Housing--a Comparison

THE Midway Man — call him John Doe — who attended the World’s Fair in Chicago in 1893 had never seen an automobile until that exposition lured a Benz across the ocean for display. His streets were lighted by gas, his house by kerosene lamps. He screened insects out mostly with mosquito netting instead of wire. His diet lacked steady doses of citrus fruits and leafy green vegetables. He earned $500 a year in good years, and on it supported a wife and four children.

We know these facts about Midway Man because the State of New York officially reported his condition. That state had housing on its conscience, and one of its exhibits at the Chicago Fair was a Workingman’s Model Home which could be erected anywhere in New York State, except in New York City or Brooklyn, for $1000, to rent at $10 a month. To prove that this was no economic mirage, the Director of the Exhibit, Katherine Bement Davis, gathered data on wages and living costs, which were reported in all possible detail.1 Also, those thorough New Yorkers installed a model family in their model home at Chicago, and furnished them with materials for model meals of the Midway Period, on which the entire family were fed at a cost of 55 cents per day.

Here, then, is a complete picture of the common laborer’s economic life in that period. His rough average of $10 a week was ‘the income of an industrious laborer in times when steady work could be had.’ He had a wife and four children; for budgeting purposes these were rated as a girl of ten, boy of eight, girl of five, and a baby boy in the cradle. His wife did no work outside the home, but did all the work inside it, including considerable sewing and clothes making for the children, all the baking, and a good deal of food preserving.

What kind of housing could this workingman of 1893 provide for his wife and four children on his $10 a week? The State’s answer was a two-story frame house, twenty by twenty-eight feet, containing five rooms and bath. It was lighted by gas, heated by stoves, and possessed a complete, though unfloored, cellar. Not a bad-looking house even by modern standards, it proved exceedingly popular, several editions of a book containing the plans being sold out on the spot. Probably every American community, from city to hamlet, holds one or more of these old-time modern homes. The architect, Professor W. S. Perry of Pratt Institute, won the favor of housewives by paying special attention to the saving of steps, which everyone in that line has been doing ever since.

This house, finished and painted throughout but unblessed by bush or flower, cost $1000 except in dense urban areas. Contractors made a reasonable profit in erecting it at that figure; investors, adding the lot value, were assured, at the prescribed rental, of reasonable return on all costs. In those days no one coddled the laborer either as home owner or as renter. The rent had to cover everything, including the going interest rate to a bank unprotected by government insurance. All substantial interests received their cuts from the buyer’s $1000 or the tenant’s $10 a month, and on that basis home building flourished. Now, even with aid from government, it languishes. Why?

The root reason is simple — a house is n’t a good buy to-day. It costs too much money and involves too much risk for the average American to undertake, either for his own occupancy or as an investment, to be rented.

Our workingman of 1893, and his standard family of four children, lived on the following budget in their $10-amonth model house: —

Income $500
Rent $120
Fuel 30
Clothing 100
Food 200
Miscellaneous 50
Total $500

Fortunately the report of 1893 is detailed enough so that construction costs and living costs can both be checked against modern prices in the same areas. Every stick of lumber, pane of glass, and piece of hardware in the dwelling is listed. Furniture and equipment, clothing and food, are fully described and quoted at Brooklyn prices. These were checked in the same area recently, with the following results.

The $1000 house of 1893 would cost $2500 to $4000 in 1937, the amount depending on labor conditions at point of erection.

Furniture and equipment listed for a total cost of $300 in 1893 can be bought to-day for one third to one fourth less, with quality better in some cases and worse in others. Kitchenware, for instance, is much cheaper, but probably less durable in the cheap grades. However, people are now accustomed to more possessions. The 1893 appropriation for books and reading is painfully low; there is no mention of music and musical instruments; now nearly every house has a radio or phonograph or both.

Clothing sells in Brooklyn to-day for about what it did in 1893 when the entire clothing needs of a family are considered. Women’s and children’s clothing is actually cheaper, men’s somewhat more expensive.

Food, however, costs almost double. Of twenty-seven food items purchased at retail in Brooklyn in April 1893, and again in the same area in December 1937, present prices were higher on fifteen items, lower on eight, and unchanged on four. The impressive advances were mostly in meats, fish, dairy products, and eggs; the recessions in dry cereals, vegetables, and fruits. Sugar, hominy, and corn meal were practically the same, within fractions of a cent per pound. All meats except mutton doubled in price or more, while the largest drop was in oatmeal, from four to two cents per pound. Not all prices, of course, were comparable with those of to-day.

No dietitian of 1938 would approve the diet recommended and eaten in the model workingman’s home at the Chicago Fair. Those meals were hopelessly deficient in the modern standbys — citrus fruits and leafy green vegetables. There is no trace of an orange, banana, tomato, or head of lettuce, once considered luxuries but now rated as necessities. In 1893, you see, no housewife had ever heard of vitamins, nor would she hear of them for another twenty years. The triumph of the vitamin theory is neatly registered in the rise of cow’s liver from eight cents a pound in 1893 to fifty cents in 1937, the largest jump in the whole food list. In general, the improved diet of to-day can be bought for about twice the money the workingman of that model family spent for its fare.

The contrast in living costs can now be reduced to simple figures: —

1893 1937 Per cent difference
Rent $120 a year $300 +150
Food 200 ” ” 400 +100
Clothing 100 ” ” 100 no change
Furniture 300 per house 225 -25

Observe that two groups of factory industries—(1) textiles and clothing, (2) woodworking, metal fabrication, and furniture — have kept prices at or below the old level, in spite of rising wages and the decreasing value of money. In other words, makers of clothing and furniture have paid a social dividend by cutting costs through improved processes and passing some of their savings on to the public. The food industry — composed of farmers, packers, and canners — has not done so well, but at least the advance in food costs has not outrun the advance in wages.

