1939: Housing Developments

The year 1939 may well be considered one of the most significant in the contemporary social history of the United States. For in that year the slums of the nation began to decrease as the principles of public housing were transformed into the reality of projects.

Results of the USHA.

As a result of the completion of the first 12 decentralized public housing projects, more than 30,000 slum dwellers were offered decent housing at low rents by the end of the year 1939. Of the 5,916 dwelling units in these projects already available for occupancy at that time, 5,463 were tenanted. The projects were constructed with the aid of the United States Housing Authority by housing authorities in Florida, Michigan, New York, Ohio, South Carolina, and Texas at a total development cost of $40,711,000. Moreover, local housing authorities throughout the country placed under construction 150 USHA-aided projects providing 54,941 additional dwelling units.

Simultaneously with the construction and completion of public housing projects during the year there began the elimination of the slums which have been the shame of our cities since the turn of the century and longer. As of Dec. 31, 1939, approximately 12,000 substandard structures had been eliminated in 35 of the 155 communities participating in the slum clearance and low-rent housing program. These 12,000 structures were closed to human habitation or made habitable as a result of local programs involving 48 low-rent housing projects. A large additional number of substandard dwellings were being eliminated late in 1939 in connection with the construction on more than 125 low-rent housing projects then under way. Under the terms of the United States Housing Act making Federal loans available, substandard dwellings equivalent to the number of dwellings made possible by USHA aid must be demolished or adequately repaired.

In its efforts to aid the low-rent housing and slum clearance program, the USHA by the end of 1939 had committed $666,808,000 of its funds for the construction of housing projects by 167 local housing authorities — $581,776,000 for loan contracts and the remaining $85,032,000 for earmarkings. Upon completion of the program made possible through these funds 640,000 persons will have been moved from insanitary dwellings to healthful homes; 160,000 low-rent dwelling units will have been built and an equal number of slum dwellings eliminated; a year's work will have been given 300,000 men; $225,000,000 will have been paid in wages to labor on project sites and additional millions of dollars to off-site workers, and $280,000,000 will have been spent in private industry for materials and equipment.

National Legislation.

Efforts to expand the program were initiated in the summer of 1939 when the Senate unanimously passed legislation authorizing an additional $800,000,000 in loans and $45,000,000 in annual grants to local housing authorities. It is estimated that the funds authorized through this legislation would provide 303,000,000 man-hours of labor on project sites, 452,000,000 man-hours in industries supplying materials, and 40,000,000 man-hours of labor for persons engaged in administration, land acquisition, demolition, architecture and engineering. Approval of the legislation awaited further Congressional action early in 1940. (For Steagall National Housing Act, see UNITED STATES: Housing)

Urban and Rural Housing Developments.

In their determination to clear their slums and provide decent homes, 68 communities entered the public housing movement in 1939 through the creation of local housing authorities designed to realize that objective. These new agencies brought the total number of local housing authorities up to 289 — an impressive figure when compared to the 46 housing authorities which existed when the decentralized housing program was launched in November 1937. It is estimated that 100 additional authorities may be created in 1940.

Participation of smaller cities and towns in the public housing program increased rapidly during the year. The number of communities with populations of less than 25,000 rose from 24 in 1938 to 48 in 1939. These 48 communities represented more than 27 per cent of all the cities with USHA commitments. Among the smaller localities were 30 with populations of 10,000 or less; eight of the communities in this group had USHA earmarkings or loan contracts.

Late in the year, efforts to rehouse rural families living in unfit structures were launched by the county housing authorities of more than a dozen states. Impetus was given these efforts through the initiation of projects by four county housing authorities in Indiana, Illinois, Mississippi, and Georgia. Established along lines similar to those of the urban public housing program, the rural program is designed principally for small farm owners, tenant farmers, share-croppers and rural wage workers. Extension of the program is dependent upon adequate funds. Legislation authorizing that $200,000,000 be set aside for loans for rural projects by USHA was overwhelmingly passed by the Senate in 1939, but held over for consideration of the House of Representatives in 1940. The pending legislation makes it possible to provide decent new homes for 100,000 ill-housed farm families at charges within their means and permits the long-term leasing or sale of these homes to the farmers.

State Legislation.

The passage during the year of 25 original or amendatory housing acts by state legislatures indicated a continued determination of the states to improve housing conditions. Through the passage of housing enabling legislation, five states (Arizona, Idaho, Missouri, New Mexico, and Washington) entered the public housing movement and became eligible to participate in the nation's public housing program. With this action the number of states with housing enabling legislation increased to 38. It is expected that most of the remaining 10 states will consider enabling bills at their 1940 and 1941 legislative sessions. Perfecting amendments designed to facilitate housing action were enacted in the states of Alabama, California, Colorado, Connecticut, Florida, Georgia, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Vermont, and in Puerto Rico and the Territory of Hawaii.

