Housing--a National Disgrace

By Charles Stevenson
Saved Stories
[In the December Atlantic Mr. Stevenson began his survey of the conditions which afflict our housing programmes, whether national or local. He cited figures and testimony to show that the major responsibility for the high cost of our building to-day is directly traceable to a rigid system which has been maintained, despite government investigation, by the ancient, inflexible, and corrosive practices of contractors, politicians, and labor racketeers. — THE EDITORS]

I

WHAT happened in New York in 1935 is important in the light of events now occurring throughout the country in the field of public housing. Ever since 1878 the city had prohibited construction of railroad tenements, each floor a single file of as many as six rooms with windows only at the front and rear. Ever since 1901 it had been illegal to build dumbbell flats, whose tenants, by craning their necks, might look directly up a twentyseven-inch-wide shaft to sight a patch of sky far overhead. But private initiative could not provide substitutes. As a result, 524,000 occupied units in these firetraps still sprawled across the seventeen square miles that are New York’s slums, babies still were born in them, the diseased and those who relinquished hope still died amid vermin left by generations that came into life and died there before them — 189,549 apartments without private indoor toilets, 6684 with only oil lamps, 235,871 without tubs or showers.1

Small wonder, under these circumstances, that the city and federal governments felt warranted in forming a partnership to build for the poorest. Smaller wonder that on blustery March 2, 1935, the slums opened and a horde poured out to apply for 120 subsidized apartments which had been heralded as the first fruits of the enterprise. By the time the rental agent arrived the crush of eager apartment seekers stretched three blocks.2 The hope of hundreds was such that they waited thus, in the cold and sleet, from 4.30 A.M. until noon.3 Three thousand families applied for those 120 apartments before the authorities called a halt and revealed a tragedy: to be eligible as tenants a family must pay $18 a month for three rooms, must practise birth control, and must present proof of economic affluence. Indeed, the families admitted averaged but three members, had an average annual income of $1206 derived from steady jobs held a year or longer, were debt-free, possessed $100 to $1000 in savings accounts, and owned $1000 to $3000 insurance.4

The project was described by its sponsors as a triumph because rentals are so high in New York that people may pay as much as $7.00 a month for a pre-1901 tenement room.5 But subsidized housing is charity; the principle of charity is that it should first benefit those most in need; and any commonsense appraisal must hold such a project a failure in a metropolis where the neediest were 26,240 families unable to pay $3.00 a month per room, another 142,875 unable to pay more than $4.99, and another 132,493 limited to a top of $5.99.6

A great deal has been spent since 1935 on the design for living introduced in this New York project. More than $130,000,000 was expended for housing by the Public Works Administration. Its successor, the United States Housing Authority, moves $888,000,000 worth of housing into the construction stage this year without officially informing the public at the outset that it is signing contracts which may compel taxpayers to contribute $2,237,760 in subsidies for these projects.

The housing law, as amended by the last Congress to raise the USHA’s spending fund from $500,000,000 to $800,000,000, failed to take into account that the annual subsidies to be paid on this housing will not be paid on the $800,000,000, but on $888,000,000, the extra $88,000,000 coming from the localities which institute housing projects. Thus the law, owing to error, limits annual payments by USHA to 3½ per cent of $800,000,000 annually, or to an annual total of $28,000,000, which in sixty years would amount to $1,680,000,000. The new Congress, however, will be asked for a correction legalizing a 3§ per cent annual subsidy on $888,000,000, which would be $31,080,000 a year, or $1,864,800,000 for sixty years. To this must be added $372,960,000, to be contributed by the localities in annual subsidies over the sixty-year total. The sum of the last two figures is $2,237,760,000.

Nathan Straus, the USHA director, recently told the National Association of Housing officials that his projects will be within the reach of families with no more than $400, $500, or $1000 a year income.7 For the comfort of the National Association of Real Estate Boards, he says families with incomes of more than $1100 will be barred ‘except in very special circumstances.’8 But he simultaneously contracts for construction which, by the rental formulas carried in the law and stressed by him, call for an average family budget of from $1293 to $1552, and which may go even as high as $2358.

These are the maximum and budgetary ideal incomes under the formulas— five times the gross rental, including charges for heat, light, water, and cooking fuel, when a family has less than three dependents, six times the rental when there are three or more. There is no minimum income for occupancy except that which the USHA may establish for individual families as necessary in order to meet the rent. The object, however, in tenanting apartments is to come as close to the legal formulas’ ideal budget as the combination of a family’s needs and ability to pay will permit.

