The Washington herald., 1922-04-02
ECONOMIC FORCES
help In SOLUTION
OF HOUSING IN U.
Sa Us Elimination of
Slums Is Big Problem
On To Realtors.
GIVES FAIR RENTAL
Warns Profession Against
Any Government Plan
~ For Housing.
By HENRY n. BRIGHAM.

By HENRY II. BRIGHAM.
Hartman of the Housing Commit
tee OF the National Association of
Real Estate Boards.
When one speaks of the housing
situation" today one thinks Of the
shortage OF houses, high costs Of
building, rising rentals, and protests
Of tenants and OF would-be home
owners The business depression of
the nast year has very materially
helped this situation in many ways
was interesting to note the psyche
logical effect Of fall of income on
rebef1tous tenants. While they were
earning higher wages than ever be-
fore. they were strongly opposing any
rise in rent and demanding more and
more from landlords. but when their
wages fell many were glad to be
able to keep roofs over their heads,
and their attitude became more
reasonable.
Likewise most landlords. realizing
The fall in purchasing power. stopped
raising rents and, as landlords have
always done, often carried their ten
ants who lost their jobs many months
without rent. The depression also re-
putting in the fail Of prices OF build
ng materials and labor has helped
building industry which promises 10
Increase rapidly with a little return
TO better business conditions.
Faee Better Housing Problem.
This means that the housing
situation" is being adjusted and cared
for by economic forces. and IL kept
under control will doubtless be for
gotten in its present phase within a
few years As this situation does ad-
Just Itself. however. the old problem
of better housing or decent housing
for all persons will come again to
the front and realtors must be
ready to face it and to take the
lead7in all progressive measures to
improve housing conditions.
The elimination OF slums and bad
housing conditions Is of vital interest
to realtors and. although they may
consider ideal conditions unattainable.
still II they fail to show the way to
better conditions to the greatest pos
sible extent. persons less better quail
led will try 10 do so and the way
may, be rough an Uncomfortable.
(, Rental, Legislation.
The report of the Department of
Labor shows that rents in New York
\City ron January /. 1922. were only
Buffalo they were 61.7 per cent
CHER. and the Conference Board
cpoFts them about So per cent
Yhigher in the country In general.
f rents had been allowed to rise
New York as they have else
where there would doubtless have
been just a.. much building without
he tax exemption and with far
Ereater Justice to all. This New
York situation raises the question
whether realtors ought not to take
stand on rent legislation and
pm the question OF what is a fair
rental.
tits very questionable whether the
courts should be given such general
bower to determine what rentals
FhoPd be, particularly since you
may be sure that they can never be
INVOKED to force tenants to pay
higher rentals when market values
30 fall as to give landlords less
than a fair return on their Invest
nents, but so long as they have
the power to determine fair rentals
realtors should be active in see
ng that it is done on a right basis
Eight to Ten Per Cent.
For instance, to say that a fair
rental should be based on the cost
Of a piece OF property regardless Of
when purchased is absolutely un-
fair and yet il is the basis Of most
OF the tenants complains. Likewise
20 Ay that it should be based on a
fIirS interest return on the owners
equity is thoroughly unsound. II
Ifair, rentals are to be based in part
upon the values of the properties
rented. they must be based upon
the current market values regard
less, of encumbranCes, and those
current values must be determined
upOh all the facts that any expert
rCaltOr considers IN determining
values.
What a ma aximum fair net income
on the property should be might
Well vary with varying market in
tcreft rates. but surely s to 10 per
cCng should not be considered as
excessive this last year. particu-
larly when re consider that many
Uf Che most strenuous ObJectors
coud doubtless buy the properties
they arc renting but refuse to take
the risk Of depreciation that they
| expect others to take. They should
therefore be willing to pay for this
risk, and to recognize that the av-
ersae income over a period OF wears
will, doubtless be much less than
they would accept on their invest
ments.
III would be well for realtors to
consider whether it will not decide
upoA the best method of determin-
ing fair rentals and help such cities
las Sew York in obtaining the use
Of u lch a method.
The danger Of governmental or
municipal housing seems to have
neaily passed. although. as said he
fors we must still be on our guard.
Thei Fundamental difficulty with
govtrnmental or municipal housing
is that no method has yet been de-
vised to avoid the waste and in
justice that inevitably results un-
der bur democratic form of govern
menf.
Tie government housing plans In
England have collapsed with such
a tHud and with such vivid evil
dences Of the absolute folly of the
plans that one would think that no
intelligent man could advocate any
government housing plans. but II
we do not keep the situation under
control and IL we are not able by
sound economic and just means to
improve the housing situation, we
are still liable to an attempt to
force at least some form Of gov
ernTpent building or subsidy.
We must remember also that the