The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-02-08

Of articles on housing conditions in this
country II Is published by permission of
Fortune Magazine.
In preceding articles a sharp and
vivid picture Of housing conditions
in this country has been drawn. A
question that logically occurs to the
reader, and one that should be an
swered, is what is to be done about
It?
The housing problem is, in part,
a social problem, and must wait
for its solution until the social con-
science has been so thoroughly out
ragged that action will be taken.
However. the problem is industrial
as well as social In that aspect
it is, If less familiar, equally press
ing. Housing is the one field where
private enterprise and individual
initiative have VIGOROUSLY failed.
Builders Are Blamed
The social enthusiast, faced with
the collapse Of cheap housing in
America and the failure of Ameri-
can builders to do anything about
it, might be inspired to blanket
indictment of the building indus
try.
He might declare that when an
industry dealing in a fundamental
commodity for which there is a
constant real demand confesses that
it is unable to supply any part of
the market but the richest third,
and that the other two-thirds must
satisfy themselves with a second
hand, resold product even though
that product is in such condition
as to endanger the health of the
buyer and his wife and his children
it admits industrial bankruptcy.
When it adds that it is suffering
from over production within the
limits of the market it has been able
to reach, it confesses intellectual
bankruptcy as well.
If such a situation, our enthusiast
might argue, existed in the automo-
bile industry-if, for example, no
car sold for less than $1,000 and
two-thirds of the population were
unable to buy-the fact would be
serious enough.
Prices Are High
But people can live without cars.
And broken-doWn cars do not breed
tubercle bacilli and idiots and gang
sters and social unrest. 1t is when
such a failure takes place in the
building industry that the entire
community is. or should be, aroused.
What has happened in the mar
ket for American housing may be
described as follows: One-third OF
American families have incomes not
to exceed $1,000; one-thlrd nave
incomes from 81 200 to $4,000; one
third have incomes above $4,000. 1t
is a proven rule that no family
should attempt to buy a house cost
ing more than twice its annual in
come, and that no family OF limited
income should pay more than ~
per cent of it's income in rent.
Families in the lowest third,
therefore. can not buy houses cost
ing more than $4,000 nor pay more
than $240 a year in rent. Families
in the middle third can not ouy
houses costing more than S4,OOO
nor pay more than $4O0 year IN
rent. But the average cost OF SIN
ple-familv dwellings built in eighty
five American cities in 1929 was
Sd 902 exclusive of land, and the
selling price of these same dwell
ings was certainly 80 per cent
higher.
Market Limited
This was average cost. The low
nrice for a single family dwelling
with the land under it in built
IN dstirtc ii. e., district such as
the average industrial worker must
inhabit) was probably not much I'M
der $4,000
That means neither the lowest
third nor the middle third OF Amer
lean incomes could buy it or rent 1t.
What this means in terms OF living
was shown above. What it meant to
the building industry is roughly
/. The industry depends on the
richest third of the population for
its market and has sold that mar
ket.
2. The industry has failed to reach
a market which, exclusive OF fam
lilies living on farms, amounts to
ID 500 900 or 100000 families.
8. If the industry could build
good house to sell at $4,000, 1t would
add 60 per cent to its small-house
sales in it's present market.
4. If the industry could build
GOOD house to sell at $500, it would
double its postwar residential out
put. which in normal years has
amounted to $3,000,000,000, and in
wade the new market.
What all this means to industry
as a whole will be evident when the
key position of the building trades
is realized. The building industry
is the market for the major part
of the nations output of lumber,
stone, brick, paper, paint and glass.
1t is the second largest purchaser
of steel. 1t creates an almost i'm
mediate demand for furniture, car
pets, furnaces, household goods, etc.
The End