Evening star., 1937-04-10
BR|TA|N'S HOUSING
POLICY OUTLINED
Building Spur Seen in Low
Interest and Initial
PAYMENT.
apecIsl Dispatch TO The Star.

OMAHA, Nebr., April 10.-"The
three greatest incentives to house
building and house owning are low
rates Of interest, low initial payments,
reasonable terms of repayment" Sir
Charles Morgan-Webb of London,
England. financial consultant to par
1iamentary committees, said here today
before the Great Lakes Regional Con-
vention of the National Association Of
Real Estate Boards.
He explained how it took Britain IL
years to evolve satisfactory housing
policy He outlined the policy, which
is producing in Great Britain some
100000 per year through private enter
prise, feat which may be measured
by the fact that the United States,
with three times the population, pro-
duced last year only some 100000
dwelling units including both houses
and apartments.
The factors which have caused re-
markable development of building by
private enterprise in England are, ac-
cording to Sir Charles:
l. Cheap money; the provision of
capital to every member of the COM
munity in position to purchase a
house, at per cent; since 1885, Az
per cent.
2. The utilization of the credit of
the local authority to reinforce the
credit of every person building house
within its jurisdiction.
3. The excellent organization of the
building societies English building
societies are much like our building
and loan associations but are not alto
gether the Same)
4. The system of cooperation be-
tween local authority, building society,
builder and prospective house owner
in financing the building of new
houses.
5. The low initial payment required
from the prospective house owner.
The building activities of Britain
since the war, he said may be divided
into three periods: The subsidy period
G92O-1928), the transition period
1928l932) and the cheap money
period 1882 to 1880. His analysis
follows:
Difficult to GeneraliZe.
1t is difficult task to generalize
from our widely extended and widely
diversified experience during a period
of abnormal conditions following the
late war;, but most British housing
authorities would subscribe to the fol-
lowing
l. The spheres of public and private
enterprise in housing are distinct.
They should not be allowed to overlap
or TO compete with each other, but
cooperation (as in item 6 below is
beneficial
2. Public enterprise should be lin
tied to two fields: (a) Slum clear
ance and overcrowding, where housing
conditions are menace to public
health. (b) The provision of cheap
housing accommodation at low rentals
for the poorer classes of the COM
munity who cannot afford to pay eco
nomic rentals.
3. Public enterprise, being confined
to unremunerative housing construc-
ton, must be subsidized either from
national or local taxation, or both.
4. Private enterprise in housing
should not be subsidized except in very
rare and abnormal circumstances.
5. The existence of weIl-managed
building societies enables local author
tiles to cooperate with private enter
prise by reinforcing with It's own credit
the credit OF the individual desiring to
purchase or build a house.
6. The three greatest incentives to
house building and house owning are
low rates Of interest, low initial pay
ments and reasonable terms of repay
ment
7. These three incentives cannot
function under a monetary policy
which entails high rates Of interest, or
frequent disturbances OF the rates of
interest by changes in the bank rate.
The housing shortage was SO severe
after the war that house building both
by public and private enterprise was
generously subsidized.
Many Defects In Subsidy.
But the subsidy system was found to
have many defects. 1t did not cater
sufficiently for the poorer classes of
the community or for those who wished
to live In rented houses. 1t stimulated
competition for subsidies between pub
lie and private enterprise. It forced
Up the prices of building materials.
And, moreover, it was extremely ex-
penstve, adding heavy burdens not
only permanent burdens to the ma
tional and local debts, but also annual
burdens to the current rates and taxes.
1t was, however, not financial strin-