1941: Housing Developments

Defense Housing.

The effects of the nation's military and industrial mobilization for defense dominated the 1941 housing scene. Defense housing presented two basic sets of problems: first, means of stepping up the production of dwellings in critical defense areas because of the war emergency, and second, the inter-relating of these accelerated activities with the normal physical and economic patterns in such a way as to cause the minimum current or future dislocation of the housing production facilities.

During 1941, the Government expanded its operations for the direct construction and management of housing for defense purposes. This move was necessary because private enterprise could not produce a supply of new housing at acceptable standards that could be afforded by more than 25 per cent of the families employed in critical defense activity, and because in many locations, regardless of the income of prospective tenants, the probable duration of the need for the defense housing was so limited as to hold no inducement for the profitable investment of funds.

Administrative Activities.

The organizational pattern of Government agencies concerned both with direct housing operations and the extension of aid to private enterprise remain substantially the same as in 1940. However, most of the Federal agencies were granted additional powers or otherwise exercised additional functions directly related to defense. Thus, FHA was authorized by the newly enacted Title VI of the National Housing Act to insure mortgages for low-cost homes in defense areas on much more liberal terms than were available in other parts of its program and a special mortgage insurance fund was set up for this title. To FSA was allocated the responsibility for handling much of the so-called temporary housing in the defense program. This included the provision of trailers, dormitories, and some demountable dwellings of the more conventional type. USHA continued to expend some of its own funds for defense purposes and handled a large amount of the special defense housing funds directly or by the using of local public housing agencies as agents.

The two new agencies first to play exclusive defense housing roles in 1940, the Division of Defense Housing Coordination and the Division of Defense Housing of the Federal Works Agency, continued to hold the center of the stage. Organizational changes included the transfer of the Division of Defense Housing Coordination from the jurisdiction of the Advisory Commission to the Council of National Defense to the Office for Emergency Management, the establishment of the Mutual Ownership Division in the Federal Works Agency, and the assumption of all management responsibility for the Lanham Act (Public No. 849, 76th Congress) financed defense housing by FWA.

By Dec. 13, 60,357 publicly financed homes of the ordinary type for families of defense workers had been completed or occupied and new homes were being completed at the rate of better than 2,500 per week. In addition, trailer or portable house accommodations for 2,237 families and accommodations for 6,585 single persons had been provided. Federal funds had been allotted for a total of 126,889 such homes.

Administrative Difficulties.

As industrial plants and military posts were established and expanded more rapidly, the task of the Division of Defense Housing Coordination, namely, the determination of need for defense housing, became more difficult. Two major obstacles were still apparent. First was the difficulty of assigning to one agency the responsibility for determining the need for defense housing in terms of location, amount, and rent level or sales price, and the responsibility of suggesting the proper Federal agency to provide the housing and still not granting to this fact-finding agency the power to follow through and supervise the prosecution of its recommendations. The second difficulty was the absence of an overall policy or central administration for the various Federal agencies that were expected to function in the defense housing program.

The introduction of new non-housing agencies like the Army, the Navy, the Maritime Commission, and the Public Buildings Administration, into the business of building and operating housing served to complicate an already unsatisfactory administrative pattern. Charges and countercharges among administrative officials of defense housing agencies led to two moves toward an analysis of the Federal Government's housing activities. The Buildings and Grounds Committee of the House of Representatives made a special nationwide investigation of defense housing for the purpose of determining the advisability of an appropriation of $300,000,000 for defense housing in addition to the $150,000,000 that had been appropriated in 1940 and the $150,000,000 that had been appropriated in early 1941 under the Lanham Act. As a result of the recommendations of the Committee, the House of Representatives passed in early December a bill amending the Lanham Act in such a way as to entrust virtually all further construction of defense housing to the Public Buildings Administration and to otherwise distinguish the defense housing program from the large scale nondefense Federally-aided housing program. The Senate amended the House bill to eliminate most of the proposed changes and at the close of the year some compromise was yet to be reached between House and Senate versions.

In the meantime, Congress passed an additional appropriation of $300,000,000 for temporary housing for defense purposes.

Judge Samuel Rosenman was requested by President Roosevelt to make a study of Federal housing agencies and recommendations for their most effective organization or reorganization.

During 1941 the Division of Defense Housing Coordination inaugurated two new activities; namely, the establishment of homes registration offices to discover and list all available housing accommodations in defense areas, and the stimulation through these offices of a program of repair and alteration of existing residential buildings to make available additional rooms or dwelling units.

