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TABLE VI-F.-Expenditures for residential construction compared with expenditures for all capital goods: Expenditures for new nonfarm residential construction compared with total gross capital formation and with expenditures for other major elements of gross capital formation, 1920-39

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1930.

100.0 55.1

1931.

100.0 69.2

30.7 13.8
13.8 3.0
25.4 9.4 2.5
12.3 2.3
30.5 12.2 2.2
31.3 11.3 3.0 6.0
34.7 13.3 3.0 6.5
35.4 14.0 3.5 6.5
100.0 51.7 17.8 32.4 12.1 4.0 5.7
12.0 41.5 18.7
16. 2 51.4 28.6

4.0

5. 1

5.2 2.6

3.5

50.2

5.2

6.3

3.2 3.0

41.9

4.2

6.8 2.5 2.4

50.1

4.8

8.5 3.0

3.0

37.8

5.4

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2.2 6.1

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1.6 .9 4.0 1.6 1.0 1.9 11.6 5.5 2.1 1.4 .7 11.9 100.0 53.7 9.2 41.7 27.1 4.1 5.4 2.3 2.8 1.7 1.1 100.0 43.6 8.7 32.8 21.8 2.6 4.5 1.7 2.1 100.0 41.4 11.3 27.6 17.8 1.9 2.3 1.4 2.5 100.0 40.2 11.7 26.9 17.4 2.3 2.0 1.4 1.6 100.0 40.8 12.9 26.4 14.3 3.6 2.6 4.6 1.3 1.5 .8 .7 59.2 100.0 53.6 18.4 33.0 21.0 1.9 2.8 5.0 2.3 2.2 1.3 100.0 47.4 18.7 27.0 17.5 1.7 2.2 4.0 1.6 1.7 1.0

6.3

10. 1

3.1

.7

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48.3

44.9

30.8

46.3

56.4

58.6

59.8

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52.6

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Includes expenditures for new construction and additions, but does not include value of land. Excludes nonresidential building by privately owned public utilities. Figures for farm construction for the years 1920-28, include construction for all purposes and cannot be segregated into residential and nonresidential. They include some maintenance and repairs. NOTE.-For all new construction and for several of the individual types of construction, particularly farm, figures for the period 1920-28 are not strictly comparable with figures for the years 1929-39. Figures for the later years vary slightly from those used in the compilation of gross capital formation.

Source: Gross capital formation computed by adding new public construction to private gross capital formation as reported by National Planning Association for years 1920-28 and by Department of Commerce for years 1929-39. All other data: Department of Commerce.

National Housing Agency, Office of the Administrator, Housing Market Service, Nov. 27, 1944.

It shows that in years of high total capital formation, such as the years between 1923 and 1929-Will you point that out for them, Mr. Fitzpatrick?—new nonfarm residential construction has generally amounted to about one quarter. And that is in the red, is it not, Mr. Fitzpatrick? It is about one quarter. In years of low total capital formation it has varied from about 9 to 16 percent of the total. The disparate shrinkage in residential construction, not only absolutely but also as a proportional part of total capital formation in periods of relative depression, tends to show again that housing may be a bellwether. Since capital formation is the main outlet for savings into the various areas of new investment, the role of residential investment in capital formation epitomizes the role of residential construction in general economic expansion or contraction.

Now we carry that same thought a bit further in the next chart, VI-G.

(See chart VI-G in appendix.)

It shows that in 1939 expenditures for housing-including housing construction, rent and cash expenses of ownership, and operation, as shown in the black segment-comprised almost one-fifth of our total gross national product.

sir.

Senator BUCK. Is that about normal?

Mr. BLANDFORD. That was in 1939; that was fairly typical. Yes,

Well, so much for housing as one of the controlling factors in employment and investment opportunity. Now let us look for a moment at the economics of housing as it enters into total consumer expenditures.

Chart VII-A does this, averaging the results for the 10-year period 1930-39.

(See chart VII-A in appendix.)

TABLE VII-A.-Consumer expenditures for housing compared with total consumer expenditures: Consumer expenditures for household' rent and operation, compared with total consumer expenditures and with other principal types of consumer expenditures, 1930-39

DOLLAR VOLUME

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expenditures1. 71, 081 61, 418 49, 672 46, 522 51, 988 56, 449 62, 272 66, 219 63, 303 66, 466 59,542

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TABLE VII-A.-Consumer expenditures for housing compared with total consumer expenditures: Consumer expenditures for household rent and operation, compared with total consumer expenditures and with other principal types of consumer expenditures, 1930-39-Continued

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Includes consumer expenditures of nonfarm and farm inhabitants but does not include direct taxes on individuals, such as income taxes. The purchase of a house has been treated as a capital investment and excluded, while expenditures for household rent or estimated household rent have been included. However, expenditures for durable consumer goods, such as automobiles, pianos, washing machines, etc., have not been treated as capital investments and have been included as consumer expenditures.

