good faith" to such an increase and the landlord gives a written lease extending to December 31, 1948. Where such leases are made the units are automatically decontrolled after December 31, 1947, although the lease, unless voided, operates as an instrument of rent control until the end of 1948. All other dwellings are decontrolled after February 29, 1948-the date of the termination of the act.

(2) It empowers local advisory boards, consisting of representative citizens appointed by the U. S. Housing Expediter upon the recommendation of the respective State governors, for each defense-rental area, to recommend (a) the decontrol of their defense-rental area, (b) general increases in rent for the area, and (c) individual rent increases for hardship cases.

Such recommendations of the local advisory boards are to become effective after 30 days unless reversed by the Housing Expediter. The recommendations can be disapproved by the Expediter if not appropriately substantiated by evidence or if not in accordance with applicable regulations.

(3) It decontrolled, as of the effective date of the act, (a) all hotel and motor courts; (b) all apartment hotels which provided customary hotel services; (c) tourist homes serving transient guests exclusively; (d) all housing completed after February 1, 1947, created either by new construction or the conversion of existing dwellings; and (e) all housing accommodations which were not rented during the 2-year period, February 1, 1945, to January 31, 1947.

(4) It eliminated the 6-month waiting period granted to tenants under the former regulations which protected them from short-notice evictions. resulting from the sale of dwellings or from intention of the owner to occupy the dwelling. It also permits evictions when the owner wants to remodel the dwelling substantially, on "nuisance" grounds, etc., in accordance with State or local laws governing evictions, and in all cases without referral to the Housing Expediter.

Within 4 months of these changes, rents in large cities surveyed for the consumers' price index advanced 5.2 percent. This is somewhat lower than the rate of advance in 1920, when rents rose 20 percent in 1 year.

Rental Changes for Individual Cities

Among the 29 cities surveyed after June 1947, all showed advances in rents; the sharpest advance was reported in Chicago, where rents rose 9.5 percent between mid-June and mid-September.

The full effect of the first 4 months' experience under the amended rent controls is shown in 11 cities in which surveys were made in mid-October. In 7 of the 11 cities, rents rose more than 5 percent after mid-June. The smallest advances-under 2 percent were reported for Manchester, Savannah, New York, and Buffalo. In Detroit, Pittsburgh, and Portland (Oreg.), the increase in rents for all dwellings was more than 5 percent. Rents in Denver and Richmond advanced over 6 percent, in Kansas City over 7 percent, and in Indianapolis over 8 percent. (See table 1.)

Ten cities were surveyed in mid-September, covering the period mid-June to mid-September. In all the 10 cities, rents rose more than 1 percent during the 3 months. Rents in Mobile and Portland (Maine) rose slightly over 1 percent. For Cincinnati, Jacksonville, Baltimore, and San Francisco, the increase was about 3 percent. Rents in Boston advanced over 4 percent, in Minneapolis and St. Louis more than 6 percent, and in Chicago over 9 percent.

Among the cities surveyed in mid-July or midAugust, the average increase in rents ranged from less than 1 percent in New Orleans, Philadelphia, and Washington to more than 5 percent in Birmingham.

The proportion of renter-occupied dwellings which were affected by rent increases after midJune 1947 varied considerably from city to city. Substantial proportions of tenants experienced such increases in the 21 cities surveyed in September or October 1947. Although rents were

4 Since 1940 there has been a rapid and continuous shift from tenancy to home ownership. Between April 1940 and April 1947, the proportion of dwellings in nonfarm areas occupied by owners rose from 41 to 53 percentan increase of 28 percent. Much of this increase came about by the withdrawing of dwellings from the rental market. See Effect of Wartime Housing Shortages on Home Ownership, Monthly Labor Review, April 1946 or Bureau of Labor Statistics Serial No. R 1840.

Rent control in the District of Columbia is administered under a separate Act of Congress enacted on December 2, 1941, and recently extended until March 31, 1948, without any of the changes made by the Housing and Rent Act of 1947. In October 1947, an order by the Administrator permitted increases in taxes and water rates since 1941 to be passed on to tenants living in structures containing less than 9 units. For structures of 9 units or more, increases are permitted only after individual investigation. Housing accommodations in the nearby Maryland and Virginia areas are subject to the Housing and Rent Act of 1947.

advanced on 10 percent or less of the rental dwellings in Buffalo, Manchester (N. H.), Mobile, New York, Portland (Maine), and Savannah, a greater proportion of tenants reported rent increases in the other cities: Cincinnati and Jacksonville, 1 in every 7 rental units; San Francisco and Baltimore, 1 in every 5; Boston, Detroit, and Portland (Oreg.), 1 in every 4; Denver, Indianapolis, Kansas City, Minneapolis, Pittsburgh, Richmond, and St. Louis, 1 in every 3; and Chicago, 1 in every 2.

