the Veterans Administration (va) mortgage accounts; only 2 percent of new housing starts were publicly financed.

In 1949, however, another component of Wave Three—the Urban Redevelopment Act (ura)—took cognizance of the fact that major internal migrations, differentiated by race and class, were destabilizing the centers of older cities. ura transformed the New Deal's modest public housingslum clearance program into a far more comprehensive and costly undertaking to which a large public budget had to be allocated. The subsidy system underwent a substantial expansion. Moreover, there was a promise of much more to come. In the ura Congress declared its commitment to "a decent home in a suitable environment for every American family." That bold statement was as close as the federal government would come to pronouncing housing as an entitlement—a goal not destined to be fulfilled.

The fourth wave, initiated during President Kennedy's New Frontier and enormously expanded during President Johnson's Great Society, is, with many modifications and contractions, still in force today. It was primarily a response to the revelation of submerged but pervasive poverty. But it also recognized the emerging housing problems of the near-poor, those above public housing but below fha-va levels. The bracket creep had commenced. A profusion of subsidized rental housing programs was aimed at the in-betweens, mainly in the form of mortgages at below-market rates. During Wave Four, as real housing costs rose further, the span of housing concern increasingly extended into the middle class. But for that class, subsidy was left principally to the tax code. There was a reaffirmation—despite the insistent reproach of policy analysts—of unlimited homeownership deductions for interest and taxes. Also included were accelerated depreciation for rental housing, unlimited use by state and local governments of tax-exempt housing bonds, which reduced mortgage interest rates for middle-income renters and owners, and an eased capital-gains tax on housing resales. In 1986, however, the tax reform legislation imposed varying degrees of restrictions on shelter depreciation and on house sales.

Wave Four included also a response to the civil rights revolution. Almost for the first time, the federal government confronted the issue of racially segregated housing not merely as an evil per se but also as an invincible impediment to the integration of schools and jobs. Wave Four was more comprehensive than its predecessors and provided or set in train a record volume of subsidized units. Although hopes for housing as entitlement had waned, the Great Society ended with a commitment to build, within the 1968-1978 decade, 26 million dwelling units for the benefit of every economic class, with 6 million assigned to low-income families.