The New York herald., 1922-03-26
SMALL HOME LOAN
IS NEED OF NATION
Will Put Cheap Housing With
in Reach Of Those Who Can't
Pay Present Rents.
BY WILLIAM M. GREvE.


Vice-President Of tho Prudence-B onds
Corporation.
The class OF dwelling construction
that is being provided to-day and en-
couraged by present legislation is far
out of the reach of the ordinary person
who comprises the bulk OF the popula-
tion of Greater New York.
House shortage" propagandists are
still at large preaching their fallacious
doctrine. Politicians are declaring that
without new legislation there will not be
enough houses to go around. II this
propaganda is not muzzled 1t will result
in an unassimilated over production OF
the very class of housing that is now in
abundant supply. Property owners will
face the danger of rental values SO
shrunken as to practically wipe out their
equity: and this commensurately will
have the effect OF impairing the city
credit for 1t is upon the value OF the
city's real estate that the city's credit
is based.
The fact is. rents have already
dropped considerably and are unques-
tionably on the downward move. Indus
trial building rentals have slumped 70
per cent. and apartments built to rent
for S25 are renting for SIS. Yet people
are still alarmed, they have not walked
up to the humbuggery OF the house
shortage" propaganda. Even with their
present requirements well taken care OF
by leases running into 1923. they are
spending their Saturdays and Sunday
looking around for something to rent 0
to buy against the termination OF their
leases. This, of course. helps out the
theory Of IAN abnormal demand
Mr. Untermyer stated that the pas
sage Of the act allowing life. insurance
companies to erect houses on large
scale will help to reduce rents. or
course it will. So did the tax exemption
law, which did more TO produce build
ings for housing than any legislation we
have had The more the merrfer Tor
the future tenant, but worse for the fu-
ture apartment owner.
Real Shortage in 81 Flats.
The spirit and public interest of the
Metropolitan Life Insurance Company
in offering to build houses on large
scale is most commendable. but the man
who IS able to pay 50 per room can do
this kind OF help and will predict that
II these buildings are erected according
to published plans within two years
they will rent for Sc per room, instead
OF 50.
Up to the present time the only peo-
pie who have benefited by the house
shortage-abnormal-d demand" propagan-
da are builders and Spectators. to say
nothing of politicians. Neither the peo-
a.
city have benefited. while the bulk OF
the population have been hit harder
than ever. 1t is high time that some
thought and consideration should be
given to this phase of the situation.
There can be no profit to the renter nor
to the city when an owner does not re-
ceive n fair return on his investment.
The real house shortage. as ! have
said before. Is in the 81 per room apart
ment and the cheap one and two family
houses. Under this classification new
law tenements built to rent for 50 and
81 per room are now renting for $50 to
$3.50. But there has been no propaganda
for the 81 per room house-no legfsla-
tion-absolutely nothing done. Here Is
where the real danger IS and has been.
But with all the ostentatious concern
nothing has been done to enable a
builder to erect 81 and S per room
houses. which is the real need of the
masses.
If life Insurance companies and trust
companies. fnstc;.d OF risking their
money in a slumping rent market, should
establish and encourage the policy OF
small loans-say in amounts OF from
Si.500 to s3,000-for long periods and
amortlzed monthly, the value OF their
service TO the public would be inestima-
Bile and their investment a gilt edged
one. This would enable the average
man to buy or build his own home, which
no would fight to keep There Is no In
vestment more solid than a mortgage
from a home owner. Tho experience OF
the Title Guarantee and Trust Company
covering many years In placing over
5000 100000 in small loans. proves this
conclusively. This entire investment
Locked less than a hundredth part OF /
per cent Of the stated interest rate.
Nothing could be better than this.
People should Own Their Homes.
The best thing for the community and
the country as a whole. as well as for
the individual. Is for the people to own
their own homes. They could do this in-
stead Of paying 50 per room and owning
nothing. if small loans, as suggested,
were made available.
Even now there are hundreds OF five
room and bath houses being built which
can be bought for $4,000. The top cost
OF these houses is less than 50 per room.
20 be exact. $3.50 1-3 per room per
month. and this will gradually diminish
to the bare cost OF taxes and uplSeep
alone. The investment costs would range
themselves as follows:
Building lot. with proper improvements
IN the street, ....................... .S1,0J0
Construction cost Of the house. c........ ZOO
Building profit on tho house. e........... 500
ipAdA tuaNss...s .@3tu1V
The maximum yearly cost OF this in
vestment when starting 10 reduce 10 the
vanishing point would be $500. dlsbursed
as follows:
6es interest on 81 .00o o....,..............s.i
IbNes. ..s.. ....ssss+ ss..ss.s..s.... wv
~ amortization. ..,......,............. lCO
Total. ..t....s... .....*... ..s........ .SJUo
m