Evening star. [volume] (Washington, D.C.) 1854-1972, 1923-06-23
z FACTORS DECIDE
AMOUNT Of RENT
Scarcity and Cost of Building
!. Determine Price to
Is Tenants.

For the man who rents his home,
a study just made of the effect of the
housing shortage on rental prices
discloses some unusually interesting
Information. The work was done by
the Associated General Contractors.
which assembled its data from a num-
Der of different sources.
Two main causes enter into the
price of rentals. The first is the gen.
eral cost of construction OF homes or
apartments. and the second is the
general situation regarding shortage
of space 1t is pointed out that in
so far as the price of rents Is due
to high building costs, the renter may
expect no relief for some time to come.
AS it is affected by the housing short
pected as soon as there is more housing
available than there are tenants.
Factors interviewer.
These two factors are closely in
terwoven. The builder erecting an
apartment house today bases his
rents, naturally, on the cost of con-
struction, and assuming that he places
his rents on a basis that will give
him fair return on his investmen
ne is naturally reluctant to cut rent
space than is needed. The man who
is renting, but who plans to build
Tor himself q residence. will pay
higher rental without protest when
he feels he esnnot afford SO to h buld
The relation between building
costs and rentals is shown by the
study. which covers. first, the effect
on house rent of the prevailing scar
city of dwellings, coupled with the
great increase in building costs; sec
ond. the degree to which the housing
shortage has been alleviated through
increased expenditures in building
within recent months; and. third, the
Gently have begun to slow up build
ing.
Prices Up 100 Per Cent.
Latest figures on building prices. as
given out by government agencies,
show that building materials are
more than lug per cent higher than
in 1913.
Rental prices for the country gen.
orally had risen in the same period
40 per cent, an increase over the
same time last year of per cent.
Naturally rents are affected by many
circumstances such as long-term con-
tracts, established customs and legis-
lative action. And thus rental fiuc-
tuations are never as sharply defined
as are building costs. However, in
the period since 1913 rental prices
nave sumo SleduliS UPWARD, WIN the
exception that they fell slightly in
1921 and again in 1922, moving down
in the summer and up in the fall.
The price of rents today is just
about where it was in the early
spring of 1921, while building prices,
after reaching a peak in the spring
of 1920, have declined sharply only
to start rising again this spring.
Two Years Behind.
The degree to which the housing
shortage has been alleviated. as
shown in the study. is given as suf-
f1cient to put the housing needed by
the country at present at more than
two years behind. Contracts awarded
on all construction projects in the
first four months of 1922 totaled
more than S990,000.000, and in 1923
more than s1.13S. 100000, an increase
of about Is per cent. This enormous
increase in building work is given
as the chief cause for increased ma
terial costs this year. Contracts
for residential building awarded in
twenty-seven northeastern states dur
ing the first four months of the year
amounted to $4,000, as against $4,000
last year in the same period.
The fundamental causes of the in
crease in building costs is given in
the study, due to the general increase
in prices of all kinds, control of out
put and distribution of commodities
used in building and curtailment of
production in central Europe