Evening star., 1937-11-29
Text of Presidents Message on Housing
Mr.. Roosevelt Offers SixPont Program in Effort to Spur
Private Construction


spring and summer. Housing must
be produced at prices. rates and rents
that the mass Of our people can AZ
ford to pay.
The Government has made pro-
vision, through assistance to munich
pal housing, for many of the most
| needy. But private enterprise and
| private capital must bear the burden
of providing the great bulk Of new
| housing. The measures I now sug-
gest are to encourage private build
ing to meet the needs of families of
| moderate means. These proposals
cannot be effective, however. unless
all elements concerned in the con-
| struction Observation-Disclosures. contrac-
tors, manufacturers of materials and
equipment, labor and fnance-co-
operate in producing housing that is
within reach of the incomes of the vast
ma ajority OF our citizens
II the building industry is to play
the vital part that it ought to have
in our economic system, it must do it
in the characteristic American way
1t must develop, As other great in
dustries have developed. the American
genius for eficient and economical
large-scale production. The lower unit
costs resulting from large-scale pro-
duction will make for greater annual
returns for the entire building in
| dustry, including all workers engaged
| in that industry. and for a higher
standard Of living for the country as
| a whole.
Government Unable
To Do 1t All.
The problem of reducing costs TO 4
point where larger volume, longer
| employment and higher annual earn
ings are possible Is one that must be
solved in major part by the building
industry itself. The Government,
| however, can take the initiative by
bringing about q reduction OF financ-
ing costs. by making it easier for
families Of moderate means to buy or
| rent new houses, and by providing
mechanisms to make it practicable for
private enterprises to engage in large
scale housing operations for the mass
market
In order, therefore. that Govern
ment may give the fullest encourage
ment TO broad revival Of building, !
recommend that the Congress adopt at
this time measures TO facilitate the
financing Of every type of housing
construction, whether for sale or for
rent, and ranging from the small
house to entire residential communi-
ties and large low-rent apartment
buildings. In addition to measures to
stimulate new construction, recon-
mend that provision be made for an
extensive program of repairs and
modernizatDn
As practicable means of encour-
aging and facilitating more effective
operation of private enterprise and
private capital in the housing field
I am suggesting enlargement Of the
framework Of the National Housing
Act in the light of actual experience
This legislation enacted by the Con-
gress in 1894, provided a new financial
mechanism applicable to all types Of
lending institutions that make loans
for housing purposes. Enabling legis-
lation giving effect to this new mech
anism was subsequently enacted by all
the States. Within the limits Of the
types of housing to which it applies, 1t
has proved to be both popular and
practical.
Under the National Housing Act the
Congress established the Federal Hous-
ing Administration. which insures
mortgages on certain types Of housing,
but itself makes no loans. The agency
is designed to become self-sustaining
through the operation of a mortgage
insurance fund, into which premiums
are paid by borrowers who obtain loans
under the provisions of the act from
private lending institutions. An ulti-
mate guaranty Of loans that may de-
fault Is given by the Federal Govern
ment, but this guaranty becomes oper-
ative only in the event that recoveries
from the sale Of defaulted properties,
! together with all the monies In the
insurance fund, should be insufficient
W pdy IAAC uIoOiCO CloluAS I1CiACS, CFCAA
If any cost should result to the
Government because Of this guaranty,
1t would be negligible when measured
by the volume Of construction and
employment induced by the fact that
the guaranty is there should it ever
have to be availed Of.
The benefits of financing under the
National Housing Act apply to two
main classes Of transactions-r,amely,
those In which q single house be-
comes security for = loan and those
In which . limited dividend company
obtains q loan in order to develop q
rental housing project. The amend
ments which am suggesting are Of
three kinds: Q) to effect further
reductions in financing costs: ca to
extend the insurance Of mortgages to
types Of housing operations not now
adequately provided for In the act;
(3) to make the funds Of institutional
and individual investors more easily
available for the financing Of large
scale operations.
Interest Should Bs s.,
| Cut to Per Cent.
Because 1t taksssthe av@ngs buyer
Of Z house or ins&stoe In housine 9
long time TO pay" for ths property.