Evening star., 1934-04-21
HIGH COSTS DELAY
BUILDING ADVANCE
OverbuiIt Condition Is Re-
veaIed Not Only
Obstacle.

That causes other than an over
built condition, are to large extent
responsible for the stagnation in the
residential construction in dust tr y
throughout the country, and that a
major obstacle to more rapid recovery
Is the failure of building costs to de-
cline to the point where investment
In residential building will yield a
reasonable return, is indicated by the
results of a survey just completed by
c. w. Young and Co., New York in
vestment managers.
There are already definite evidences
OF an increased demand for housing
facilities In a number of localities,
the survey determined.
The survey was based on replies to
q QUESTIONABLE received from repre-
sentative bankers, real estate opera
tors, building contractors and loan
organizations located in 200 communi-
ties throughout the country, including
rural sections as we'll as the larger
business and industrial centers.
Twenty per cent of the replies re-
ported recent tendency for rents
to rise. Another indication of po-
tential increased demand for housing
was seen in the frequent statement
by correspondents that many families
have been forced by economic pres
sure to double up" in one-family
houses or apartments.
Overbuilt Condition Shown.
Approximately so per cent of the
replies indicate an overbuilt condition,
this condition being most serious in
the larger cities and grading steadily
downward to the smaller communities
where in a number of instances an
actual shortage of adequate housing
was reported. The sections reported
most affected by an overbuilt condi-
tlon are the North and Middle At
lantic States, the Southern States and
the Pacific Coast. A more nearly bal
anced condition exists in New Eng
land, the Middle Western States and
the Rocky Mountain section.
One important obstacle in the way
OF increased residential building. re-
ported by number of correspondents,
in addition to their answers to the
questions asked, is the stand taken
by labor in the building trades against
concessions in wage schedules, despite
widespread unemployment. Since be-
tween so and so per cent of the cost
OF residential construction ordinarily
goes to labor, and prices of building
materials are only little under the
1929 highs, it is evident, according to
an analysis of the replies, why the
building Of rental properties has lost
attractlveneSs and why unprofitable-
ness as an investment was the princi-
pal reason given for the stagnant
state of residential construction.
100000 Involved in Building
Commenting on the results of the
survey. a statement by C. w. Young
and Co. said:
"A stimulation in construction
would probably do more toward re-
heVlng unemployment than almost
any other industrial activity. In the
decade ending in 1880 approximately
100000 men, or about one-siXth OF
the normal working force of the coun-
try, were either engaged directly in
building trades or were in some de-
gree dependent upon the building
industry for their employment in
factories, transportation work or other
services. The value of new construc-
ton work in each of the five years
ending in 1929 was over $4,000 ,OOO,-
600, and the average about 5000 ,OOO,-
600 annually. The value of new
construction in 1882 and 1888 was a
little in excess of S1,000,00O 900, or
only about one-siXth of the average
for the more prosperous period.
THE Government allotment of
approximately $4,000 100000 for pub
lie works, while exceedingly helpful.
Is admittedly an emergency measure,
and, with the public debt rising by
leaps and bounds. the Government
cannot long continue making appro-
priations of this character. Govern
mental encouragement of sIum clear
ance and moGel tenement projects
should also prove helpful, but sluln
clearance projects, while infinitely
Desirable socially, usually call for a
degree of private philanthropy which
Is not now available to an extent that
would materially aid the residential
construction industry.
Viewed solely from an economic
standpoint, permanent improvement
in residential construction can be ex-
pected only when prospective homo
owners, builders, and real estate
operators have better assurance that
residential building investments will
be reasonably profitable. Progress
toward this goal would be accelerated
by a reduction in building costs, in
Guiding both labor and materials. and
by a more general improvement in
business which will increase purchas-
ing power and enable many families,
now necessarily living under unde-
sirable conditions, to move into more