The Bismarck tribune., 1937-12-08
Behind ise Scenes
-~
Washington
Roosevelt's Hoped-for Housing
Boom, and Its Chances; Some
Doubt Consumers Market Unless
Cost Reduction Comes First.

Boom, and Its Chances; SOM
Doubt Consumers Market Unleel
Cost Reduction Comes First.
BY RODNEY butcher
Tribune Washington Correspondent
Washington, Dec. Opinion ap-
pears to vary as to how much Of the
potential Is billion dollar housing
boom suggested BY Roosevelt actually
can be realized.
The problem Of reducing building
material and labor costs, which the
President will tackle In promised con-
ferences with industry, labor and II
nance, and which he'says must be met
II the proposed boom Is to succeed, 4
very far from solved.
The effectiveness of propose
changes In the Federal Housing ad-
ministration law, although calculated
to make housing investment slightly
more attractive, also Is questioned.
The administration hasn't yet made
up It's mind whether to seek to use
capital gains tax exemptions, and tax
alton Of income from tax exempt
bonds, as a means Of pushing money
into the housing market.
Some experts believe that early next
year the pressure Of insurance COM
pany and mutual savings bank funds
yearning for investment will begin to
flood into the housing field, regard
less Of administration moves.
Others suspect that the strike Of
capital" will balk the Roosevelt effort
until the administration makes vart-
Gus concessions to Wall Street or
finally defies reluctant private capital
and undertakes to launch huge
house building program Of Its own.
X \ X
Consumer Market In Doubt
Finally, there appears to be much
doubt as to just how large q con-
sumer market there Is for new hous-
ing and just how much potential
buyers or renters can afford to pay.
After the Presidents message ap-
peared, the National Housing COM
mittee decided to postpone publica-
ton Of Its report on the available
market for dwellings.
The report will show that the num-
Der Of families which can afford to
pay $50 month for rent Is now
about a third ss large as the number
in 1929, when Il was figured at about
Z ,000, 900 non-farm families. (Roughly,
an income Of $50 q week can econom.
ically pay rent Of about $50 month
on house costing IN average OF
about $5,000o
The report will show that 90 per
cent Of all dwelling units built In the
period Of l930-37, when prices Of
building materials and labor averaged
less than at present. cost 5000 Or
more. (I2oosevelt makes moderate
estimate Of $4,000 per unit. In the
boom which the administration hopes
will appear to beat the depression.)
\ X \
Shortage In Low-Cost Homes
The committees survey win show
that there Is practically no shortage In
houses costing 5000 or more, no con-
siderable shortage In the range rent
ing between $50 and $50 q month, but |
q great shortage In the range rent |
Ing from $40 to $50 month.
Although these figures may offer no |
great encouragement to the admins
stration and Its hopes. they certainly
suggest confirmation Of the Presi-
dents idea that prices and rents Of
new dwellings must be driven well |
below present levels II any important |
results are to be achieved.
The National Housing committee. !
Of which Monsignor John A. Ryan Is |
Is composed Of Industrial !
lists, labor leaders and others Of na-
tional prominence. Its survey Of the
market was made through |
consultation with . number Of out
standing economists and statisticians |
In government and industry.
X X X
Middle Glass Hit Hardest
Findings indicate that the middle
income groups which buy average,
modest homes have not emerged from
The depression as well, proportion
ately. as the higher income groups
and the very low income groups.
Although In 1899 1t was found that
l26 per cent Of American non-farm
families had annual incomes Of less
than $500, only 8 per cent were In that
group In 1885. (The average annual
WPA wage Of $3.50 was factor here.)
And while the national income In
creased IS per cent from 1888 to 1895,
families in the $50-a-week group in
creased only a. per cent.
Some housing experts think that