1942: Housing Developments

The year 1942 saw the completion of a trend well marked in 1941 — the complete conversion of housing activities from peacetime to wartime objectives. By December 1942 no building construction costing more than $200 could be undertaken without specific approval by the War Production Board; none of the critical construction materials could be obtained without a WPB priority rating; 76 million persons were living in 355 defense rental areas where rents had been frozen by the Office of Price Administration; all dwellings constructed with critical materials obtained with priorities had to be made available only to persons certified by the Government as in-migrant war workers.

Nature and Magnitude of War Housing Need.

The war housing problem is the result primarily of an overall housing shortage plus tremendous shifts of population. Practically every urban area in the country entered the prewar defense period with an accumulated housing shortage. Curtailment and final stoppage of normal private housing construction and of public construction of the so-called low-rent or slum clearance type made these shortages worse. On top of this came the greatest internal migration the country has ever seen. The National Housing Agency, in collaboration with the War Manpower Commission has estimated that 1,600,000 workers in vital war industries will move from one employment area to another during the year ending July 1, 1943. These workers coming into new areas are called in-migrant war workers. It is with their accommodation that the country's war housing program is primarily concerned. The task is so great and the currently available resources of the country so small, that there is no prospect of providing adequate housing during 1943 for the millions of families still living in urban and rural slums, even though the workers of these families may be engaged in the most vital war work.

NHA expects that of the 1,600,000 migrant war workers enough families will contain more than one worker to reduce the total number of accommodations to be made available to 1,320,000. Of this number 270,000 are expected to be housed in new privately built family typed dwelling units, 205,000 in publicly built family type units and 195,000 in publicly built units of other types.

New Government Machinery.

Partly as a result of and immediate need for coordinating housing activities and partly as the result of a long-felt need for a new pattern of the Federal Government's peacetime housing activities, the some seventeen Federal agencies engaged in various housing functions were reorganized in February by the use of the President's war powers into one overall organization, the National Housing Agency, with three subsidiary agencies, the Federal Housing Administration, the Federal Home Loan Bank Administration and the Federal Public Housing Authority. The principal functions of the first two of the subsidiary agencies, FHA and FHLBA remained the same as prior to the reorganization, namely: the insurance of mortgages for home construction repair or refinancing; and the provision of a central credit pool for home financing institutions respectively. The third agency, FPHA was an entirely new one. It absorbed and superseded various Federal agencies engaged in finance, construction or operation of publicly-owned non-farm housing. The two major agencies thus absorbed were the United States Housing Authority and the Defense Housing Division of the Federal Works' Agency. The Division of Defense Housing Coordination, the agency responsible during 1941 for determination of war housing need and the programming of provision of such housing was absorbed by the new National Housing Agency. NHA and FPHA each established during the year ten regional offices to which were delegated substantial degrees of administrative authority. FHA and FHLBA had previously developed effective regionalization.

Methods of Attaining War Housing Objectives.

Numerous methods were used to attain the several changes in housing practice deemed necessary for the most effective prosecution of the war.

All housing construction not considered vital to the war effort was prevented by the requirement that all construction involving an expenditure of more than $200 in one year must be approved by the War Production Board before it was undertaken, even though the builder had the necessary materials on hand.

Another reduction in the amount of critical materials used per war worker housed in newly constructed dwellings was sought by the adoption of standards specifying the maximum size of rooms or dwelling units, and the maximum amounts of plumbing and wiring materials etc.; the increasing use of building types other than family units, such as dormitories and war apartments; and a general switch from permanent to demolishable or demountable types of construction. Lumber shortages became so acute in some areas that masonry construction was actually being used in place of frame construction even though the buildings constructed were considered to be temporary, and even though the cost of masonry construction was higher than frame. It seemed likely that during 1943 construction and design standards would be so low as to render the building of further permanent housing both a social and a financial hazard. In publicly-built permanent-type family housing, the quantity of critical metals used per unit was reduced from a 9,700 prewar level to 2,700 pounds.

Distribution of critical materials to approved construction was governed by a system of priorities first put into use in the fall of 1941. By mid-1942 however it was apparent that due to the growing scarcity of critical materials and the practice of issuing increasingly higher priority ratings for materials on Army and Navy contracts and other construction believed to be the most important, priorities became highly inflated and a large portion had to be rescinded and replaced by higher ones in order to be at all effective. By the end of the year it was generally agreed that some system of allocations of actual material in place of the right to try to buy (as represented by a priority rating) would have to be put into effect. During 1942, 150,000 private units and 128,000 public units of all types utilizing preference ratings under the priorities' system were completed.

Rent control as part of the general anti-inflation program was achieved by the same general process used to fix other prices, but it was put into effect area by area as the need appeared rather than being applied to the whole county or to large regions simultaneously. First there was usually a period during which voluntary control was urged. If this failed to work (and it practically always failed) the OPA named a rent administrator and fixed a rent ceiling. The ceiling was the level of rents on a given date (Mar. 1, 1941, for most of the areas). There was usually a lag of several months between the date on which rent control was announced and the date on which the ceiling rent was put into effect. This time was required to set up the administrative machinery in an area and to register and check the ceiling rent for each dwelling.