The constitutional validity of public housing action was upheld by the courts of last resort through decisions rendered in California, Florida, Georgia, Illinois, Indiana, Massachusetts, Michigan, Missouri, Montana, Ohio, Tennessee, and West Virginia.

Successful Reduction of Costs.

Since in the final analysis the success of the public housing program depends upon whether it can provide decent homes for low income families at rents they can afford to pay, it is significant to note that the rents in the projects opened in 1939 were below the average rent of slum dwellings in the communities in which these projects were located.

Whereas in 1938 estimates indicated that the rents would be low, in 1939 facts proved that they were even lower than had been anticipated. The average monthly shelter rent actually fixed in 1939 in connection with 17 projects were, on the average, 21 per cent lower than the rents for these projects estimated in 1938. Whereas, for example, the 1938 estimate for the Sunset Homes Project in Augusta, Ga., was $13.25 a dwelling per month, the average actual rent in 1939 was $8.99 per month. In the case of the Red Hook project in New York City, the comparable figures were $20.50 in 1938 and $16.64 in 1939.

Costs of every phase of public housing were continually clipped during the year. The over-all cost — i.e., the cost of land, dwelling, and non-dwelling facilities was reduced considerably, reaching as low as $2,754 per dwelling unit in Miami. The average over-all cost was $519 less than the average over-all cost of dwelling units in private large scale rental projects. These low figures are especially significant in view of the fact that the public housing projects are designed to last at least 60 years and are built by workers paid prevailing wages.

In keeping down dwelling facilities costs the local housing authorities did more than merely comply with the limitations stipulated by the United States Housing Act. In cities under 500,000 population, the average dwelling facilities cost per dwelling unit was $667 less than the $4,000 statutory maximum, and the average dwelling facilities cost per room was $199 less than the $1,000 statutory maximum. In the larger cities, the average dwelling facilities cost per dwelling unit was $1,359 less than the $5,000 statutory maximum, and the average dwelling facilities cost per room was $373 less than the $1,250 statutory maximum.

The estimated net land cost (including the cost of slum buildings to be torn down) for the 346 USHA projects covered by loan contracts as of Dec. 31, 1939, averaged 29 cents per square foot. In a number of cases the costs were as low as 10 and 15 cents. In connection with the 163 projects for which main construction awards had been approved, the land costs (excluding the cost of slum buildings to be torn down but including the cost of acquisition and overhead) were estimated to average $362 per dwelling unit. Considering that 52 per cent of the projects are to be located on costly slum sites rather than on vacant land, these figures are believed to be reasonably low.

The average net construction cost per dwelling under construction by December 1939 was $2,821; the average amount shown by building permits for private homes built recently in the same localities was $3,448 per dwelling unit. In a number of cases the average net construction cost per unit of USHA projects was as low as $2,000 and in several cases even lower. The average net construction cost per dwelling unit was $627 less than the building permit figures for private residential construction of all types.

New Method of Financing.

A new plan set in operation in September made it possible for the local housing authorities to obtain funds through the construction period at a small fraction of the rate which USHA is required to charge. Under this new plan, requisitions for advances, after being approved by USHA, were forwarded to the Federal Reserve Bank of the district in which the authority is located with the authorization to pay to the authority the amount of the loan advance on a specific date. These commitments permitted the housing authorities to issue short-term notes to bidders offering the lowest rate of interest. The first offering of the notes was made on Nov. 8 by eleven housing authorities. Despite the European war situation, the $50,000,000 worth of notes offered by these authorities were sold in a few days at an interest rate of six-tenths of one per cent plus a slight premium which reduced the actual interest cost to the local authorities to approximately less than six-tenths of one per cent. The use of this plan of short-term borrowing from private sources during the construction period is believed to make possible a savings in total project development costs of at least 2 per cent. Moreover, this reduction of debt service has meant a reduction in the amount of annual contributions necessary to achieve low rents.

FHA Program.

As a direct result of the efforts of the Federal Housing Administration to encourage the flow of private capital into the construction of homes for families with enough income to have credit standing, 153,496 dwelling units were constructed during 1939. In addition, 512,849 old properties were improved under the modernization program of the FHA.

