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be applied to the backlog of demand. New home construction at this rate will quickly provide for the 1,240,000 families which are now doubled up as a result of the housing shortage, restore normal vacancy ratios, and still provide for the elimination of slum housing. In a word, the solution to the housing shortage is the continuation of the record home-building program now under way. 2. Slum problem

Cause.-A slum is more than a group of dirty, dilapidated buildings. Slum housing is part and parcel of other slum conditions, such as poor health, poor education, low standard of living and economic insecurity. All stem from the basic economic factor of low income. The complexities of this ageless problem of poverty, accented by the industrial revolution and the attendant intensive urbanization, extend far beyond the scope of this statement of housing policy. Aside from the over-all economic factor, slum housing can be attributed to more immediate and direct forces. Foremost among these is the utter failure of cities to enforce minimum health, sanitary, fire, and occupancy laws. Probably fewer than 1 percent of our cities have properly enforced the minimum standards of housing established in city ordinances. Unhampered by the necessity of complying with the laws neither landlords nor tenants have repaired, improved, or given normal maintenance to their houses. Law-enforcement officials, Government housing authorities and an indifferent public have allowed housing which has passed its economic life and is ready for demolition to stand, to endanger the lives of its tenants and to further depreciate surrounding residences.

In addition blight and slum conditions have arisen because of poor city planning, poor zoning, and poor zoning enforcement, and the absence of a satisfactory method of enforcing tax liens. Inadequate building codes, and poor landdevelopment practice in the past must also bear their share of the blame.

Some properties are not maintained because the tenants simply cannot afford the additional rent to pay for maintenance and repair expenses on the part of the owner. On the other hand many slum properties, overcrowded and with little or no maintenance expense, provide a substantial profit to the landlord, and as a result command a price far higher than any builder or buyer could afford to pay if he were to redevelop the area. These high prices, plus tax and title difficulties and mixed land usage have effectively obstructed both major redevelopment and piecemeal new construction and thus have perpetuated the slum condi tions.

Solution.-Great progress has been made in reducing poverty and in increasing the incomes of the low-earning-capacity families of the Nation. Continued economic progress, combined with education and medical advancement, will remove the underlying causes of bad housing just as it will eliminate other slum conditions.

Meanwhile, the income phase of the problem must be met by adequate relief and welfare assistance to underprivileged families. State, county, and local governments are authorized to grant relief to poor and needy families, and these powers should be used to assist families to secure safe and sanitary housing as well as food, clothing, and other necessities. Obviously, it is as unwise and impractical for the Government to enter the housing field through direct ownership, as it would be for the Government to produce and manufacture the food and clothing needed by underprivileged families.

Concurrently with this assistance on the income problem, the following direct methods must be employed to eliminate slum housing:

1. Effective building codes and housing sanitation, fire, and safety laws must be adopted and rigidly enforced in every American city.

In many cases amendments and improvements to city laws will be necessary, but it is primarily a matter of enforcement effect. Building inspectors, health officers, and fire officials must have more adequate staffs. Judges must support the enforcement program by swift, impartial action in prosecuting and penalizing property owners and tenants who fail to comply with the laws. Best results can be obtained by a block-by-block campaign to compel simultaneous observance of the law by all property owners and tenants so that there can be no plea of discrimination and so that general neighborhood levels will be raised. That such a program can be accomplished is evidenced by the recent rehabilitation of over 8,000 slum houses in Baltimore, Md. The committee on Government housing has inspected the rehabilitated areas in Baltimore and has conferred with city officials and civic leaders in that city. The committee feels that if similar programs are adopted in every major city, visible progress will have been made for the first time in cleaning up the slums.

2. State, county, and local governments should be authorized by State law to acquire slum areas and clear them, to assign appropriate portions of their land for park and other public purposes, and to sell the remainder to private parties with proper restrictions to conform to State, county, and city plans. The net cost of this operation—that is, the difference between the total cost of acquisition and demolition and the receipts from sales of cleared land-should be borne by local, county, State, or National appropriations and borrowings to be repaid hy taxation. Approximately 20 States have adopted such slum-clearance legislation since 1940. These programs, inoperative because of the war and the postwar housing shortage, should be activated as rapidly as possible.

3. State laws should provide for private redevelopment housing corporations, giving them adequate power to assemble land with reasonable provisions to insure redevelopment in keeping with a proper city plan and sound community development. Provisions should be made for the future taxation of these projects, and all housing-public, semipublic, and private-should pay its share of the tax burden to assist in providing schools, sanitation, police protection, fire protection, and other necessary governmental services. Legislation of this type is on the lawbooks of many States, and such corporations can now begin to function.

4. To prevent the creation of new slum areas, each State should provide a comprehensive framework for State, county, and city planning and zoning laws. Provisions should be made for the effective administration of such planning and zoning laws within the individual communities. These local law's must be enforced on a nonpolitical basis.