A greater use of existing dwellings in lieu of new construction was encouraged during the year by an NHA program that included registration of available dwelling space in most of the critical housing areas, the Federal leasing of properties that could be converted by a reasonable amount of alteration or repair into more dwelling units, and the outright purchase by the Government of some properties for the purpose of converting them into more dwelling units. In the fall of 1942 these various activities of NHA aiming to achieve greater utilization of existing dwellings were grouped together in a part of the NHA known as the Homes Use Service. The local centers for carrying out this part of the NHA program were known as War Housing Centers. The Home Owners' Loan Corporation, one of the constituent agencies of the FHLBA, served NHA in its conversion program by acting as agent for leasing, altering, and managing properties suitable for conversion. Both leased and purchased properties that were to be used for dormitory-type housing were handled by FPHA as an agent for NHA.

Measurements and Trends in Housing Production.

The effects of various controls imposed on home building naturally showed clearly in sharp declines in residential construction registered during the year. Estimates based on figures gathered by the Bureau of Labor Statistics of the U.S. Department of Labor on permits for residential construction in representative urban places of 500 population or over showed that privately-built family units placed under construction during 1942 dropped 51 per cent. Comparable public housing increased 80 per cent during the year. Private construction, since July 1940, has constituted about 70 per cent of all residential work.

Based on an index of 100 for the period 1935-39 construction costs of a typical six-room frame house rose from 118.5 in October 1941 to 124.5 in October 1942.

Increased national income and the almost complete disappearance of vacancies were reflected in the lowest rate of recorded foreclosures on non-farm residential property in the last fifteen years; there being only 36,147 during the first ten months of 1942 as against 49,840 during the same period in 1941.

By the first of October the Federal Government since 1932 had financed directly about 648,000 urban housing units of all types counting developments in all statuses from approval to occupancy. About 77 per cent of these units were war housing — that is financed with war housing appropriations and limited to occupancy by war workers. About 500,000 war workers and numbers of their families were living in public war housing at the end of 1942 and this number was increasing at the rate of about 30,000 per month. With the low-rent non-war public program brought to a complete stop it appeared likely that the total number of units in the public war program would exceed the peacetime program by four or five to one before the end of 1943. The 128,000 public units completed during 1942 were composed of about 63 per cent family dwelling units (permanent and temporary), 6 per cent war apartments for 2-person families, 24 per cent dormitories, for single workers, and 7 per cent trailer homes.

The Home Owners' Loan Corporation, one of the subsidiaries of the Federal Home Loan Bank Administration, had returned by Nov. 1, 1942, about 44 per cent of the funds loaned to over one million distressed owners or residential properties. More than 96 per cent of the corporation's debtors were either paid up to date or less than three months in arrears.

Requirements of speed in construction and greater economy of materials dictated greater use of stop gap housing (such as trailers) and demountable or demolishable types of construction both for family type units and for dormitories and small apartments for couples, sometimes called war apartments. The adoption of these temporary types of construction further discouraged participation in the provision of war housing by private owners.

The interrelations of various Government war activities was clearly demonstrated during the year when it was found that original estimates of the proportion of public war housing to be constituted by accommodations for single workers had to be reduced sharply because the Selective Service was taking more and more of the single men, and the older men who usually had families could not be attracted to vital war jobs unless housing accommodations for their families were available. The dwindling supply of rubber available for transportation necessitated complete reconsideration of plans for war plant and housing project locations. Thus the War Manpower Commission, the Selective Service Administration, the Office of Defense Transportation, and the Plant Site Location Board of WPB were all involved in reaching decisions about the provisions of housing.

Some of the public war housing constituted entirely new towns. A most striking example is the construction of Vanport, Oregon, between Portland and Vancouver. When it reaches its planned population of 40,000 it will be the second largest city in Oregon.

The Federal Housing Administration's activity of insuring loans for home building, repair, and refinancing held up better than did the level of general private construction. During the year construction was started on approximately 195,000 dwelling units with FHA insured mortgages. From the inception of its mortgage insurance program until December 1942 FHA insured loans totalling over $6,301,664,000.

Legislative and Legal Action.

Congress by appropriating an additional $600,000,000 brought to a total of $1,620,000,000 the funds for public war housing. Congress also increased from $300,000,000 to $800,000,000, the authorization for FHA to insure war housing mortgages.

No important state housing legislation was passed, but in Ohio the Supreme Court, on appeal by the Columbus Metropolitan Housing Authority from the Board of Tax Appeals, decided that public housing is not a public use in the meaning of the Ohio Constitution and that properties of local housing authorities cannot be exempt from real property taxes on that grounds. The decision if not revised or altered would result in the forfeiture to the Federal government of title to all locally-owned Federally-aided public housing in Ohio in April 1943.

Little Planning for Post-War Period.

Every major plan put forward during the year for a post-war program called for housing to constitute the largest part of building construction. Some responsible groups point to the need for producing 1¼ million family units a year as compared to less than 900,000 built in 1925, the highest yearly production between the two wars. There was substantial agreement that much of this new housing must replace dwellings now occupying the slums and blighted areas of the cities and that there must be some form of public aid to make some of it available at less than its full normal cost to the occupants. The need for comprehensive city and regional planning as a basis for housing and other construction, and the need for making available at prices much less than present market figures, land in blighted urban areas, both pointed to the likelihood of the federal government being called upon to give financial assistance to local governments for planning and for land subsidies. Only a handful of cities had prepared actual post-war plans for the location and acquisition of sites of large-scale housing developments to be constructed by either public or private enterprise after the war.