The 153,496 new dwellings constructed under the FHA program during the year compared with 118,601 in 1938, an increase of 30 per cent. Total home-financing insurance written by the agency amounted to $954,000,000 as compared with $693,500,000 during 1938, an increase of 37.5 per cent. Small home premium-paying mortgages, including those insured on properties already constructed, numbered 153,700 valued at $669,400,000, as compared with 109,279 valued at $473,246,124 in 1938, an increase of 42 per cent. Notes insured under the FHA modernization program numbered 512,849 and totaled $233,100,000, as compared with 382,325 totaling $172,750,000 in 1938, an increase of 35 per cent. It should be noted, however, that the program was in effect in 1938 only 10 months instead of the entire year. On the other hand, this type of financing during the last half of 1939 for the first time has been on a premium-paying basis, lending institutions being required to pay a fee for FHA insurance. Loans closed on large-scale rental projects amounted to $51,436,625 in 1939, as compared with $47,493,150 in 1938, an increase of 8 per cent.

Increase in Construction.

During the first eleven months of 1939, according to building permit data of almost all cities with populations of 1,000 or more, 286,154 dwelling units were constructed as compared to 215,953 units during the same months of 1938 — an increase of 32.5 per cent. The value of the 1939 units, $1,042,314,511, was 32.6 per cent higher than $786,035,755 valuation for 1938. Approximately 59 per cent of the 1939 units were in one-family dwellings, 4.4 per cent in two-family dwellings, and 36.6 per cent in apartment houses. These figures cover almost all urban residential construction, including not only regular private construction but also private construction encouraged by the Federal Housing Administration and local government construction aided by the United States Housing Authority.

During the fiscal year 1938-39, private contractors built 2,784 low-cost farm homes for the Farm Security Administration. In all, more than 20,000 rural families at the end of 1939 were enjoying better homes as result of this agency's construction and repair activities in recent years.

Experiments in Rural and Suburban Housing.

The first important Federal efforts in the low-income rural housing field started in 1934 when the Federal Government began to set up homestead projects or resettlement communities to provide a new start for farmers, miners and lumbermen in stranded areas. Since then, more than 150 rural communities have been developed. In the construction of these communities a great many experiments were tried out. The Farm Security Administration, and its predecessor agencies, built houses of conventional frame construction; houses of steel, houses of mud, known as rammed earth buildings; adobe houses; and even, more recently, a cotton house.

Most of these more unusual types of houses were built in small numbers, purely as experiments. They are all now being lived in. But no final appraisal of their value will be possible until their performance under actual living conditions has been studied over a period of years. Considerable experience in house construction was obtained in the building of three suburban projects, known as the 'greenbelt' towns. These three towns are located near Washington, D. C., Milwaukee, Wis., and Cincinnati, O. Housing for 2,129 families is provided in these communities, which combine many of the advantages of rural and urban life. In each of these towns multiple dwellings, duplexes, and single houses were built on large tracts of land, surrounded by encircling belts of parks and gardens. They were constructed for low-income city workers and built by relief labor.

In the summer of 1939 the newly created Division of Industrial Economics of the United States Department of Commerce was assigned to draw up a plan to induce private capital to enter the 'no-man's land' of residential construction and to build homes for families with annual incomes averaging between $1,200 and $2,000. Such a plan was considered necessary because practically all private construction is designed for families earning over $1,750 annually and the public housing program is intended for families with annual incomes averaging below $1,200 — thus leaving untouched the housing needs of the $1,200 to $1,750 income group.

Housing Census.

As a result of legislation introduced by Senator Robert F. Wagner and enacted in the waning hours of the second session of the 76th Congress, census enumerators of the Department of Commerce will in 1940 count houses as well as noses in their regular decennial population checkup. For the first time in history every house in the United States will be counted and classified according to type, facilities, age, state of repair, number of occupants, value, rental and mortgages status. The resultant data are expected to provide the first nation-wide information this country has had to guide both public and private housing activity.

Effect of the European War.

With the outbreak of war in September, the direct and indirect influences upon housing construction activity in the United States became a matter of deepest concern to private enterprise as well as to Government. The general consensus of opinion was perhaps most aptly expressed by Harold S. Buttenheim, editor of The American City and president of the Citizens' Housing Council of New York City, when he stated: 'Whatever may be the present dangers to the United States from abroad, the major peril at home is the fertile soil of our city slums for the propagation of ideas hostile to our free institutions. And our most burdensome public costs are those resulting from idle man-power, idle machinery, and idle money. The result we can least afford is that of failing to build and maintain the virile citizenship and the good life that our abundant resources make possible. . . . The movement for better housing and neighborhood conditions must go forward.' See also ARCHITECTURE: Apartments and Housing.