Housing in the Post-\(/ar Era

By Paul Endicott, President United States Savings and Loan League, and of the Home Builders' Loan Association, Pomona, Calif.

It is common talk today that we are going to live in a different world after the war, as if everyone would be doing something different from his present occupation for a living when peace comes. There are millions of us in businesses of one sort or another, however, who would rather keep the jobs we have. It has been my observation that men involved in building, whether in selling building supplies or in contracting and actual building in all its ramifications, enjoy their occupation. They like it, just as I like the running of a financial institution which lends money for people to buy and build homes.

Therefore, suppose we take a look at the present and the future of building as an industry composed of the many small, independent units which now characterize it, of the men who relish this job of selling, and of creating homes. That kind of an industry depends on the continued domination of the housing field by private enterprise. The big 400 to 500-unit government housing project doesn't do much to increase the business of the material dealers in the community in which it is built, except for odds and ends here and there which somebody forgot to order from the big retailers or wholesalers who handled the job. If a local contractor should happen to get one of these contracts he finds himself so surrounded and entangled by the red-tape of plans made by a staff several hundred miles away and by the arbitrary decisions and unavoidable delays of such a set-up that his profits dwindle and he begins to doubt the wisdom of having taken the job at all. He isn't too likely to try it twice.

All this has not been a very serious menace to the individual units of the building industry to date. After all, during the 16 months between January l, l94O and May I, 1941, private residential construction accounted f'or $1,76,163,W of contracts, while public construction was doing only $273,52I,m. By number of units, we havb seen private enterpriseButting up new shelter f.or 599,302 f.amilies while public construction accounted for less than a seventh of that number. Public housing has not been suf- ficient in most localities these last few years to make itself felt seriously by the community builder.

But there is a real reason why we should think more about this today. Some influential and persistent people are planning a different situation after the war. All you need do is to study the plans of the people who are most "housingconscious" in this country. They have elaborate visions for the post-war period, for rehousing America, for taking up the sldck in employment which will come after the armament boom dies down by spending billions on new places to live. Building these new residential units for people to buy and occupy as owners isn't very prominent in their thinking. Already the enthusiasts about public housing feel that the middle third of the population, middle as to income and standard of living, that is, will have to be housed at least partially by public construction.

This, as we all know, is the entering wedge which they hope to drive in order eventually to put all of that middle third of the population in government-owned housing projects which provide, with subsidies from the public, not only housing accommodations but elaborate plans for living arrangements all the way from organization of clubs and recreational facilities to tenant training. They are planning a giant housing program which will be embodied in multiunit affairs, which means materials ordered in large quantities from central sources, and building directed from Washington even if by way of the local housing authority. If this program is actually let loose on the country, the builder and the building materials merchant will really find that the world is mighty different after the war.

This doesn't have to happen. Just because some people with influence and tenacity are planning something is no reason why people who are in fact much more numerous and who think differenly shouldn't be planning an opposite attack. It does seem rather imperative, though, that those who do not want the public housing plan to eventuate should be thinking and organizing and cooperating with others who have the same idea. The goal of such thinking and planning would be an alternate plan for housing after the war, an alternate plan for private enterprise to do as big a job of taking up the slack in employment, of keeping money in circulation, of putting people in better places to live as public housing ever could.

There are many elements which have to go into such a plan. Certainly the keeping of financing costs low is imperative if any private enterprise system is going to succeed with the American people in the future. I mean not only the direct costs of financing such as interest and commissions, even service charges. I refer also to the incidental or hidden costs of outmoded mortgage systems, with their refinancing charges and such. The monthly cost of home ownership must be maintained at a low level through long term loans without necessarily involving the credit of the United States g'overnment to guarantee the lender against loss. In a period when the resources of the country have been strained to new limits to provids armaments over a number of years, it would seem necessary to relieve the government of any expenses or risks in connection with the private financing of home ownership. That is one of the goals which any private enterprise plan for post-war home building should keep ever before it. For a third thing, the plan of private enterprise must come to grips with the problem of instability in the real estate market. Machinery should be included which will be effective in eliminating booms, for that is a corollary to eliminating depressions. And we in the building business know that depressions are fertile ground for attacks on private enterprise, unjustified though they may be.

This era will demand of private enterprise methods of producing housing better and more cheaply. Of course this problem has confronted the industry for many years past and some headway has been made here and there in solving it. But the answer is still not in sight. Ideas such as maintaining an annual wage in the building trades in order to reduce the cost of production have not been exhausted, have not been thoroughly studied or experimented with, as a matter of fact. Certainly a basic philosophy to be tried out in such a period of demand for less expensive home building is the dependence on a reasonable return to the building industry based on volume all along the line, rather than on high mark-ups for large profits on small volume.

This very much needed program for post-war private enterprise housing must also face the problem that some buildings in this country have lived too long and can easily approach the slum status. An effective way to enforce sanitary codes for dwelling units would put economic pressure on the owners either to tear those houses down or to completely rehabilitate them. A search for such an effective piece of machinery should be under way right now.

Let's remember that private enterprise has been accused of blindness to the obvious sequence of events, in years that have passed. The accusation, if justified, is by no means inherent in the system. Private enterprise in the building industry can plan ahead, cooperate, swing its many units into logical, strategic action and save the great majority of the communities in America from public housing. But it will have to have a plan. It will have to act as a unit. It will need to be willing to put up a fight and make some sacrifices if need be to preserve something we think is an essential part of the American way of life.