to prevent it. SUPERVISION OF LENDING INSTITUTIONS At the end of 1960 the Nation's nonfarm home mortgage debt stood at $160 billion. More than 60 percent of this amount ($100 billion) is held by financial institutions that are benefited in varying degrees by the Federal Government and closely supervised by one or more of four Federal regulatory agencies-the Federal Home Loan Bank Board, the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation. National banks (regulated by the Comptroller of the Currency) and Federal savings and loan associations (regulated by the Federal Home Loan Bank Board) operate under Federal charters and are subject to the exclusive control of the Federal Government. These institutions represent almost $180 billion in assets and hold $44 billion in nonfarm home mortgages. Member savings and loan associations of the Federal Home Loan Bank System and member banks of the Federal Reserve System receive the benefits of a nationwide, governmentally controlled system of financial institutions, and are regulated by the Federal Home Loan Bank Board (in the case of savings and loan associations) and the Board of Governors of the Federal Reserve System (in the case of banks). These institutions represent almost $290 billion in assets and hold $75 billion in nonfarm home mortgages. Insured associations and banks receive the benefit of Federal insurance of accounts and deposits, and are regulated, in the case of savings and loan associations, by the Federal Savings and Loan Insurance Corporation (under the direction of the Federal Home Loan Bank Board) and, in the case of banks, by the Federal Deposit Insurance Corporation. These institutions represent almost $360 billion in assets and hold $99 billion in nonfarm residential mortgages. According to the evidence that the Commission has received from many parts of the country, these institutions are a major factor in the denial of equal housing opportunity. Mortgage credit, upon which homeownership so largely depends, is often denied to members of minority groups for reasons unrelated to their individual characters or credit worthiness, but turning solely on race or color. Although all four of the Federal supervisory agencies appear to agree that outright discrimination is improper, none apparently has conducted any inquiry into the extent to which the institutions under their supervision engage in it. Until recently none had proclaimed or followed any antidiscrimination policy. In June 1961, however, the Federal Home Loan Bank Board adopted a resolution opposing discrimination by financial institutions over which it has supervisory authority. The Board further indicated that its examiners had been advised of this resolution for their guidance in examining member institutions, and that if discrimination were found supervisory action would be taken to abolish it. None of the three other agencies has given any indication of a similar policy. A broad array of means is available to each of these agencies to reduce discrimination in mortgage lending. Except for the Federal Home Loan Bank Board, however, they appear to believe that this is a private matter with which they are not concerned. In addition, all of them (including the Federal Home Loan Bank Board) have expressed the view that race may properly be a consideration in deciding whether to make a real estate loan. The introduction of minority group members into a white neighborhood, they appear to believe, may predictably cause a decline in property values. This view of the propriety of racial consideration is not shared by FHA, VA, FNMA, nor the Voluntary Home Mortgage Credit Program. Moreover modern real estate opinion, supported by several studies on the relation of race and property values, tends to cast doubt on the view that the one necessarily affects the other. FEDERAL ASSISTANCE TO HOME FINANCE The agencies most directly involved in Federal assistance to home finance are FHA, VA, and FNMA. Their policies, unlike those of the Federal banking agencies, are affirmatively, if not effectively, in favor of equal housing opportunity for all people. Each has expressed itself as opposed to the inclusion of race as a factor in its operating decisions. None of them, however, has taken effective steps to insure that the benefits they offer are made available without regard to race. FHA and VA profess a policy, not yet actually applied in any case, of refusing to do business with any builder who violates State antidiscrimination housing laws. In States that do not have such laws, neither of these agencies requires builders, developers, or lenders to make available on an equal opportunity basis homes financed with its assistance. The full extent of FNMA's role in reducing housing discrimination is in not itself affirmatively discriminating. Of the three agencies, only FHA has expressed anything but reluctance to take effective action. FHA Commissioner Hardy is unwilling, however, to attempt any remedial measures without an express directive from the President or Congress. VA has concluded that effective remedial measures would be undesirable. FNMA has difficulty in seeing that it has anything to do with the problem of housing discrimination. Action by these three agencies could effectively reduce inequality of housing opportunity. In view of their key roles in helping to achieve the objective of "a decent home and a suitable living environment for every American family," the question is whether they can justifiably do less. PUBLIC HOUSING AND ELDERLY HOUSING In connection with some Federal housing programs, the Federal Government has offered direct aid as distinct from credit facilities. Public housing, one of its oldest programs, involves Federal grants and yearly contributions to local housing authorities for the purpose of establishing and maintaining low-rent accommodations for those who, because of |