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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.
$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
20 Proportion of total home-mortgage financing done by associations in 1948_
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.
37 Proportion of associations' total lending which has been comprised of GI loans.
22 Proportion of associations' total mortgage portfolio comprised of GI loans as of Dec. 31, 1948_
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_.
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.
13-15 Total reserves, legal and unallocated, to total assets, Dec. 31, 1948
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)
All savings and loan associations and cooperative banks in the United States,
Dec. 31, 1948
12, 576, 000
71, 325, 000
30, 463, 000
23, 702, 000
3. 516, 000
3, 801, 000
11, 770, 000
60, 093, 000
5, 183, 000
100, 844, 000
21, 463, 000
31, 844, 000
457, 775, 000
41, 803, 000
30, 446, 000
25, 248, 000
20, 630, 000
166, 463, 000
52, 351, 000
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
First quarter, 1948
$234,000,000 $413,000,000 $200,000,000 $847,000,000
242,000,000 363, 000, 000 192,000,000 797, 000, 000
200,000,000 278,000,000 188,000,000 665,000,000
1 Estimated for March.
II. VOLUME OF HOME MORTGAGE LOANS CLOSED BY TYPE OF LOAN
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
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
FHA-insured loans ? (1- to 4family homes)
$192,000,000 2. 302,000,000 3, 283,000,000 1, 881,000,000
100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
80.2 81. 1 80.7 75.3 80.2 84. 7 88.4 73.7 63. 4 65.4 64.6
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.
Financing of new small homes completed for sale, 1947
Number of houses built in England and Wales by local authorities and private
enterprise, with and without subsidy
? 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
1944. 1945. 1946 1947
3 142, 375
893 40, 487 (?)
* Estimated for period Apr. 1, 1919 to Sept. 30, 1922.
Source: 1920–36, Fisher, E. M., and Ratcliff, R. V., European Housing Policy and Practice, FHA, Wash. ington, 1936, p. 14.