Mobile, and Savannah; $5 to $6 for Buffalo, Denver, Jacksonville, Minneapolis, Pittsburgh, Portland (Maine), Richmond, and St. Louis; $6 to $7 for Baltimore, Boston, Chicago, Detroit, Kansas City, New York, and San Francisco; and more than $8 in Indianapolis and Portland (Oreg.).

Increases by Region and Structure Type

Although by October 1947 it was too early to discern any marked regional differences in the pattern of rent increases, it was apparent that large cities in the Midwest experienced substantial advances since June 1947. In the 10 cities surveyed by the Bureau in September, midwestern cities led the group, with Minneapolis, St. Louis, and Chicago having the biggest percentage increases. Again, in October, two midwestern cities Indianapolis and Kansas City-led in rent increases. Elsewhere, the greatest advances seem to be associated with centers of heavy industry, where demand for housing was particularly great, such as Birmingham, Pittsburgh, St. Louis, and Chicago. Somewhat smaller rises were reported by the shipbuilding centers, such as Savannah, Mobile, New Orleans, and Portland (Maine), where the volume of activity had slackened somewhat since the end of the war.

re

The recent rent surveys of the Bureau indicate that the majority of the rent increases occurred in apartment structures. More than a year before the enactment of the Rent Act of 1947, many landlords, particularly apartment owners, quested prospective tenants to sign leases agreeing to a stated percentage increase upon termination of Federal rent controls. Under these leases the 15-percent increases permitted could readily be made after the passage of the act. However, landlords of single-family houses, apparently reluctant in many cases, to tie up their properties for as long as 18 months, because of the possibility of a favorable sales offer, have not followed this practice to as great an extent.

Among the 10 cities surveyed by the Bureau in September, the 4 cities reporting the greatest percentage increases-Boston, Minneapolis, St. Louis, and Chicago-also have lower proportions of single-family rental homes than the other cities.

"appropriately substantiated" by evidence. To support a finding for decontrol, the Housing Expediter has required evidence covering (a) the number of current rental vacancies; (b) the number of families seeking rental units in the area, as indicated for example by want ads, listings, and oral testimony at hearings; (c) changes which would affect the demand for housing or its supply such as migration, employment opportunities, and new construction; and (d) the estimated extent of changes in rent levels which would result from decontrol.

Strict adherence to the evidence requirements in decontrol recommendations probably will permit extension of decontrol in some additional small areas where wartime population has diminished. Among the large urban areas of the country, however, recent housing surveys indicate that a serious housing shortage still exists. In the

TABLE 2.-Actions of the Housing Expediter on local advisory board recommendations, July 1-Nov. 28, 1947

316, 636

referred to the critical, acute, or serious housing shortages now existing in their areas."

In 48 of the 110 areas recommended for a continuation of control, the local advisory boards also recommended that for the time being no general rent increase be granted, as current rent levels were held to be adequate. In a number of instances the boards stated that hardship cases could be dealt with adequately by individual adjustment procedure provided under the present regulations. No decision was made on the question of a general increase in rents in the remaining 52 areas where continuation of rent controls was recommended.

For areas where a general rent increase was recommended by the local boards by November 1947, the Housing Expediter had acted on 6granting 2 and denying 4. In the Louisville area an increase of 5 percent was permitted because— among other considerations-a new sewer rental was estimated to cost landlords between 2 and 4 percent on the majority of rented properties. In the Klamath Falls (Oreg.) area, a 10-percent general rent increase was approved to compensate for a 50-percent increase in the tax levy between 1943 and 1947. The Expediter refused requests by the local boards for St. Petersburg (Fla.) to increase rentals on Negro-occupied tenant dwellings only; for Dickinson County, (Kans.), to increase rentals 15 percent for all units renting at "freeze date" levels; and for Saline County (Kans.) and the Chicago area, a flat 15-percent increase on all dwellings. In denying the Chicago request because the recommendation was not appropriately substantiated, the Expediter emphasized two factors to be considered in determining the adequacy of the general rent level. First, the operating position of landlords generally within the area as compared with past years; and, secondly, any unusual circumstances which