Mr. Straus has failed to reach the people at the bottom of the economic ladder for the same reasons that private initiative has failed. The reasons are to be found in the price fixing for building materials; the unions which squeeze higher and higher wage rates from the home builder, then restrict their output of bricklaying, lathing, or painting to make the job pay still more; the refusal of unions to work with equipment unless it is purchased from people with whom they have contracts; the necessity of paying extravagant handwork prices for processes which could be handled cheaper by machinery. Sufficient evidence was introduced in the first part of this survey in the December Atlantic to show that housing costs are extortionate because of the abuses of the building trades; the ancient, inflexible, graftridden design of the construction business; and, most important, the strangle hold that labor exerts to choke reforms that would facilitate establishment of a mechanized mass-production housing industry. There was also evidence that the government has capitulated to labor in this obstructionism.

II

The process has been evolutionary. In the beginning, in 1933, the planners believed low-cost housing would result merely if PWA cash were lent to quasipublic and private builders who would be satisfied with a government-limited dividend. Next, PWA thought the solution lay in government construction, which simply would eliminate profits. Calculations showed, however, that no rental the PWA could charge would retrieve expenditures in the thirty years deemed the limit of safety for the limited-dividend dwellings. So the length of the amortization period was doubled, but still projected rentals were in the clouds. Finally a law was obtained permitting a 45 per cent write-off of original production costs. Yet, with all this aid, the lowest monthly rental which could be charged in the New York PWA projects was $8.52 per room, including utilities; in Enid, Oklahoma, $7.04; in Charleston, South Carolina, where no outlay was needed for heat or hot water, $5.89; and so on through the list. The national average has been $7.17.9 In Sweden one can purchase a five-room house for $2200, or a total of $8.00 a month, including taxes.10

Was the PWA plan a failure? Not to the Administration, looking through the rosy spectacles of reform. Its dream for a well-housed America did not envision the economic limitations of its methods. Building costs had not been handled on a mass-production basis because labor does not want that — nor do the contractors or supplies dealers. A mechanized challenge to the bid riggers, labor racketeers, and obstructionists might have brought cheaper rentals,11 but because this challenge had not been attempted the government concluded that persons able to pay the resultant $7.17 per room rental represented a salary class entitled to federal charity.

Indeed, as far back as 1936 the Senate Education and Labor Committee, faced with this developing rental, indicated that, ‘taking the country as a whole,’ every family earning less than $1500 was entitled to a subsidy.12 And, wrhen the President reminded us that a third of the nation was still ill-housed, the $7.17 rental seemed to serve as a stimulus for more construction and bigger ideas. We must, for instance, continue to provide charity for the $7.17-a-room family, but we must provide for the poorer family, too. To this end we must reduce the rentals on as yet untenanted PWA projects, and simultaneously build new structures for which still smaller rents could be charged, partly through designing the cheapest construction possible within the existing rigid pattern of the building industry, but chiefly through doling out richer subsidies. If taxpayers object to a bottomless pit of subsidies, the new ones simply must be made to appear less extravagant than those which have gone before.

All of these prerequisites for a programme which moves into high gear in 1939 have presented an appalling problem, but, with the aid of propaganda reciting British housing activities and the improvement in crime and death rates as a neighborhood prospers, it has been solved. The solution entails two steps.

III

First, all PWA projects have been transferred to the USHA, and on the strength of an innocuous-looking clause stating that this housing thereafter may be leased to local authorities at prices ‘consistent with maintaining the low-rent character of such project,’ the USHA is turning over the newer properties for rentals which cover only upkeep. No payments are made to amortize even a fraction of production costs.13 There is not even the remotest suggestion of an equitable payment in lieu of taxes. By way of illustration let us observe the results of its application in the District of Columbia.

