Evening star., 1934-11-17
BY PETER GRIMM,

/ housing program.
vN NORMAL times the people OF
the United States spend more
money each year for shelter than
/ any other single thing except
food.
In 1880 the homes of the country
stood we're valued at S295 ,0O0, 900 900,
or 46 per cent of our total wealth.
The building industry is normally
the second largest in the United
States, involving expenditures of more
than $4,000, 100000 a year in pros
porous times.
These facts clearly indicate:
l. That the homes in which our
people live and the land on which
of our national wealth.
2. That permanent prosperity de-
| pends to very great degree on the
amount of money spent each year to
construct and repair homes and busi-
ness buildings.
Almost at Standstill.
Is it any wonder then that the
Federal Government is vitality con-
cerned because expenditures for home
construction and repair have fallen
off 80 per cent, as compared with
pre-depression days? Private build
ing activities are almost at a stand
still. Nearly 100000 of the 1000 900
families on the relief rolls formerly
made their living in the building
trades and allied industries. Yet,
while hundreds of thousands of build
ing workers trudge the streets looking
for jobs. more than 10000 build
ings in the United States need re-
pairing and countless others should
be torn down and replaced by mod
ern, sanitary structures.
The owners of most such buildings
want to repair or replace them. The
| unemployed workers want jobs Our
citizens want better and more at
tractive homes.
But during the last five years few
in our midst have had the money
to keep their homes in proper repair,
let alone build new ones. Due to
the decline in all lines of business.
the reduced incomes of millions of
citizens and uncertainty as to the
future. banks and other lending
agencies have hesitated to lend money
for building work What little money
has been available has usually been
at interest rates far in excess of what
the average home-owner could pay.
Thus the total volume of building
construction in the United States
today is about one-third of what it
was IN 1929. Few new structures are
going up and repairs are but a frac-
ton of what they should be. AS
thousands of homes and apartments
have been allowed to run down, their
value has steadily decreased. In
countless instances today neglected
dwellings have little or no sale value
Unless quickly repaired, there will
be no market for them, even when
conditions improve.
The Federal Government is awake
to the seriousness of the situation.
That is why the last session of Con-
gress passed the national housing act
creating a Federal Housing Admin
lstration whose activities are extend
ing into every city, town and hamlet.
Upon its effectiveness may largely de-
pend the rapidity and permanency of
our business recovery Like others
OF our Governments recovery agencies.
however, it can succeed only # home
owners and lending institutions avail
themselves of its facilities. That they
cannot do unless they clearly under
stand its purposes and its methods.
Three Questions.
Answers to at least three questions
are essential to sucn an under
standing:
First, what is the purpose of the
national housing act?
Second, what effect will it Lave en-
business?
Third, how is money for repairs OBJ
tanned?
We shall consider each of these
questions.
The acts basic aim is TO hasten re-
covery by putting unemployed workers
in the building and allied industries
back to work. 1t is doing that by en-
abllng home owners to make needed
improvements to their property and
by encouraging the construction of
new buildings. Both will provide Jobs
and increase the demand for building
materials.
The act makes repairs and new
building possible by making it es sier
for citizens to borrow funds for such
work. The Housing Administration
estimates that the collntry's banks
and other lending agen c.eS can easily
lend $4,000 100000 to home owners ior
repairs and improvements. Most of
that sum has been lying idle in our
banks because they have not felt safe
in lending depositors' money for home
improvements or construction without
more security than most citizens are
in position to provide.
Under the housing act. the desired
security is provided. Banks and other
lending bodies are insured up to 20
per cent against any losses that might
result on loans for repairs, alterations
| and improvements on homes and busi-
( ness buildings. This means hat if a
! bank makes loans totaling 100000 for
! such work, the Federal Government
| will make good any losses up to $20,-
! 600. Banks can now make improve
ment loans without risk, for the 20
! per cent guaranty affords ample lTo-
lection. Even in the worst years of
the depression. losses on similar loans
did not exceed 8 per cent. The
housing act actually encourages banks
to offer money for home repairs by
making it good business for them to
do so.
Shortage in Homes.
The act will operate in much the
same manner in stimulating new
building. Banks offering mortgages
under the act will be adequately in
sured against loss. The maximum in