Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1921-11-25
FOR SALE.

AA0OoI0 o<21%G.
One Of the problems with which the new stat.
administration will be called on to deal is that of
disposing of some dozens of houses which the state
will have on it's hands as a result of the peculiar
operations of the Home Building association, a sub
|sidiary of the Industrial commission. which consist
ed of Mcssrs. Frazier, Lemke and Hagan.
+ The Home Builders law provided that the asso.
citation, operating as an agency OF the state, should
buy or build for individuals such homes as might
be desired, under certain prescribed conditions and
limitations. The city homes thus to be provided
were not to cost more than S., 900, and the sub
stance of the arrangement; was. that the property
should be transferred to the individual upon the pay
rlent by him Of an amount sufficient to reduce the
states investment therein to not more than so per
cent of the value Of the property, and i'll no case
more than 81. 900.
When the plan is stripped Of all it's con1plica-
tons it amounts to this: That the state may loan
to the individual up to so per cent Of the value Of
a residence; that the total value Of such residence
interest of the loan shall be paid in monthly install
rnents extended over a long period. This is sub
%stantially the plan on which the private building and
loan association operates. The difference between
the states plan and that of the private mutual asso-
citation is that the state may actually buy or build
and then transfer, whereas the private association
docs not usually go through this form, and that the
advertisement perid In the private association is
usually shorter than that provided in the state plan.
These differences arc customary, but not essential.
The state under it's plan bought or built some
60 houses. Some of these, notably those of William
Lemke and George Totten, in Fargo, far exceed the
cost limit provided in the law, and these transac-
tons constitute direct violations of the law, which
was represented to be intended to aid the man of
small means, and not the man who could afford to
own a mansion, Before undertaking the erection Of
any Of these buildings plans were prepared and esti-
mates Of cost made and agreed upon. Buildings
were completed and occupied, byt in many cases no
actual contracts were made with the prospective
owners. Presently it became evident that the actu-
al cost was exceeding the estimates, and in individ-
ual cases that excess has run as high as 10 per cent.
The man who expected to have a house built for
So. 900, on which he would borrow S $4,000, finds that
the cost will be S 1000 or more. He cannot borrow
more than $4,000. He has not the money to pay the
difference, and he may not wish to assume the own
ership OF such an expensive property in any case.
He is not bound to accept the property, because he
has signed no contract. He is likely to follow the
illustrious example of former Commissioners Hagan,
one of the three men responsible for the manage
rlent Of this business, who. when confronted with
the evidence of the incapacjtv of his own bureau,
moved out Of the house which had been built for
him, leaving the property on the states hands.
There is no reason why an individual should
complete a transaction which varies SO essentially
from that INTO which he supposed he was entering.
In addition to the. fact that the cost of these build
ings SO greatly exceeds the estimates, there is the
tact that this excess is not represented by actual
value. If it were, the state might find purchasers
for its property and come out whole. But a large
part Of that excess represents the cost of waste and
,nisrnanagenent. and no individual is going to pay
for that. The prospect is that the state will present
1y have for sale a lot of houses whose. market,value
is not more than 60 per cent of the cost to the state.
IN that case the state will have a rather tidy sum to
add to its charges for experience under the late ad-
lnilistration.