There the problem publicized relates to Negroes squeezed into wretched alley shacks where, official studies show, the average monthly rent of $12.85 per house may be split among several families.14 The birth rate is high, the families large — and as a remedy we have Langston Terrace, which started as a PWA project but was taken over by the USHA before completion and rented on the basis of a 100 per cent write-off of its $1,553,494 production cost. Moreover, though the normal annual tax on the property would be $27,184,15 the District government is to receive only $2925 for supplying it with the usual city services and protection.16 The cheapest rent in Langston Terrace is $19.50 for two rooms, utilities included. There are only 19 such apartments out of a total of 274; to be eligible for them a couple must have no family, cannot take in the boarders who may have helped them pay for the $12.85 hovel they formerly occupied, and can entertain visitors only for such time as the management deems ‘reasonable.’ In several cases couples with incomes as low as $600 have been permitted to move in, but they must pay higher rents than the government formula shows they can afford. The income they should have for such apartments is indicated by the eligibility of other couples with top incomes of $1170, which is five times the annual rental. If there are three in family, the household must pay $23.40 for three rooms and have a top income of $1404. Not until you come to the fourroom apartment renting for $27.30 do you find anything for which an average family of four or five is eligible, and for a family with three children the top income allowed jumps to six times the rental, $1965. A family of six or seven needs five rooms costing $31.20 a month, and its income may range to a high of $2246. Larger families need not apply.17

The government has been conducting a 100 per cent write-off on inherited PWA construction as fast as buildings are ready for tenants. It does not emphasize the write-off for obvious reasons, though it does classify the rentals thus obtained as within the price range of the ‘ lowest income groups,518 and as evidence of USHA success. But is a minimum monthly rental of $27.30 and a maximum eligible income of $1965 within reach of the average slum family with three children? Was not the construction intended for alley families able to afford only a $12.85 rental, with perhaps a boarder’s help in paying that? We must question whether the 100 per cent writeoff is justified, since for twenty-five projects it has resulted in gross rentals only 69 cents less per room than the rentals resulting from PWA’s earlier write-off of 45 per cent.19

IV

In the second phase of the new programme the USHA is overseeing construction of $888,000,000 worth of housing under a complicated subsidy device.20 Briefly, here is how it works: —

(а) A locality raises 10 per cent of the cost of a project in cash, land, ‘or other aid toward the construction of the project,’ or in bonds secured by the proposed housing, which it sells to the public.

(b) The USHA lends to the locality the remaining 90 per cent of the cost of building at 3 to 3¼ per cent interest.

The above steps will account for the $888,000,000. Now imagine that a project has been completed. Means must be provided to liquidate the local and federal investments and to subsidize rentals.

(c) At the time USIIA meets the requirements of step b, it contracts also to pay into the local housing fund, for as many as sixty years, an annual amount equal to 3½ to 3¾ per cent of the total cost of the project.

(d) Simultaneously, the locality annually contributes one fifth as much as the Federal Government.21 This local contribution need not be in cash, but may be in tax exemptions, which USHA Administrator Straus one moment berates as ‘a concealed subsidy’ and a ‘source of irritation to owners of other property which pays full taxes,’22 and in the next proudly refers to as ‘far from constituting a burden upon the city governments or an excessive burden upon other taxpayers.’23

But, transforming the percentages to cash, you find that if, under step a, the locality raises $1,000,000, the Federal Government in step b advances $9,000,000. The Federal Government thereafter pays into the project an annual subsidy of $350,000 for a sixty-year total of not more than $21,000,000, and the locality simultaneously contributes $70,000 a year for a possible sixty-year total of $4,200,000. Recapitulation: total construction cost of the project, $10,000,000; total sixty-year subsidy contributions, $25,200,000 — an amount equal to 252 per cent of the original cost of the project.

Had such a subsidy been acknowledged for the Washington project, the cost of housing the 274 Negro families would not be simply the $1,553,494 capital outlay for the buildings, but $3,914,804.

‘Oh, but that is PWA housing,’ a USHA spokesman protested to me. ‘That Washington project is construction designed for middle-class families. Politics were involved in PWA projects. The idea was to build something to impress the voters. Then, too, PWA paid terrific prices for sites. We are going to get land cheap. If the owner wants too much we will have the local authorities condemn it and tear down whatever is on the site.’

If such a statement be taken at face value, one would expect the forthcoming construction to be drastically cheaper than that which has gone before. Encouragement was lent to such expectations when the USHA even planned to eliminate doors on its closets, explaining that it had been sorely pressed but had finally succeeded in bringing its costs per dwelling unit within the $4000 limit established by Congress for cities of less than 500,000 population and $5000 for the larger centres. The fact, however, is that these cost limitations do not include land, site improvements, outside construction for gas, electricity, and water, non-dwelling buildings, architectural and engineering fees, and overhead. A breakdown of the figures for its first 46,486 units discloses that the average anticipated cost per unit is $5555.87,24 which is $572.13 less than PWA averaged for a four-room apartment25 after its own low estimates had zoomed in the encounter with mounting construction costs.

