Evening star., 1934-01-20
AID TO REAL ESTATE.
SEEN IN INVENTORY.
Federal Official Cites Sta
biHzing Benefits In Florida
Address.
Continued From First Page.)

(COntmueo FROM F1lSC faSe.l
price and the second is the financial
mechanism The significant price in
the real property field is rents. Pre-
sumably, when construction activity is
excessive, rents fall and discourage
further building. Likewise, when
shortage develops, rents advance and
stimulate building activity. In this
simple way equilibrium is theoretically
achieved.
This theory may work in the long
run, but 1t fails miserably to achieve
any short-run stabilization. Rents are
notoriously slow to react to outside in
f1uences. Furthermore, the period re-
uuired to complete new buildings Is SO
long that it is possible for an excess to
be in process Of construction before the
controls begin to operate. More lmpor-
of any one year Is but small fraction
OF the total supply Of buildings In ex-
istence.
Surplus Influences Rents.
''Rents are influenced, however, by
the total of facilities available, ConSe-
quently, wide swings In construction
have only slow effect upon the rental
situation. Also should be noted the
fact that a surplus cannot be removed.
but persists in its influence for long
periods of time Finally. there Is the
fact that we are not dealing with a
standardized product, but one in which
changes in style, shifts in taxation, or
the development of blghted areas can
change the total picture very rapidly.
I am citing all these conditions SO IA
milisr to all OF you as a basis for my
argument that we must know much
more than we do today about real
estate if we wish to eliminate these
wild fluctuations of activity in the field
OF new construction.
Likewise, the field Of finance has
not always been factor making for
stability and regularity. Construction
activity, on any considerable scale. re-
quires credit. But credit Is a general
term for loans made for many different
purposes. Conditions quite apart from
the real estate situation may affect the
credit market and in turn influence the
behavior of construction. Through
proper financial controls, 1t would be
possible greatly to influence the extent
of construction. But there has never
been any serious attempt to use this
control for the purpose Of evening out
the wide fluctuations in activity in the
building field"
Working on Dwelling Study.
Thorp said his organization now is
working on the possibility of making
an intensive study of limited sample
of dwellings with regard to the fnan-
cial structure underlying real estate
properties.
The speaker referred to the prac-
tice of speculative building as not
healthy condition"
Buildings ought not to be specu-
lative" he said. They should come
into a market which needs them and
where there is reasonable certainty"
He pledged the cooperation of the
Government in any program looking
toward balancing supply and demand
in real estate. He said there ought to
be frequent surveys Of vacancies in
each city, so tabulated that the ma
dwelling and rental groups, is at once
apparent.
Survey is Under Way.
The survey now under way, Thorp
explained, is intended to gather data
for every housing facility in each city
covered
First" he said, "are general de-
scriptive data concerning each Struc-
number of stories and number of
rooms, and its physical condition. For
the last item We are using four cate
gorieS-good condition, needs minor
repairs, needs structural repairs, and
not fit for use.
Second, are the items relating to
improvements and facilities available,
covering such items as type of heating,
uses of electricity and gas. water closets
and baths, mechanical refrigeration,
and the like.
Third, are the items pertaining to
occupancy and vacancy, including a
record of extra families and material
for computing density; j. e., the number
OF persons per room. OF course, this
includes data on ownership or rental
In order to determine the turnover rate,
we are asking each occupant when he
moved in, and in the case of vacancies
how long it has been vacant.
Fourth, is the item of rents, includ-
ing data on concessions or facilities
provided by the landlord. This will
give us one indicator Of the quality of
the vacancies in the various cities.
Fifth, are certain miscellaneous
items of use primarily for other
branches of the Government, the num-
Der of automobiles if any, the time
required and methods used of getting to
work, and the question of whether or
den last year
Each unit will be described on one
line on the schedule, so that it will
be possible to bring together any of
these items which appear to have a
significant relationship