Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1918-06-18
THE READERS, VIEWPOINT
WHY Housebuilding Has Stopped

TO the Editor Of the Euentng Public Ledger:
sir-1 desire to refer to your editorial
to why house building has stopped This is
not difficult to understand for those who
have devoted years to this line Of business.
AS you state, during the last twenty years
1900 new homes have been built each year
and the entire work was standardized; that
1t nothing unusual or difficult for
builder to undertake an operation of from
100 to 500 two-story, porch front dwellings
and finish them within year without any
difficulty, which neither necessitated any rag
raising at the commencement nor required
any medals at completion. as II simply meant
application and business integrity, together
with the necessary trust company willing to
make a 20 per cent loan on first mortgages
which were 60 per cent of the fair or antici-
pated value of the houses .'f
This temporary loan furnished about one
half of the cash required and the balance
of the cost was carried by the various ma
teral houses. The trust company loan being
only temporary, it was necessary to make
a sale Of the mortgage to realize the 80 per
cent equity, as at the start there no
apparent value and the mortgage could not
be sold until the houses had assumed a real
value.
The reason why house building has stopped
is largely through the fact that the trust
companies not in "a position TO make the
customary loans, and the building supply
houses are not in position to procure ma
tertals for the properties on account of the
unusual high cost of the same, and, there
fore, are not in position to furnish their
bond to the trust company, guaranteeing the
fulflment of furnishing materials and labor
necessary
Prior to the disturbance caused by the
such operations usual and were
carried by the trust companie and supply
houses the latter being paid for their material
after the houses had been built and either
sold or refnanced through the sale of a sec
ond mortgage. which enabled the builder to
meet his oblga tions who would, temporarily,
owe large sums of money to these material
men, which would be represented by promis.
sorry notes
This plan has been practical and our city
of Homes is the result: but at this time
money is not being loaned such mort
cages. as the risks are too great, and the
material houses we'll will not extend the
necessary credit furnish their bond to
the trust company, largely on account of the
fact that the Government has placed an EN-
barge shipments, excepting strictly Gov
ernment work, and the lumber yards in our
city have been virtually emptied of house
building sizes through the many lines for war
activities. II requires about twenty-five va
rious lines Of building materials in the build
ing of home and all are confronted with
the same task of buying. procuring and han
ding material not to mention the fact that
the Government is not very apt to allow
private building enterprises when il is going
to have its serious difficulties in the
erection of house-buidng projects, partcu-
arly a Hog Island. where the work is
progressing extremely slow owing to the
unnatural conditions of unrest caused by the
war.
! would suggest for the betterment of the
trade that it might be productive Of good
results to have this question as to why house
building has stopped thoroughly Investigated.
as concerns which have for many years been
doing large business now find their trade
very much restricted to Government work.
WILLIAM r. NICHOLSON, JR. E
Philadelphia. June lG