• Several local boards requested that rent controls be extended for another year when the present act expires. For example, the Albany-Troy, N. Y. advisory board recommended that "the emergency rent laws be continued in force for an indefinite period or at least for another year with the proviso that if the present emergency has not been alleviated at the expiration of such act, that the act may be renewed for another period of time." Others recommended the strengthening of eviction controls, and the recontrol of new and other decontrolled housing.-Office of Housing Expediter, Press release No. 934, November 28, 1947.

caused the rent level on the maximum rent date to be abnormally low or not representative."

Vacancy Rates in Urban Areas

At the end of October 1947 the United States Bureau of the Census released the results of its survey of vacancies conducted in April. In urban areas of the country, according to that survey, the habitable vacancies available for rent were negligible, amounting to 0.4 percent of all ordinary residential units. This was lower than the habitable rental vacancy rate of 0.9 percent reported in November 1945, shortly after the end of World War II. Vacancy surveys in each of 36 large metropolitan areas showed that habitable vacancies offered for rent amounted to less than 0.5 percent in 30 areas, between 0.5 and 1.0 percent in 5 areas, and more than 1.0 percent in only 1 area. In addition, approximately 1,655,000 dwellings in urban areas contained "doubled-up" families.

The proportion of new construction for rental is estimated by the Bureau of Labor Statistics to have increased steadily since May 1947, and will probably continue into 1948, although any increase in rental housing for moderate and lowincome families is expected to be slight. Whatever additions are made will be absorbed readily by undoubling of families, by families now living in accommodations other than ordinary dwellings, and by newly formed families.

The Rent Index &

Indexes of changes in rent are shown in table 3 for the 34 large cities in the Bureau's consumers'

7 When this article was written, there was no information on income and operating expenditure for rental units after the modification of rent controls in June 1947. In General Fleming's testimony before the Senate Banking and Currency Committee on January 31, 1947, he stated that surveys in 90 cities showed that "for the year ending June 30, 1946, net operating income had declined from its 1944 peak of 131 percent of the 1939 base to about 127 percent for multifamily structures and from 146 percent to about 143 percent for 1 to 4 family structures during the last 6 months of 1946 • estimates indicate that operating expenses probably rose about 4.0 percent for multifamily units and approximately 2.7 percent for 1 to 4 family units. If this is correct, net operating income from 1946 is still about 121 percent of the 1939 level for multifamily units and about 139 percent of this base for 1 to 4 family units."

For an explanation of the index, see Technical Note on Rent Index, which follows table 3.

Technical Note on Rent Index

The data on changes in rents were obtained from surveys of residential dwellings in 29 of the 34 cities included in the Bureau's consumers' price index. Of these 29 cities, 6 were surveyed in July, 7 in August, 10 in September, and 11 in October, 5 of which had been surveyed during the previous 3 months. The cities were so selected that an estimate of change in rent for the 34 large cities combined for each month could be made with a reasonable degree of accuracy.

The rent index, a component of the consumers' price index for moderate-income families in large cities, reflects changes from period to period in rents charged for the same dwellings with the same facilities and services. Therefore, changes in the index should not be compared with changes in the average contract rent since a comparison of average contract rents reflects in addition to the price changes shown in the index, shifts in the size and type of rental units, and changes in the items included in the contract rent.

The Bureau of Labor Statistics obtains its figures on rents by asking tenants in a large sample of dwellings what rent they pay and what facilities and services are included in the rent. The samples represent all tenant dwellings, new and old, small and large, from single homes to apartments. These rents are then compared with those reported by the tenants for the same dwellings at the time of the last rent survey, after adjustments are made for any changes in the facilities and services included in the rent. The figures, therefore, represent rents paid for the same dwelling from one time to another; they do not take into account rentals for newly constructed dwellings nor costs of repairs made by tenants. The figures do not reflect changes in the sales prices of homes and in the housing costs of the worker who has migrated, nor do they take into account the additional costs of "extras" or premiums charged by some landlords when they rent to new tenants. The figures represent average changes in rents for the same dwellings whose tenants have not had to pay for major items of maintenance or repairs out of their own pockets.

At the present time rents are collected by personal visit to tenants in a large sample of dwellings once a year, and in the intervening quarters by mail questionaire.