With utilities included, the USHA’s data indicate that its rentals will be an average of $5.39 a room, only $1.78 less than those rentals based on PWA’s 45 per cent subsidy and $1.09 less than those collected under the 100 per cent write-off.26

By USHA’s own formula, the cheapest of these homes for a family with two or three children, in San Antonio, Texas, will require a rental of $8.00 a month for four rooms, even before the government adds its average utilities charge of $1.64 per room,27 which under the law must be included in the gross rental. If USHA achieves this rental, it will be cheaper than anything heretofore dreamed of. But at this writing USHA offers it only in one city, and defines the beneficiaries there who most need its aid as Mexicans who now are able to pay only fifty cents a week for corrals and have no utilities because they cannot afford them.28 On the topside, the same four-room apartment in New York will cost about $26.20 and, by the USHA formula, call for incomes up to $1572 or $1886, depending upon whether there are two or three children. Larger five-room suites also will be available for three-children families earning $2358 a year.6 Indications are that the New York gross rentals will be approached in many other cities, for instance in Pittsburgh and Yonkers, where the projected cost per dwelling unit is $6242 and $6067. But these are the extremes. The average $5.39 gross rental per room for the nation means that the average benefiting family must pay $21.56 for a four-room apartment and should have an income up to $1293 for two children and $1552 for three.

Is a rental of $5.39 a room reaching the people in the woeful photographic exhibits displayed by the government to win taxpayer support? USHA Director Straus says his rentals succeed in their purpose; but in New York recently he declared: ‘I have had also to learn that a rental of $5.00 per room per month — or even $4.00 per room per month — can be very high in a city, where a large proportion of the families earn less than $800 per year. There are many such cities in our country to-day.’29

There you have part of the USHA problem; to get the whole of it one must resort to multiplication and remember that, on the basis of hoped-for costs, completion of the new programme calling for construction expenditures of $800,000,000 federal and $88,000,000 local funds must look thereafter to subsidy payments of $2,237,760,000 to keep the houses tenanted. The beneficiaries will be 159,830 families ranging from Mexicans who cannot afford the aid to people with $2358 incomes.

But that is only the beginning. As ex-Chairman Langdon Post of the New York Housing Authority told a Senate committee: ‘One billion dollars spent in this kind of housing will get it where it will catch afire, and, in my opinion, there will be no stopping it; nor should there be any stopping it until we have attained at least a great part of the ultimate goal.’30

And Senator Robert F. Wagner, sponsor of the legislation, cut in: ‘May I interrupt you long enough to suggest that in England it was the Labor Party when they came into power that started a building programme, but when the Conservatives had come into power they not only continued it, but enlarged the programme because it had taken hold and the people insisted on its continuance.’

President Roosevelt increased USIIA’s funds from $500,000,000 to $800,000,000 even before a shovel of dirt had been turned, and declared that the anti-slums drive ‘must go forward until every American family has a decent home.’31

Senator Wagner again, referring to the ‘wonderful achievements’ of the USHA, announces that ‘this rehousing campaign has only begun’ and, because the money being expended ‘will barely scratch the surface,’ the federal programme ‘must and will be expanded.’32 And the Associated Press states that Mr. Straus will report to Congress ‘a pressing need for additional appropriations.’33

This is laudable sentiment. If government will ever deal realistically with the construction industry, it may point to national well-being. Under present building methods, however, it points only to national peril, for it apparently indicates a determination and publicity build-up for more funds from Congress this year for rehousing which shall go on and on without any taking of bearings.