The Division sets certain standards and procedures for the operation of homes registration offices but the personnel and funds for the operation of the offices must be supplied locally. By December 1941, about 200 of these offices had been established.

Repair and alteration work is carried out by the owners of buildings getting in touch either with the local homes registration office or the Division of Defense Housing Coordination in Washington. The Home Owners' Loan Corporation is enabled by a special fund of $100,000 to send a technical inspector to look over the property in question. If the inspector's report is favorable, the owner is granted a priority rating for critical construction materials involved and he proceeds to make his own contracts and carry out the work.

Priorities.

By the spring of 1941 it became apparent that housing construction would have to be curtailed because of the shortages of critical materials (especially metal) needed for direct defense production. The market for critical materials had already become very tight by the middle of September both through genuine shortages and through hoarding engaged in because of the uncertainty of Federal policies. On Sept. 22, a broad plan to grant priority assistance for the construction of 200,000 privately financed defense housing units became effective. The basic policies are determined by the Supply Priorities and Allocations Board (SPAB). The plan is administered by the Priorities Division of the Office of Production Management.

A plan for priorities on public defense housing construction became effective Oct. 24.

With the declaration of war in December and the immediate speeding up of all defense production schedules, it became apparent that practically all private or public residential construction of nondefense housing using critical materials would be brought to a full stop by mid-1942.

Rent Control.

The general rise in price levels, the slowing down of residential construction, and the migration of defense workers caused acute problems of high rents in many areas during the year. The Federal Government, having been unsuccessful in its attempt to stimulate the adoption of state rent control legislation, set up a rent section in the Price Division of the Office of Price Administration to stimulate the establishment and operation of local fair rent committees. By mid-October, 82 of these committees had been established in 23 states. These bodies, set up on a voluntary basis, depend solely upon public under standing and the force of public opinion to control rents. In December, Congress passed Public Act 337, 77th Congress, establishing machinery for rent control in the District of Columbia and pegging rents at the Jan. 1, 1941, level. At the end of the year, Congress had still under consideration the emergency price control bill of 1941 (H.R. 5479) containing a section on rent control that proposes the designation of defense rental areas and Federal regulation of rentals within these areas.

Non-Defense Housing.

In spite of the marked changes in housing activity brought about in 1941 by war conditions, significant progress was made in both public and private production of dwellings. Outstanding in the public field was the work of the United States Housing Authority that reported in December, some four years and one month after its establishment, that 137,064 homes were either under construction or occupied. The average rent per family unit available for occupancy is $12.56 per month for shelter only or $17.67 for shelter plus water, light, heat, cooking fuel, and refrigeration, wherever the latter is provided.

The average cost of a dwelling unit including inside mechanical equipment and its share of administrative expenses was $3,320.

The total USHA local program possible with existing funds comprises 701 projects in 477 localities.

As of Sept. 30, 1941, 6,399 farm homes had been approved for development by local public housing agencies with USHA financial assistance. Of this number, 346 were under construction or occupied.

The passage of state enabling legislation for public housing by New Hampshire left only Iowa, Kansas, Maine, Minnesota, Nevada, Oklahoma, South Dakota, Utah, and Wyoming without such laws.

FHA Program.

Figures for the mortgage insurance program of the Federal Housing Administration for the first half of 1941 showed about 100,000 new homes started or an increase of more than 25 per cent over the first six months of 1940. Since the inception of its program, FHA had insured mortgages in an amount exceeding $4,614,000,000. The average annual income of borrowers purchasing new single family homes with FHA insured mortgages declined consistently from $3,387 in 1936 to $2,665 in 1940. During the period from June 1940 until June 1941, new FHA insured dwellings represented about 40 per cent of the total urban privately financed single family homes construction in the country.

The object of Title VI of the National Housing Act adopted on March 28, 1941, was to stimulate an additional volume of privately financed construction of low-cost housing in areas where national defense activities were creating urgent needs for additional housing facilities and where there was reasonable expectation of continued need for that additional housing after the termination of the emergency. By far the most housing produced under this Title has been offered for sale rather than rent. An FHA survey as of June 13, 1941, indicated that 30 per cent of the Title VI properties for sale were valued by FHA at less than $3,500 including land, utilities, and all improvements. A house sold at this price under the financing plan of Title VI would require monthly payments of $32.14 not including operating costs or maintenance and repair. The same survey showed that rental housing produced under Title VI was leasing from $30 to $60 per dwelling per month. It appeared, therefore, that the bulk of Title VI housing was for a market considerably above that being reached by the public defense housing program.

