Evening star., 1934-06-02
URGES PASSAGE
OF HOUSING ACT
President Potter of Real Es.
tate Boards Association
Points to Stability Need.

Passage of President Roosevelt S
proposed national housing act was
strongly urged on Congress by Hugh
Potter, president of the National As
sociation of Real Estate Boards, in f
hearing before the House Committee
on Banking and Currency this week.
Representing more than half the
real estate industry, he stressed the
importance of action at the present
session to stabilize home mortgage
financing and open the way for re-
turn of private capital into normal
support of sound home building ana
ownership.
The association has suggested to the
committees of the House and Senate
two proposed amendments intended to
insure more immediate effectiveness
for the act.
Speaking for the association, Wal
ter S. Schmidt of Cincinnati chairman
of its Mortgage Finance Committee,
submitted for insertion i'll the bill
new title, which would not disturb any
other provision of the bill, but would
provide for setting up. in addition,
mortgage discount corporation.
Authority of Purchase.
This corporation would be author
ized to purchase from banks, trust
companies, mortgage companies, in
surance companies, building and loan
associations. and other like agencies,
1ta,of
improved urban real estate, other than
owner occupied homes, under condl-
tions which would safeguard such dis
count operations.
Appearing also for the association.
Edward A. MacDougall. New York,
chairman of its Housing Committee,
suggested that the words owner -occu-
pied" be eliminated from the bill. The
suggested amendment would make
home mortgages eligible to the bene-
fits of the act in those numerous pres
ent cases where nome owners have
had TO rent out their homes tempo
rarily TO obtain sufficient income with
which to maintain their holdings. MI.
MacDougall held that the home SELL
ing of the future must be of the type
the bill would encourage. They must
he ,lpon a basis of one mortgage, a
first mortgage, running for at least
10 or Is years. and at rate OF IN
terest comparable with interest rates
generally throughout the country, not
left to the arbitrary control of bank
inr centers or of small local groups,
he said.
A subcommittee of the Senate Bank
ing Committee. headed by Senator
Robert G.. Bulkley. Ohio. has been
sppointed to consider amendments
proposed and their incorporation in
the bill.
Capital goods cannot be created
out of income, but must be created
through the pledging of the future,
in some measure" Mr. Schmidt said
at the Senate hearings. Capital is
not being placed in investments today
Through fear, it is being held in as
LIQUID a form as people can hold it
The proposed mortgage discount cor
poration, by meeting this situation,
would go far to insure putting the
whole purpose of the housing act into
immediate operation.
Restoring Of Facilities.
"In my Judgment large percentage
of the total sums formerly held for
mortgage investment has permanently
disappeared. and the only way to re-
store sound, long-term credit facili-
ties and reduce the rate to borrowers
is for the Government to throw the
weight of its credit behind the mort
gage structure, not as taker OF mort
cages, but as supporter and protec-
tor of the investment itself"
The association, Mr.. Schmidt said
IS in full sympathy with the objects
sought by the bill. The proposed ad-
ditional provision for a mortgage dis
count corporation is urged in order
to make the whole bill more effective
and to provide the certain and i'm
mediate assurance of accomplishing
Its objects.
LAS a factor in recovery, repair OF
existing properties will not equal. even
In small measure. the amount OF
money that could soundly be expended
even at this time for new construc-
ton" Mr.. Schmidt stated. The need
is especially felt in residential con-
struction, where the vacancy existing
is approximately or 4 per cent. Pres
ent vacancies range from 3 to per
cent, the vacancies resulting largely
from the doubling up of families
which under improved conditions will
unscramble themselves.
The unscrambling process. in fact
is here now. Vacancies during the
past year have decreased by some Is
per cent, according to surveys from
different cities of the country. There
will presently be great need for new
construction. The need is actually
about equal as between residential
and other types of STRUCTURES"
The Ohio Association of Real Es-
tate Boards and the California Real
Estate Association appeared before
the Senate Committee warmly sup
porting the bill.
Any opposition to the bill based on
opposition to lower interest rates
should be closely scrutinized. E. Avery
Mccarthy, chairman of the Finance
and Mortgage Committee of the Los
Angeles Realty Board. representing
the California association, said.