But housing has paid no social dividend whatever. The house of 1893 costs as much in toil-time and labor-wage as it ever did, and in some localities it costs more. On the most favorable basis of modern construction the model home of 1893, which cost $1000 then, would now cost $2500. Using that figure as a basis, we have this parallel: —

Cost Rent Wage
1893 $1000 $10 a month $10 a week
1937 2500 25 ” ” 25 ” ”

These figures are for rural and village districts where non-union labor could be used. In urban areas the cost of construction would run to $4000, entailing a $40-a-month rental and a $40-a-week wage.

In neither environment have wages kept pace with housing costs. Where the 1893 house can be built to-day for $2500, the wages of common labor have not reached $1200 a year; and where the house would cost $40 a month to rent or service, similar wages have not reached $2000 a year. Taxes enter the picture oppressively. The $1000 house of 1893 was probably taxed at about $15 a thousand on a two-thirds valuation of $600, or $9 a year. Now the same house at $2500 in a comparable area would face a tax prospect of $25 a thousand on $1700 valuation, or about $40 a year. In a high-priced area the tax load might be as high as $90 a year. Of course these taxes represent considerable values and advantages to both tenants and landlords — better schools, roads, police and fire protection, recreational advantages in park and playgrounds, and community control through zoning. But these costs and charges are not easily wrung out of the workingman’s small budget, either as taxes if he owns or as rent if he is a tenant.

In 1929, a banner year economically, the average income of more than 70 per cent of American families was $1300. For the largest class of families, $1000 to $1500, average income was just short of $1250. Bear in mind that these are family incomes, with more than one breadwinner in one family out of six. In New York City, where higher than average wages prevail, nearly one quarter of all families draw less than $1000 income. For better or worse, the head of the family who needs better shelter today is a $100-a-month man, who can pay $22 rent. Often there is n’t that much available. The nearly 4,000,000 families who earned from $500 to $1000 in 1929 averaged only $766 a year, and their effective expenditure for housing could hardly be more than $15 a month.

Thus we approach the income point of 1893. A $500-a-year man of 1893 could live in a new four-room house of substantial value without asking any help from anyone, not even from the government. If the business of creating shelter had kept pace with the business of creating furniture, the $766-a-year man of to-day could afford to live in exactly as good a house. Under the lower interest rates and amortization charges of the present, the house might even be bought on an easy-payment plan by a $1000 man wdth a presumably steady job. But at going prices and rents, and with present construction methods, it is unwise for laborers to buy and almost impossible for anyone to build decent rental housing for working folk in the lower and more populous income brackets.

At this point appear the optimists with their various ’ways out.’ Their proposals take three main channels.

(1) The energizers say: ‘Clear the decks so that cheap money will flow into housebuilding. With government insurance of mortgages to provide stability, and a smaller down payment, it becomes possible for men of small means to finance homes less expensively. Under deferred payments the heavy charge is interest; cut that and the burden is greatly reduced.’ The catch is that the tax burden is not thereby decreased, and, indeed, may increase greatly. This plan is now to be tried with the full help of government.

(2) The subsidizers say: ‘Use government money to finance housing construction for poor people. There are minima of shelter below which families should not be allowed to sink. Instead of buying groceries and paying rent for a family man on relief, set him and others like him to producing materials and building houses for themselves. If one third of relief funds were spent on new and better shelter instead of rent for rookeries, the Federal Government could promote a housing and raw-material boom of such proportions that laboring men could buy their own clothes and groceries.’

(3) But the organizers say: ‘Let us bring in mass production. The root trouble with housing is that its assembly processes are out of date. A house is still a tailor-made unit put together where conditions cannot be controlled and by ill-directed labor. Ways have been found to make and sell clothes, shoes, and furniture more cheaply, even though the men working at those tasks receive higher wages. But shelter is still at the mercy of primitive operations. Obviously the only way to build a new house for a workingman of low income is to reduce the time and labor involved in construction and assembly. A host of wasteful practices to which contractors, supply houses, unions, banks, lawyers, and even legislatures have contributed will have to go out the window. More complete fabrication in factories and swifter assembly on the ground — these will eventually give the little fellow, for 20 per cent of his income, better shelter than he has ever been able to buy since the beginning of time. Just wait until we get started.’

I have seen a model of a neat little steel house (with garage attached) which could be fabricated, erected, and landscaped for $1500 if ten thousand buyers would beckon in any given season. A little gem of a house it is as regards ease of housekeeping, shrewd disposal of space, intelligent use of materials and mechanisms. But how is any manufacturer going to find ten thousand or a hundred thousand persons who will buy precisely that kind of modern shelter, cheap and efficient though it may be? Unfilled demand, arrived at statistically, is not effective demand.

Housing never has been an industry in the modern sense of the word. It is never likely to become one until, in common with other well-conducted enterprises, it pays both reasonable profits and social dividends in ever-increasing consumer values. When shelter again becomes a good buy, when it once more represents to a workingman as much value in effective toil as do the dollars required to purchase it, there will be a building boom lively enough to please everyone. To achieve this will require reduction of construction costs and taxes as well as finance charges. Then the grandson of the man who bought or built the model home of 1893 will again be back in the market. After that has been accomplished by the energizers and organizers working together, the cost of housing may be so low that there will be little left for the subsidizers to discuss.

  1. The Report of the General Managers of the Exhibit, published by the State in 1894 under the title New York at the World’s Columbian Exposition.