To be eligible for USHA benefits requires only that one’s home shall be of ‘faulty arrangement or design,’ or be regarded as crowded, or inadequately ventilated or lighted, or lacking a private bath for each family.34 One can find such conditions in almost every boardinghouse, sometimes in expensive neighborhoods. Indeed, Mr. Straus declares that ‘humanitarianism and good business both will be served’ by the programme,35 and if the possible $2,237,760,000 subsidies for 159,830 families are ‘good business,’ it must be good business to subsidize everyone who is eligible. Yet, even if a programme of this type were limited to people with incomes under $1500, instead of the $2358 incomes which can qualify now, about 65 per cent of the nation’s families36 would be eligible for aid in that they belong to an income class which the Senate Education and Labor Committee found could not afford decent housing. The cost of providing them with that to which they are entitled by the ‘good business’ precedent comes to the astronomical approximation of $142,629,486,000 with subsidies of $359,434,304,000, according to current USHA trends, even without supergratuities.

The idea of compelling 35 per cent, or approximately 13,800,000, of America’s families thus to support the remaining 25,628,000, or 65 per cent, is absurd; yet, by the administration’s own statements, this apparently is the illogical conclusion to which we are heading; and, as Senator Wagner indicates, there is every reason to believe that if a fraction of the eligible families are given model homes in the next couple of years, the remainder will bring pressure through their voting strength to obtain their share.

V

There is a tremendous need for housing. Government estimates based on conservative research are that 16,297,000 additional homes are needed between now and 1950 merely to meet the none too excellent standards of 1930.37 Housing is a primary necessity of man, second only to his food. Proof that government interest in housing is warranted lies in the fact that the authorities apparently have no difficulty in finding families with $1000 to $2358 a year who are able to afford only such inadequate dwellings that they automatically become eligible for subsidies. A survey of 116 of the $1206-a-year families given subsidized accommodations in those original New York public apartments back in 1933 disclosed that 11 previously doubled up with another family, 81 had no heat, 91 no bathrooms, and 81 no toilets.38 Back in 1934, public investigation disclosed that the family earning $2000 a year in the District of Columbia found it almost impossible to rent more than a single room and bath, at the cost of $42.50 a month.39 It has been found that 41 per cent of the families paying $28 a month in Cincinnati have no conveniences except a cold-water sink.40

This sort of thing is proof of a problem which cannot be met by the Home Owners Loan Corporation, preserving the high realty values which put decent housing beyond the reach of those with fair incomes, or by the Federal Housing Administration’s 90 per cent building loans, which, while tending to lower the interest rate structure, do nothing to decrease basic construction costs and simply permit smaller down payments on homes as expensive as those which have gone before. But have we not here a problem which cannot be met by subsidies alone?

True, no authority contends that it is possible to build for the extremely poor without subsidies. In Sheffield, England, for instance, it costs the government only 16 cents a day to provide a cottage and garden for a family of four that can pay a monthly rental of $9.44, which includes taxes of $3.51.41 But the USHA’s figures for its New York projects indicate that we shall be paying a subsidy of more than 73 cents a day to keep a family of four in a four-room apartment, despite the fact that the apartment costs the tenants about $26.20 a month and they may have an income of $1572 and pay relatively no realty tax, owing to the tax-exempt character of their home.42

Study for a moment the difference between the American and British subsidies, consider the differences in the wage classes they reach, then remember that more than half of all the urban renters in our country cannot afford to pay $20 a month,43 let alone $26.20. The distance we still must go to reach not only the poorest but the major portion of our citizens might as well be the distance to the moon, judging from those facts, and the futility of our present methods is appalling. Moreover, remember that tax exemption has become one of the chief principles of American subsidization policies, and that real estate costs for unsubsidized construction must rise in direct proportion to the expansion of subsidized tax-free projects which throw a heavier tax burden on the remainder of the country.

Indeed, when you reach a stage where the overwhelming majority of a nation’s people, despite automobile-purchasing salaries, cannot afford good homes, is it not time to scrutinize the industrial pattern which isolates such homes as luxury items? Is it not time for government action to force down construction costs, to form a housing industry which, like the automobile industry, can give more value for the dollar?

