Evening star., 1937-04-17
CYCLE OF RENTS
D|SCL0SES GAIN
Typical American Home
Averages II Changes
in 20 Years.

A typical American home rented for
the past 20 years has averaged about
IL different rental prices in that
period and the tenant has paid high
rents in more years than he has paid
low rents since 1917, the Home Build
ing and Home Owning Committee OF
the United States Building and Loan
League showed in q bulletin issued to
member associations today.
Seven of the changes in rent costs,
those coming as a rule in 1919, 1920,
1921, 1923, 1924 and again in 1885
and 1887, were upward, whereas only
four Of them, first in 1925 and then
in 1881, 1892 and 1893, were drops.
This the committee deduces from its
study Of rental indexes for the Nation
and more detailed figures for some
specific cities. Taking a particular
house as an example and assuming
that the same family rented it for
the 20 years 1915-1934, the building
and loan fnanciers figure that for the
money paid out in rents, beginning
with $50 month in 1915 and follow
Ing the ups and downs of the market,
the same family could now own a
$4,000 house and lot free of debt after
paying of building and loan mort
gage month by month. They could
have included $500 in repairs and
modernization during the period and
paid estimated taxes and insurance
on the building, all within the sum
paid for rent.
Cycle Of Rise and Fall.
From the standpoint OF the family
choosing between renting and owning
nowadays, the experience Of the past
cycle of rise and fall in costs and
values is of more than academic inter-
est, the committee claims At least
two step-ups in rents on the average
dwelling have taken place in the
course of the new cycle Of activity
and rising cost of living and condi-
tions are not such as to generate the
hope that they will stop there.
Turning to the apartment rents, as
contrasted with the one-family home
rent, the committee finds even greater
likelihood that more and more fire.
lCllp 411SlC WALL NC SldPPCo
on for several years yet. Houses which
are rented out are usually owned by
persons or companies with small
amounts Of real estate holdings, it is
suggested, so that the owners do not
study quite so carefully the problem
Of each deviation in rental demands,
as do the apartment building owners
y,I 10 yr.1o fayr nxytrn
dollars on each apartments rent may
mean the difference between coming
out in the red or in the black that
particular year. Thus, the committee
figures, family living in the same
apartment for the past 20 years will
have experienced considerably more
than II changes in the rental, and
by far a majority of them will be
upward.
The house used by the committee
as an example Of its cost to a rent
ing family and what it would have
cost an owner-occupant family was in
Chicago.
Rental Paid by Family.
Rentals paid by family living in
this small home from 1915 to 1884
(the end of the low-rent part of the
past cycle, starting with $50
month and varying according to the
scale of rent rises and falls which an
academician in the field Of land value
research has worked out for this par
ticular city, were summed up at So
193 The figure is conservative, be-
cause rents are figured from 1925 on,
the year when the leveling of began,
on the basis Of the fact that the house
was more than 10 years old and would
drop down some in class, circum-
stance which would be taken ad-
vantage Of by the tenant. The family
paid as low as s23 month by 1888,
as compared with high of $58.75 q
month in 1924, the year Of the last
rise.
Then the committee turns to the
proposition of family which bought
this house in 1915 at a sale price of
$4,000, with down payment of ST.
$50, the rest of the money borrowed
from savings and loan institution at
total cost, interest plus extras, Of 6.5
per cent, and paid back in monthly in
stallments of $3.50 would be cleared
off in II years and months, and the
cost to the owner would be s4,629.
Adding an outside estimate of $2,300
for taxes and insurance to the entire
cost Of the home, and allowing $500
for maintenance over the 20 years, the
owner would pay out $9,179, as COM
pared with accumulated rent receipts
Of $9,193.
"And he has a free-of- debt house,
good for probably 20 years more OF life,
with which to face an era Of rising
rents which may take the cost Of
living almost anywhere, says the COM
mittee.