Evening star., 1939-11-05

-HQrrtS-E1C1ng Photo.
about the burden on the taxpayer OF the
public housing program. But the figures
are very simple, hinging with mathe-
matical precision upon the basic fact
that it costs the Federal Government
somewhat under $40 q year for each
family rehoused.
The Cost illustrated.
Now just how do we arrive at this $120
figure. BY way of illustration, the Smith
family, consisting of father and
mother and two small children, live in
one Of the worst slum sections of ANY,
town. For their substandard abode,
without adequate heat or light, infested
by vermin, lacking decent sanitary IA
cilities, the Smiths pay rent of about
$50 month, or about $240 year. From
time to time Mr.. Smith looks around
the town to see how much he would need
to pay for decent home for his family.
He finds that he can get nothing for less
than about $40 month, including heat
and light, or about $3.50 year. But the
whole annual income of the Smith FAM
lily is only about $500. Mr.. Smith finds
the situation not only hopeless for the
present; it offers no hope for the future.
The United States Housing Authority
exists for the purpose Of helping the
Smith family, and others similarly STU
ated, to live in decent homes at rents
they can afford to pay. Finding that
there are no such houses available to
the Smiths in Anytown, and that private
industry is not building any because it
is not profitable to do so, the U. s. H. A.
lends to local housing authority 80 per
cent of the cost of building a durable,
well-planned and well-constructed house.
The local authority contracts, just as
businessman would contract, to pay
back this loan in full over a period Of
years, principal and interest. Both the
house and the rents earned by the house
are security for this repayment. More
over, as the u. s. H. A. has been Dor.
rowing money at about 13s per cent and
lending 1t to the localities at about 3
per cent, there would be an interest
spread in favor Of the U. 8. H. A. of
about $50 year, II this were the whole
transaction.
But this is not the whole transaction.
For If the Smiths had to pay the whole
annual principal and interest charges on
the building loan, which would be about
$14.5o monthly, plus operating costs, de-
probation, etc., amounting to about $l4
a month, plus taxes amounting to about
$6 a month, plus heat, light and other
utilities amounting to about $3.50 a
month, they would be faced with a
monthly rent bill of about $40 or an an
nual rent Of about $3.50.
Contributions Cut Rent,
In order to get the rent down to the
reach Of the, Smith family, the U. S. II.
A. annual subsidy or grant-in- aid comes
Into the picture. The U. s. H. A. pays
an annual contribution, amounting to
about 81 per cent of the cost Of the
home-that Is, about $14 a month or
$l6S year. This reduces the monthly
rent from $40 to $26. In addition, the
locality pays an annual contribution, In
the form Of exempting the home from
local taxation. This exemption amounts
to about $6 a month, which further re-
duces the rent to $40 a month or $24O a
year. This is about the same rent that
the Smiths have been paying for their
miserable slum dwelling. They can af-
ford to pay that much rent for more
truly American standard of life.
The net result, subtracting the $50 .
year interest spread on the q. s. H. A.
loan from the $168 q. s. H. A. annual
contribution, Is that it costs the U. 8.
H. A. somewhat less than $40 year
net to help the Smith family live de-
Gently. That Is the story Of public hous-
ing costs.
Now for another interesting revelation
about housing costs. Many people have
been worried ct the thought that the