Evening star., 1937-11-21

more families Of moderate income
could support the ownership OF a
house adequate to their needs. States
the Commerce Department housing
expert: THE effects which may be
expected to follow substantial reduc-
tions in financing and other costs Of
ownership during periods of active
demand for dwellings are extremely
large. . 1t is not easy to justify
interest rates and other financing
charges totaling 6 to 6ha per cent
on residential properties in new, we'll
planned neighborhoods when prevail
ings yields upon industrial and pub
lie utility bonds are no higher than
31a to 4 per cent"
It does not seem essential that such
high home financing costs should pre-
vail here, when in many European
countries just the reverse relation
ship obtains. Hence the administra-
ton intends to recommend liberaliza-
ton of the act governing the Fed
eral Housing Administration, which
guarantees home mortgages.
The Federal Housing Administration
at present insures loans made to home
owners by banks, life insurance COM
panies and building and loan asso-
Citations for repairs and construction.
BY assuming the risk, it encourages
such private institutions to lend. But
there are now certain safeguards
which, some think, restrict its bene-
fits. Thus. the new home owner must
have 20 per cent equity in the house.
In other words, only 80 per cent of
properties up to $4,000 in value may
be insured. II this were changed to
80 per cent. at least for small houses,
house building would receive a great
stimulus, it is being argued. Also,
modification Of the law to permit loans
to operative builders as well as indi-
vidual home owners is being recon-
mended. In this connection building
for rent instead Of sale is an objective
Cost Harmonies Necessary.
| AS to home building costs other than
financing, much might be accom-
plished. Thus. permitting wages and
prices to play leap-frog, industry and
labor-as Secretary Roper and other
officials have uggested-should get to-
gether and plan for their own and the
country's best interests. In Great Brit
tain, six years of voluntary co-opera-
ton of all branches Of the housing
industry have assisted in maintaining
building activity. The rates of build
ipo c0rinfioc hovo hoop rod,1cod fro,,a
per cent in 1929, to as low as ~
per cent. Due to agreement between
workers, contractors and the govern
ment, by means of which workers have
accepted lower hourly wages in return
for more sustained employment, costs
have been further lowered, and volume
maintained.
Strong revival of the building in
dustry would give powerful stimulus
to business throughout the economic
system, as it has done in England.
The favorable effects would be felt by
all those who produce, transport, dis
tribute or handle the numerous ma
terials used in construction work.
illustrating the ramifled economic
effects Of building activity are the
statistics of the Bureau of Labor Stat
istics on material orders placed in con-
nection with construction projects A.
nanced by Federal funds from 1884
to September, 1887. OF the total Of
81. .ss2 600, 900, some $862, 100000 went
for stone, clay and glass products,
STAT, 900, 900 for iron and steel, $780,
100000 for machinery, $206, ,000,0
for forest products, $96,000,000 for
transportation equipment, etc.
The United States Chamber Of
Commerce, which is sponsoring q