The British have such an industry. Paul E. Stark, as president of the National Association of Real Estate Boards, said that some of their operators build as many as 4000 houses a year and have reduced costs as much as 30 per cent by their mass-production methods.44 Sir Harold Bellman, managing director of one of England’s biggest building societies, with $250,000,000 assets, stresses the fact that their skilled building tradesmen work the year round, owing to quantity production arising from low costs. Whereas American building workers must go jobless when inclement weather prevents outside work, he points out, the Englishmen take up inside jobs. One London company builds as many as twenty-one large communities simultaneously.45 Several build from five to fifteen.46 As a result, England and Wales from 1930 through 1937 constructed 2,185,366 dwelling units.47 In the same period the United States, with a population more than three times larger, was able to build no more than 1,436,000 non-farm dwellings.48

‘I wonder when the American genius for mass production is going to start in the housing field?’ Sir Harold asks. ‘There is no reason why you should not achieve in this country a success even greater than our own.’ 49

British housing has been held responsible for at least half of the country’s recovery. An American housing industry might do even more. The reason is that a nation’s wealth comes from the wages and dividends which accrue from the production of things. Technological improvements which make for greater wealth, in that they facilitate mass production, also cause technological displacement of workers, which can be offset only by increased production. In past generations new industries have supplied this increase to take up the slack. Once it was the railroad; later it was the automobile. Because inexpensive housing is something which everybody needs and wants, because it would reach deep into the economic structure to benefit a large number of interests, its industrial possibilities seem boundless.

PWA studies indicate that out of every construction dollar 42 cents went to labor at the site, 7 cents to labor producing the raw materials, 21 cents to labor fabricating these materials, 4 cents to labor transporting the materials, and 16 cents to the owners of the mines, factories, railroads, and supply houses to meet their non-labor costs and profits. In New York a single project for 1471 families employed 3300 tradesmen and as many more men fabricating materials. Into it went 4000 tons of steel, enough concrete to lay a four-foot sidewalk from New York to Baltimore, enough bricks to reach from Chicago to New Orleans, 100 miles of pipe, 220 miles of electrical wiring, and seven acres of glass.

Administration experts recognize the potentialities of an industry which thus would spread its benefits back to the lumber industry, the copper and iron mines, the rock quarries and the kilns, and the railroads. Indeed, they had the potentialities thrust before them when the Committee for Economic Recovery, headed by the late Allie S. Freed, Paramount Motors chairman turned low-costhousing enthusiast, approached President Roosevelt with a plan for such an industry modeled along the British lines.

On the committee were some of the country’s leading industrialists and business men. Represented were such firms as Westinghouse, Pittsburgh Plate Glass, Commercial Credit, the F. W. Dodge Corporation (building construction service), American Rolling Mills, LibbyOwens-Ford Glass, Ohio Life Insurance, Briggs Manufacturing, Glidden Paints, and Eastman Kodak. Harvard University was represented by the dean of its school of business administration.

As in England, they called for huge housing concerns, carrying private investments, which would construct $2500 to $6000 homes for rent and for sale on a 5 to 10 per cent down payment and assumption of mortgages bearing interest and service rates totaling no more than 4½ per cent.

To achieve such prices they would cut through the inefficiency and graft and the building rackets. They would standardize materials and methods. They would junk political building codes for uniform laws designed to meet the needs of the public, rather than the desire of the party boss, the crook, and the labor monopolist. They would prefabricate and mechanize.50 Gone would be the necessity of manufacturing countless sizes of bricks, more than 19,000 types of valves and pipe fittings, and more than a thousand types of lock hardware. Gone would be the estimated 53-cent waste in every housing dollar,51 owing to these reforms, huge blanket orders of materials, and the concentration in a single organization of the multitude of services now performed by promoter, architect, banker, contractor, wholesaler, retailer, broker. Labor would not enjoy its present high hourly wage scales, but it would have higher annual incomes and more jobs, owing to mass production and a guaranteed number of working days. By such means it was believed that private enterprise would provide homes for everyone with incomes of $1000 and more, while use of these same methods would enable the government to spread subsidized dwellings on a more economical basis than at present among families with less than $1000 incomes.

The programme did not have the coverage of the British. In England, private enterprise supplies cottages to persons with as little as $850 a year. But the American plan was a jump in the direction in which the British were moving so successfully. Huge corporations controlling the manufacture of building supplies were ready to sponsor the programme. All that was needed was labor and government support.

