Evening star., 1935-05-04
URBAN RENT BILL
$240,0DO,0|)D MORE
Building and Loan League
Committee Estimates
1885 Increase.

American urban families are going
TO pay about $240,000,00 more house
rent in 1885 than they did two years
ago, it is estimated by the Home
Building and Home Owning Commit
tee of the United States Building and
Loan League. Unless a conspicuous
move toward home ownership takes
place this Spring and Summer, the
renters will find themselves paying an
aggregate of around $3,731 100000 for
leased shelter this year, according to
L. w. Pellett, Newburg, N. Y, chair
Mr.. Pellets estimate is based on
probable conservative rise in rents for
the rest of the year, in accordance
with the monthly rise noted since
the uptrend began year ago. Re-
cent exhaustive studies on outgo of
family funds for city rentals showed
$4,550 900 900 to be the estimated ex-
penditure in 1881, and 1885 is ex-
pected to rise to about 50 per cent of
that figure, Mr.. Pellet pointed out.
Home Purchase Alternative.
'The logical way for the renters
to circumvent the added outlay for
shelter is for them to buy homes" he
said Census figures show that in
1880, So per cent of the renting fam
lilies were living in one-family homes.
The proportion has probably in
creased during the past four years,
since the percentage of one-family
home construction to total new resi-
dental building has been greater
during the slack years than it was
during the time of building expan-
sion. There is a supply of homes for
wner-occupancy on the market at
edge on the renter before the year IS
out and insure him against rising
shelter expenditures in the years just
ahead. The availability of mortgage
credit for home purchases at this
time is seen in the loan advertise
ments and in the public statements
of hundreds of building and loan
association, and is naturally increased
to some degree by the beginning OF
operations under the Federal Hous-
ing Administrations plan of guaran-
teed mortgages. He can buy his
house on the installment plan with
the mortgage money now being
offered.
Not only is 1t sound economics to
buy at the bottom of the real estate
market, but it is also sound to bor-
row money when the price level Is
comparatively low. The indexes OF
wholesale prices still show that prices
In general are only about 80 per cent
of what they were in 1926. AS the
level of prices rises with business re-
covery, the family which borrowed for
its home in the Spring and Summer
of 1885 will find itself paying back its
debt in smaller units of purchasing
power, a situation just as advan-
tageous to the borrower as the fall
in prices was disadvantageous to him
when he had borrowed money at the
peak.
Building Resumption.
"The experience of the renting fam
flies between 1921 and 1925 holds out
no hope for a halt in the rise of
rents because of a substantial re-
sumption Of home building this year
or next. In each of the years 1922,
1923 and 1924, residential building OF
more than $1,0OO,0oO,000 in volume
took place, and during those three
years average rents, according to the
National Industrial Conference Board
index, increased more than 10 per
cent. This experience of 10 to IL
years ago, when America was already
In a house shortage such as we are
approaching today, Is one more in
dication Of the wisdom which lies In
home ownership at the present time.
Such ownership. financed on a sound,
orderly, liquidation basis, remains the
average mans only hedge against
spending larger proportions Of his in
come on shelter for several succeed
ing years."