CONCLUSION We will make a direct and effective attack on the slum problem, if the energies of our public officials and civic groups are concentrated on these practical steps. There has been a tendency to ignore the root causes of slums and to dissipate much of our housing energy with public housing experiments which to date are marked only by costly failure and insignificant slum clearance.

Savings and loan associations

[Approximate data as of Mar. 31, 1949] Number of institutions.

6,000 Assets

$13, 350,000,000 Home-mortgage portfolio..

$11, 100, 000, 000 Savings accounts.-

$11, 600, 000, 000 Number of borrowers.

3, 300,000 Number of savers.

10,000,000 Proportion of new homes financed by associations in 1948

percent..

20 Proportion of total home-mortgage financing done by associations in 1948_

-percent...

30 Total home-mortgage loans made by associations in 1948. $3, 606, 000, 000 Total loans on new construction in 1948_.

$1, 044, 000,000 From beginning of GI loan program through to end of 1948, associations closed 496,000 GI loans amounting to--

$2, 868,000,000 Proportion of all GI home loans (dollar amount) which associations have closed.

--percent-

37 Proportion of associations' total lending which has been comprised of GI loans.

--percent..

22 Proportion of associations' total mortgage portfolio comprised of GI loans as of Dec. 31, 1948_

-percent-

25 Proportion of total GI loans made by associations in 1948 which was for the purpose of financing new homes.------percent.

33 Proportion of total GI loans of associations which were delinquent as of Dec. 31, 1948_.

-percent.

1. 19 Annual new inflow of savings to associations during past 3 years_ $1,100,000,000 Most common dividend rate as of Dec. 31, 1918_ -percent -

294 Next most common dividend rate as of Dec. 31, 1948_---do---Most common lending rate on loans other than GI loans__do_. Most common maturities at which new construction loans are currently being made.

-years-

13-15 Total reserves, legal and unallocated, to total assets, Dec. 31, 1948

-perceut..

7.5 Liquidity ratio : Cash and Government bonds to total assets

as of March 31, 1949 (this ratio stood at 18.1 percent as of Dec. 31, 1948)

-percent-

21

All savings and loan associations and cooperative banks in the United States,

Dec. 31, 1948

[graphic]

Alabama
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia.
Idaho..
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota.
Mississippi
Missouri
Montana
Nebraska.
Nevada
New Hampshire
New Jersey.
New Mexico
New York
North Carolina
North Dakota.
Ohio
Oklahoma
Oregon.
Pennsylvania
Rhode Island
South Carolina.
South Dakota.
Tennessee
Texas.
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin.
Wyoming
Hawaii.
Alaska..

Assets

Federal

Total

3, 468,000
52, 459, 000
86, 634,000

12, 576, 000
200, 168,000

1,684, 000
30, 248, 000

$38, 418,000
21, 618, 000
37, 145, 000
572, 450,000

71, 325, 000
114, 245, 000

1,068, 000
71, 380, 000
255, 583, 000
141, 536,000

30, 463, 000
516, 864, 000
262, 688,000
71, 351, 000
74, 040, 000
154, 279, 000
27, 125, 000

6, 200,000
150, 535, 000
261, 401,000
173, 391, 000
210, 456, 000

23, 702, 000
122, 019, 000

3. 516, 000
20, 223, 000

3, 801, 000
19, 704, 000
42, 337, 000

11, 770, 000
571, 562, 000
88, 606, 000

11,046, 000
629, 502, 000
124, 223, 000

60, 093, 000
384, 748, 000

8, 688,000
67.861, 000

5, 183, 000
109, 466, 000
138, 968,000
23, 357, 000
11, 374, 000
77, 184, 000
179, 438,000
39, 774, 000
78, 535, 000
13, 424,000
5, 136, 000

1,502, 000
6, 140, 298, 000

$46, 557,000
28. 837, 000

42, 450,000
1,015, 433, 000

100, 844, 000
170, 579, 000

21, 463, 000
383, 150,000
262, 191, 000
172, 770,000

31, 844, 000
1, 018, 016, 000

457, 775, 000
148, 780,000
152, 080, 000
219, 270, 000
185, 874, 000

41, 803, 000
326, 176, 000
847, 185, 000
308, 226, 000
292, 111, 000

30, 446, 000
258, 965, 000

25, 248, 000
111,308,000

4,028, 000
42, 135,000
529, 970,000

20, 630, 000
1, 120, 439, 000
248, 199,000

36,685, 000
1, 899, 680,000

166, 463, 000
109, 395, 000
878, 369,000
96, 753, 000
90, 740,000
10, 140,000
110, 094, 000
266, 631, 000
67, 591, 000

14,842, 000
129, 643, 000
266, 072, 000

52, 351, 000
278, 703, 000
15, 108,000
35, 384, 000

1,502, 000
13, 190, 922,000

140
19
11
74
62

153
11
9
1

Total.