‘There is no reason why labor leaders cannot learn from experience just as we all have to do,’ Chairman Freed declared. ‘Millions of men who ought to be employed in building homes and making materials, and so forth, now live on charity. This should be sufficient evidence that inordinate hourly wage rates and arbitrary jurisdictional control of labor operations do not result in millions of homes and good annual incomes to the workers who could do so much to make these homes possible.’52

PWA Administrator Ickes praised the committee. The chief of PWA’s housing activities wrote Mr. Freed that economical, mass-produced housing depended upon realization of the committee’s ideas. But labor, he stressed, did not want mechanization and reform. Labor was opposing progress, he said.53

That letter was a bitter indictment of building labor. Had it been made public, it would have created a sensation. But it was not made public, and the official who wrote it shut up in his mind everything he had written. For public consumption he stood before a Congressional committee and remarked that even any suggestion to alter the wage setup of union labor was to be deplored as ‘reactionary.’54 And Mr. Ickes issued this statement: ‘Attempts are being made to mechanize the industry and, through mass production, to lower costs. However, an infinite number of difficulties, which need not be enumerated here, tend to delay mechanization, and for some time to come there is little likelihood of achieving such a goal.’55

The hope for a real housing industry, for ending rackets and other abuses, had failed.

The government has no scruples about battling the electric utilities industry on the plea that this is the means to cheaper power. It can interfere with banking to deflate interest rates. It can impose restrictions on business generally. It can see signs of monopoly among the doctors, automobile manufacturers, and milkmen. But it cannot seek to evolve a housing industry and bring building prices within reach of the masses because of ‘an infinite number of difficulties,’ which in the final analysis are the leaders of 700,000 unionized building tradesmen who constitute but a small portion of all builders in the country, who are 25 to 45 percent continuously unemployed,56 and who are to-day loading the relief rolls of the nation.

The government prefers to tolerate abuses and dictation as to how it shall build rather than risk antagonizing this small faction; it prefers to subsidize inefficiency and mislead the taxpayers concerning its activity in order to hold their support for a programme which gives a relief status to an alarmingly large percentage of the population of the country, and which inevitably must lead to bankruptcy if carried to its already planned conclusion.