Farm Security Administration.

The Farm Security Administration's non-defense housing activities are, in general, part of its program for the rehabilitation of rural families rather than an independent activity. FSA has built or repaired over 30,000 dwelling units plus more than 12,000 migratory shelters in its nondefense program. Of its 151 homestead projects, 92 are of the community type. Eighteen homestead projects have been transferred to private ownership; usually represented by homestead associations.

The agency has been called upon extensively in the defense program. It has assisted in the accumulation of large tracts of land in rural areas for the establishment of defense industries or military posts, the relocation of its own clients and other farm families displaced by such activity, the construction of new permanent rural homes to be used temporarily in areas where there is an influx of defense workers and to be transferred later to use by farm families, and the handling of Lanham Act funds designated for stopgap or temporary housing. FSA is using trailers, dormitories, and some demountable family type dwellings in this stopgap program. See also AGRICULTURE.

Home Loan Bank Board.

Increased home construction and financing activity during 1941 was reflected in the first nine months operation figures of the Federal Home Loan Bank Board. Savings and loan associations belonging to the Federal Home Loan Bank system made about 85 per cent of the estimated $1,045,000,000 worth of new home mortgages made by all savings and loan associations through September 1941. At the end of October the Federal Home Loan Bank had outstanding to its regional banks advances in the amount of $184,311,000. The Board's subsidiary, The Federal Savings and Loan Insurance Corporation, by the end of September had extended insurance to the accounts of over 3,037,000 investors in member and non-member local savings and loan associations.

The Home Owners' Loan Corporation, another subsidiary of the Federal Home Loan Bank Board, continued its servicing and liquidation of loans made to distressed home owners. By the end of October it retained 40,000 of the some 160,000 it had taken over from the owners on foreclosure. HOLC had made about 1,000,000 'rescue' loans to home owners before the termination of loan activity in 1936.

General Factors.

The records of building permits issued for construction of residential buildings in all urban areas showed 387,000 dwelling units put under construction during the first ten months of 1941. Of these, about 16 per cent represented the public defense or nondefense housing program. Trends in house production for the first six months of the year indicated that the record of 890,000 units produced in urban areas in 1925 might be approached in 1941. However, by October, largely as the result of the curtailment of critical materials for building construction, the production of dwellings had fallen to the lowest point reached in the previous sixteen months and it was expected that more striking declines would be recorded for November and December.

By the end of October 1941, the cost of producing a standard six-room house used as a measurement by the Federal Home Loan Bank Board had risen to a point 16 per cent above the base cost established for the 1935-1939 period. This rise represented a 12 per cent increase over October 1940.

The National Industrial Conference Board rent index based on 100 for the period 1935-39 increased 2.1 per cent to 109.3 during the twelve months ending October 1941.

Significant General Trends.

Several trends noted during the year were of great importance because they foretold certain changes in housing practice and policy in the future. After repeated attempts New York, Michigan, and Illinois, passed legislation seeking to establish a pattern for the redevelopment of blighted urban areas by private corporations. The New York law is generally conceded to be the most workable.

The redevelopment of blighted urban areas received continued or new study from quite a few national agencies. A number of the proposals include the financing and in some cases the subsidizing of local planning and land acquisition activity by the Federal Government.

The pressure for speed and economy in defense housing together with the favorable attitude of the CIO building construction workers union toward new construction methods gave considerable impetus to various new forms of housing design and prefabrication methods. The increasing proportion of demountable houses being utilized in the defense housing program was especially notable.

Also, partly as a result of the housing needs of defense workers, certain forms of home tenure like cooperative housing and the mutual ownership plan being promoted by the Mutual Ownership Division of the Federal Works Agency were being developed during 1941 to bridge the gap between housing for sale and housing for rent.

The formulation of plans for the post-war period holds promise that not only will some of the war efforts be so directed as to produce improvements that can be integrated with a post-war plan, but that post-war plans will be sufficiently well defined to permit the transfer of some of the nation's productive capacity from war to peace efforts without such severe dislocations as we have witnessed following previous wars. The backlog of projects being assembled by the Public Work Reserve will undoubtedly include much housing both as part of the rebuilding of urban areas and the building of new communities or the extension of present ones to take care of our chronic housing deficiencies. See also ARCHITECTURE; CIVIL ENGINEERING.