2 For ferm dwelling units, represents the estimated rent of farm houses only; for nonfarm dwelling units, represents contract rent for tenant-occupied units and estimated rent for owner-occupied units. Payment for utilities, furnishings, and services is included in contract rent only where they are provided by the landlord and are included in the rent charged. Estimated rent on owner-occupied units is on a comparable basis with contract rent.

Represents expenditures for purchase and repairs of household furnishings, equipment and supplies, utilities, services, fuel, communication, domestic service, etc. Since payment for utilities, furnishings and services included in contract or estimated rent as defined in footnote 2 have been excluded from the figures for household rent in this table, in order to avoid duplication, the figures differ from those published by the Department of Commerce.

Includes purchases and servicing of radios and pianos.

Source: Department of Commerce, Bureau of Foreign and Domestic Commerce. The figures on contract or estimated rent are unpublished data.

National Lousing Agency, Office of the Administrator, Housing Market Service, Nov. 27, 1944.

It shows that the American people, as consumers, spent more for household rent and operation than for any of the other listed items except food and tobacco combined. The second bar down is the amount of consumer expenditures for household rent and operations, and food and tobacco immediately below it is but slightly larger. The circular diagram shows that 28.8 percent of all consumer expenditures are for household rent and operation. We must remember that consumer expenditures for housing are not only a prime factor in the family budget; they are also a conditioning factor throughout the whole economy, because they create a direct and indirect demand for the products of industry, agriculture, and labor.

As a final illustration of the role of housing in this quick survey of our national economy, chart VII-B contrasts home indebtedness with the total private long-term debt of the country for the 10-year period 1930-39, and it shows pretty much throughout those years, that home indebtedness has been more than 30 percent of the total. (See chart VII-B in appendix.)

TABLE VII-B.-Home indebtedness compared with private long-term debt; estimated outstanding balance of mortgage loans on nonfarm housing compared with estimated total amount of private long-term debt, 1930–39

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Source: U. 8. Department of Commerce.
National Housing Agency, Office of the Administrator, Housing Market Service, Nov. 27, 1944.

This concludes the summary of the role of housing in the national economy, and we might spend a moment summarizing a picture of housing in the municipal economy, and we can do it I think rather quickly.

This chart, VIII-A, shows the residential use of land is more than any other use, as compared with industrial, commercial, streets and alleys, parks and open spaces, public and institutional.

(See chart VIII-A in appendix.)

The residential use of land, in cities of over 500,000, is 34 percent as shown by that red bar. It is 35 to 40 percent, typically, of the developed land areas.

The next chart, VIII-C, summarizes a study made for all the cities in the country with populations over 100,000.

(See chart VIII-C'in appendix.)

GENERAL HOUSING ACT OF 1945

TABLE VIII-B.-Estimated ratio of assessed valuation of residential real estate to total assessed valuation of all property subject to local property tax (in cities of over 100,000 population, 1941)

[Amounts in thousands of dollars]

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1 Total assessed valuation from Bureau of Census, U. S. Department of Commerce, Financial Statistics of Cities, 1941, vol. 3. The material for cities of under 100,000 population is not in form for ready use. 2 These estimates rest upon the following bases: (1) As indicated by the Financial Statistics of Cities, 1941, vol. 3, table 9, the ratios of total real property valuation to total assessed valuation are: New York City considered separately-100 percent; other group I, 72 percent; group II, 86 percent; group III, 73 percent; group IV, 82 percent; (2) the ratio of residential real property valuation to total real property valuation is approximately 60 percent (based upon studies of a number of individual cities brought together in the report Housing in the Municipal Economy, Urban Development Division, National Housing Agency, July 15, 1944).

National Housing Agency, Office of the Administrator, Urban Development Division, Jan. 1, 1945. TABLE VIII-C.-Estimated tax revenues from residential property as compared with total tax revenues and total city revenues (in cities above 100,000 population, 1941)

[Amounts in thousands of dollars]

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33. 7

Total...

2,551, 893

1,913, 218

852, 626

2 44.6

233. 4

1 Includes prorated revenue of overlying units of local government (except counties). Total tax revenues and total city revenues derived from Financial Statistics of Cities, 1941, vol. 3, Bureau of Census, U. S. Department of Commerce. Proportion of residential tax revenue to total taxes and total revenue estimated on the basis of available data for individual States and cities. These ratios represent general approximations and would vary according to local situations and tax practices. Such ratios are discussed in Housing in the Municipal Economy, Urban Development Division, National Housing Agency, July 15, 1944. The material available is not in form for ready use for cities of under 100,000 population.

Weighted.

National Housing Agency, Office of the Administrator, Urban Development Division, Dec. 14, 1944.

It indicates that housing constitutes about 40 percent of the developed urban land areas, the studies confirming our previous chart; about 50 percent of the assessed valuation of all urban property subject to local property taxation; and about 60 percent of total urban real property valuation. It also indicates that housing provides 45 percent of local tax revenues and 35 percent of total local

revenues.

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