Evening star., 1939-01-01
Real Building Boom
Expected 10 Develop
In Next Year
New Post Depression
Peaks Likely After
Big 1888 Rise
8y Cambridge Associates,

BY Cambridge Associates.
Coaxed and wheedled by plar
after plan ever since it went into a
tailspin in the early sos. building
came forward in 1888 and demon.
strated independent strength Fail
ing, in the early part of the year, tC
drop off in sympathy with other
heavy industries, it made forward
strides before the end of the first
six menths which indicated that the
return of normal business activity
would be accompanied by new post
depression records in both residential
and industrial building.
1t cannot be denied that projects
financed with public funds aided
considerably in swelling the total OF
1888 building. In 1887 they accounted
for approximately 38 per cent of the
total with the balance evenly di-
vided between residential and in
dustrial building.
In the first nine months of 1898
public projects made up "A per cent
OF the total. residential building 81
per cent and industrial construction
only "a per cent. Increased appro-
prlatlons for public construction
were important in the recovery pro-
gram, and without these eXpendi-
lures the total of building activity
Tor the year would have been mod
erately under 1887. But to lose
sight of the fact that residential
building approached the totals of
the previous year would be to miss
most significant development.
Many Obstacles Removed.
In the early years of the recovery
the stimulation of residential build
ing was distinctly an uphill Job
Large losses suffered by banks and
individuals in the depression, many
empty dwellings, low rents and high
costs of labor and materials, all
combined to offset the more attrac-
tive interest rates that efforts of the
Federal Government made possible
In addition, there was the imme-
diate background of building boom
of somewhat senselesS proportions.
The magnitued of the 1924 1923
boom can be gauged by the fact that
the number of dwelling units per
1000 of population increase between
1920 and 1880 was IS per cent higher
than the average of the previous
seven decades. With the prospect
of slowing down of the population
growth, there is no wonder that the
outlook for building was considered
gloomy by realists.
Liberal Home Credit.
1t is possible that the increase in
residential building had to await the
modernization of the Nations pri-
vate transportation facilities. Ger
tainly it is true that consumers dol
lars flowed to the automobile in
dustry in such streams as to cause
considerable impatience on the part
OF planned economy advocates, who
felt that some of these dollars might
better be spent for homes. Con-
Sumers, however, have way of ex-
ercising their own preferences.
But the fuse which can probably
be credited with touching off the
new boom in residential building
was a further important liberali-
Zation of credit With a down pay
ment of only 10 per cent of the total
cost, and with extension of the term
OF the self -liquidating mortgage to
20 years, the gap between present
rentals and the cost of owning a
home has been narrowed to the point
where few prospective builders can
resist the temptation to commence
operations.
Added to this impelling motive is
a long list of attractive new ma
terials mad gadgets. Insulation and
automatic central heating have be-
come the accepted standard. There
is greater use of electrical appli-
ances. The "streamlining' of func-
tional areas, such as kitchens, bath
rooms, laundries and Easements has
created desire for new designs,
compact and spacious planning.
Closer relationship of house and
land for greater appreciation of the
outdoors has enlarged windows and
turned living quarters away from
noisy streets Thus the American
public has suddenly found that its
primary wants include living units
so radically different from previous
conceptions that new building is
imperative. Liquidation of the pre-
vious boom has at last been COM
pleted.
Comparison of the record of gen.
eral industrial production with that
of residential building in 1888 re-
veals that the latter was at least
25 per cent stronger than the for
mer. If a similar record can be
demonstrated for 1889, 10 to Is per
cent increase in general production
will result in IS to 40 per cent i'm
provement in building.