4, 586

1, 478

6,064

7,050, 624, 000

NOTE.-Based upon 1947 annual report of United States Savings and Loan League secretary-treasurer.

Home mortgage financing by savings and loan associations
1.JVOLUME OF HOME MORTGAGE LOANS CLOSED BY PURPOSE OF LOAN

New con-
struction

Purchase of
existing
homes

All other

Total

Percentage
of loans on
new con-
struction
to total

First quarter, 1948
Second quarter, 1948.
Third quarter, 1948.
Fourth quarter, 1948.

Total, 1948
First quarter, 1949 1

$234,000,000 $413,000,000 $200,000,000 $847,000,000
290, 000, 000 487, 000, 000 238, 000, 000 1,015, 000, 000
278, 000, 000 447,000,000 222,000,000 947,000,000

242,000,000 363, 000, 000 192,000,000 797, 000, 000
1,044,000,000 1,710,000,000 852,000,000 3,606,000,000

200,000,000 278,000,000 188,000,000 665,000,000

27.6
28.6
29.3
30.3

29.0
30.0

1 Estimated for March.

II. VOLUME OF HOME MORTGAGE LOANS CLOSED BY TYPE OF LOAN

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NOTE.- It is estimated that in 1948 and first quarter, 1949, FH A-insured mortgages amounted to approtimately 6 percent of the total lending volune of savings and loan associations as compared with 3.4 percent in 1947 and 1.1 percent in 1946, GI loan data are based upon Cnited States League survey.

III. TOTAL NUMBER OF HOMES FINANCED BY SAVINGS AND LOAN ASSOCIATIONS

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NOTE.-Mortgage recordings reported by Home Loan Bank Board. It is estimated that loans on new .construction average $5,980 and loans for home purchase, $5,210 (release of FSLIC Feb. 19, 1948).

Annual volume of home mortgage financing by all types of lenders, grouped Number of nonfarm housing units started in the United States

according to type of loan

Year

Total 1

Conventional

loans

FHA-insured loans ? (1- to 4family homes)

GI loans

1939.
1940.
1941
1942
1943.
1944.
1945
1916.
1947.
1918
1949, first quarter.

$3,507,000,000 $2,813,000,000
4,032,000,000 3, 270,000,000
4, 731,000,000 3, 820,000,000
3, 944, 000, 000 2,971,000,000
3, 861,000,000 3,098, 000, 000
4, 611,000,000 3,904,000,000
5, 623,000,000 4, 957,000,000
10, 410,000,000 7, 686,000,000
11, 400,000,000 7, 233,000,000
11, 604,000,000 7,612,000,000
2, 100,000,000 1,550,000,000

$694,000,000
762,000,000
911,000,000
973,000,000
763, 000.000
707,000,000
474.000.000
422,000,000

894, 000.000
2,111,000,000

550,000,000

$192,000,000 2. 302,000,000 3, 283,000,000 1, 881,000,000

300,000,000

Percent

ii

1939
1940
1941
1942
1913
1944.
1945
1946
1947
1948
1949, first quarter.

!!!

Percent

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Percent

80.2 81. 1 80.7 75.3 80.2 84. 7 88.4 73.7 63. 4 65.4 64.6

Percent

19.8 18.9 19.3 24. 7 19.8 15.3 8.4 4.1

7.8 18. 4 22.9

.

3. 2 22. 2 28.8 16.2 12.5

1 Total volume of mortgage recordings reported by the Home Loan Bank Board covering recordings on 1.to 4-family homes under $20,000 in amount.

2 Mortgage loans insured on 1- to 4-family homes including title I (small home construction) title II (203) and title VI (603). Housing and Home Financing Agency, Housing Statistics Year Book, 1948, p. 120 for (203) and (603) and F. R. Bulletin, April 1948, p. 413, for title I, small home construction.

For the years, 1945-48, Housing Statistics, monthly. Housing and Home Finance Agency. 3 Reports of Veterans Administration covering GI loans closed. NOTE.- First quarter 1949, partially estimated.

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1

Financing of new small homes completed for sale, 1947

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Number of houses built in England and Wales by local authorities and private

enterprise, with and without subsidy

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1929.
1930.
1931.
1932
1933
1934.
1935
1936
1937
1938.
1939.
1940, complete cession of building
1941
1942

? 23, 800 67, 546 69, 220 66, 439 63, 850 60, 332 64, 740 90, 086 125, 368 128, 418 142, 012 207, 869 286, 374 271, 389

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1943.

1944. 1945. 1946 1947

3 142, 375

101, 888
135, 272

893 40, 487 (?)

* Estimated for period Apr. 1, 1919 to Sept. 30, 1922.
? For 6 months only.
• Under construction in 1946.

Source: 1920–36, Fisher, E. M., and Ratcliff, R. V., European Housing Policy and Practice, FHA, Wash. ington, 1936, p. 14.

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