Montana labor news., 1936-09-03

it is significant that the industry
still depends to a large extent on
public funds. In normal times pub
lie construction is only n quarter
of all construction, today it is more
than half (51 per cent?; private
building today is only 20 per cent
of its 1929 value, public construc-
ton rs percent of 1929.
The public construction being
done today includes bodybuilding
Ga larger volume than normaD,
flood control, schools, Libraries, city
halls, water works, sewers and the
like, financed either through PWA
or other public funds, and housing
projects providing some $4,000
homes. In looking forward to the
future we may well consider
whether public building should not
permanently play a large part in
our national building program and
whether it should not include the
building of low cost homes which
would not be profitable for private
enterprise. We will consider first
the outlook for private building,
next, the present housing shortage
and the function Of public building
in remedying it.
Building Outlook. Private build
ing in the last two decades has been
subject to very great changes from
boom to depression and back to
boom. During the war, building
practically ceased, leaving the ma
ton in 1920 with an acute building
shortage. Then began a boom pc
Rod when in its efforts to make up
the shortage, building construction
exceeded all previous records. This
lasted through the nineteen TWEEN
ties, reaching a peak in 1928. Dur
ing the present depression, private
building has again dropped to all
most nothing, leaving the country
today with an acute housing short
age. Now that the industry is
again on the upward road, with a
shortage to make up, we may ex-
pect another period Of high build
ing activity.
What causes these great up and
down swings of the building indus
try? The answer is simple: The
relation between the cost of build
ing a house and the price or rent
which it will bring on the market.
In the boom of the twenties the de-
mand for housing was so great that
prices and rents were high com
pared to building costs; construc-
ton was profitable. During depres-
sion incomes were low, rents were
forced down because families were
constantly moving into cheaper
quarters and "doubling-up, values
of houses were forced down be-
cause so many homes were being
sold out to pay for defaulted mort
cages and few could afford to buy
them. Commercial building did not
pay and few families had enough
sure income to build homes of their
own. Consequently, private build
ing almost ceased and men were
thrown out of work by the million.
Since 1888, several factors have
changed this situation. First, work
ers' incomes have increased, families
are "undoubling"-seeking homes
of their own, couples who had post
poned marriage during depression
are now creating homes, families
are moving into better quarters.
This raises rents: rents in June,
1886, were % per cent above the
1888 average. Z.
Secondly, the Home Owners
Loan Corporation, saved more than
a million mortgaged homes from
foreclosure, preventing these prop
critics from being thrown on the
market to reduce real estate values.
Thus, some $1,000, 600, 900 worth of
mortgages, which had originally
been granted and were being fore
closed by banks, insurance compa-