  1. Slums and Blighted Areas in the United States, by Edith Elmer Wood, published in 1936 by PWA as Housing Division Bulletin No. 1, pp. 25-34; tables relating to 1934 Real Property Inventory of New York prepared under direction of New York Housing Authority, Department of Commerce, and mayor’s advisory committee, ibid., pp. 34-35.↩
  2. Testimony of Langdon W. Post, former chairman of the New York Housing Authority, before Senate Committee on Education and Labor, April 20-21, 1936, transcript pp. 51-61.↩
  3. Testimony of John Volpe, New York East Side Public Housing Conference, before Senate Committee on Education and Labor, June 4, 1935, transcript p. 20.↩
  4. Pp. 29-31 of First Houses, document published by New York Housing Authority, 1935, and reprinted on pp. 57-59 of Senate Education and Labor Committee transcript for April 21, 1936.↩
  5. Testimony of Mr. Post before Senate Education and Labor Committee, June 5,1935, transcript pp. 29-36.↩
  6. See footnote 1 on p. 100.↩
  7. New York Times account of Washington speech, Oct. 12, 1938.↩
  8. New York Times account of Milwaukee speech, Nov. 10, 1938.↩
  9. USHA photostat table, March 1, 1938.↩
  10. Herbert Nelson, National Association of Real Estate Boards, testifying before Senate Banking and Currency Committee, Dec. 3, 1937, p. 78 of transcript.↩
  11. See part I of this survey, December Atlantic.↩
  12. Committee report favoring passage of a bill similar to the current USHA Act, Report No. 2160, 74th Congress, 2d Session↩
  13. Tyrell Krum, Special Assistant to USHA Administrator Straus in charge of press relations, in reply to direct question concerning extent of write-offs.↩
  14. Rent and Housing Conditions in the District of Columbia, a study by the Public Utilities Commission made for Congress in response to Senate resolution; p. 32, Document No. 125, 73d Congress, 2d Session, part 2.↩
  15. District of Columbia tax collector.↩
  16. Washington Star, Washington Post, Washington Daily News accounts, March 1-15, 1938.↩
  17. USHA release No. HA-52, March 9, 1938, and interview with director of Langston project.↩
  18. USHA release No. HA-49, March 4, 1938.↩
  19. Under 45 per cent write-off plan, rent per room with utilities averaged $7.17. USHA subsequent rentals on same basis, including utilities, is $6.48, with benefit of 100 per cent write-offs. Computations based on official USHA photostat report of March 1, 1938.↩
  20. USHA release No. 11085.↩
  21. Bulletin No. 6 on USHA Policy and Procedure, release No. 16259H; Bulletin No. 4, 14845H, Bulletin No. 5, 15900H, Purposes, Powers and Functions of the USHA; the USHA Act.↩
  22. Speech by Straus before U. S. Conference of Mayors, Nov. 17, 1937, in Washington. See p. 6 of transcript as contained in USHA release No. 1 (9095 H).↩
  23. P. 10 of USHA release 117 (30356H), dated July 18, 1938.↩
  24. Total cost $258,270,349, divided by 46,486, total number of units.↩
  25. USHA lists average cost of PWA units as $6128.↩
  26. USHA releases of new projects, and March 1, 1938 photostat report.↩
  27. USHA printed computation of average utilities charge on projects already tenanted.↩
  28. USHA release No. 117 of July 18, 1938.↩
  29. USHA release No. 73, which lists base rent as $5.15 per room. To this must be added the utilities charge, which in New York projects of PWA ran to $1.40 a month per room. Since then, USHA has raised the New York utilities charge at Williamsburg to $1.92 a month and the Harlem project to $2.15 a month per room, but I have used the smallest though somewhat antedated figure of PWA, to give USHA every possible advantage.↩
  30. Straus’s New York speech of July 18, as carried in USHA release.↩
  31. Testimony before Senate Labor and Education Committee, pp. 52—53 of transcript of bearing of April 20, 1936.↩
  32. Statement by President Roosevelt on signing of first USHA contracts, quoted by Straus in release of August 3, 1938.↩
  33. Radio speech reported by Washington Star, Oct. 18, 1938.↩
  34. Boston Transcript, Oct. 19, 1938.↩
  35. Release by USHA, March 9, 1938, No, HA-52.↩
  36. Testimony by Straus before Senate Labor and Education Committee April 15, 1937. See transcript of testimony, p. 196.↩
  37. The population and income figures based on U. S. Public Health Survey as readjusted by the U. S. National Resources Committee.↩
  38. Estimate by Catherine Bauer, Labor Housing Conference, and Coleman Woodbury, National Association of Housing Officials, with calculations based on U. S. Real Property Inventory of Commerce Department. Quoted by Straus in Purposes, Powers and Functions of the USHA.↩
  39. See footnote 1 on p. 101.↩
  40. Rent and Housing Conditions in the District of Columbia, title of a report by the vice chairman of the District Public Utilities Commission, Document No. 123, 73d Congress, 2d Session, p. 21.↩
  41. Urban Housing, Bulletin No. 2 of the PWA Housing Division, 1936, p. 7.↩
  42. PWA research by William V. Reed.↩
  43. USHA release No. 73 lists the total cost of two New York projects for 5194 families (the Queens-bridge and Red Hook projects) as $33,333,000, and states that the USHA will pay 3½ per cent of the cost of the project annually as a subsidy. To this the city must contribute a fifth as much. The total annual subsidy, therefore, is at least $1,399,986. Divide that by 5194, the number of tenant families, and you arrive at an annual subsidy of $269.53 per family. Divide again by 365 to arrive at daily subsidy per family.↩
  44. Urban Housing, p. 7.↩
  45. Testimony of Paul E. Stark before Senate Banking and Currency Committee, Dec. 3, 1937, p. 59 of committee transcript.↩
  46. New York speech before Citizens Housing Council of New York, etc., and Herald Tribune, May 27, 1938.↩
  47. P. 6 of Methods for Men — Money — Management and Government, an installment of the home building programme presented to President Roosevelt by the Committee for Economic Recovery.↩
  48. British Government figures from USHA.↩
  49. USHA research.↩
  50. See footnote 4 on p. 108.↩
  51. Industrial Relations in the Building Industry, by William Haber, Harvard University Press.↩
  52. See footnote 4 on p. 108.↩
  53. Former Assistant PWA Administrator Horatio Hackett’s letter to Mr. Freed regarding the latter’s programme.↩
  54. Hackett testimony before Senate Education and Labor Committee, April 26, 1936, p. 229 of committee transcript.↩
  55. The Background of Housing, PWA release No. P.W. 57157, p. 2.↩
  56. Unemployment figure given in direct statement of A. F. of L. Building Trades Department to writer, and bolstered by Dr. Isador Lubin, Bureau of Labor Statistics director, in testimony before Senate Committee on Banking and Currency, December, 1937. See pp. 140—158 of committee transcript.↩