Evening star., 1940-02-24
F. H. A. 10 Back
B|ighted Area
Rehabilitation
New Field Seen
For Private Capital
In Real Estate


the country by real estate men,
builders, architects and local officials
to re-establish real estate values of
residential neighborhoods and coun-
teract blight by rehabilitating dwell
tngs in groups large enough to effect
substantial neighborhood change.
The movement to renovize well To-
Gated, deteriorated urban areas is
being led by the National Associa-
ton of Real Estate Boards.
Great impetus is expected to be
given the drive to improve blighted
sections of cities by the Federal
Housing Administration, which is to
announce shortly that F. H. A. mort
gage insurance will be open to re-
habilitation projects Building men
believe this will induce private capi-
tai to enter a field long neglected.
So far, the F. H. A. has only insured
loans for improvement of individual
homes.
Wholesale improvement of prop
erty in rundown neighborhoods will
shortly become economically feasible,
1t was declared by the Committee on
Housing of the national real estate
organization, which met here re-
Gently with Newton C. Farr of
Chicago, association president. The
committee enthusiastically Endorsed
the dwelling rehabilitation drive.
Would Reduce Costs.
This committee, under the chair
manship of Arthur w. Binns, Phila-
delphia realtor, reviewed and ap-
proved the tentative new F. H. A.
regulations. The association has
long urged governmental action to
encourage modernization of whole
sections of cities. The new Federal
policy is expected to make possible
financing at lower cost than has ever
before been known for the conserva-
tion. and where necessary, the re-
building OF older areas of cities. The
F. H. A. will establish an interest
rate of AZ per cent in rehabilitation
project mortgages of not more than
100000. Such mortgages over $780,
600 must go through the more elabo-
rate review now provided for new
construction on large-scale rental
projects, and would carry 4 per
cent interest rate.
This will make possible in many
cities, the committee pointed out,
beginning of reconstruction of old
areas through ordinary private effort
functioning through limited dividend
corporations. It estimates there are
at least 100000 substandard dwell
ing units in American cities, of which
probably half could, by a moderate
expenditure of money, be made USE
ful for generation to come, thus
providing sound sanitary housing at
less cost than new construction and
at the same time stopping advance
of blight and decay.
In many of the older urban neigh
borhoods F. H. A. mortgage insur-
ance has hitherto been unobtainable.
since individual projects there have
not been able to meet "neighborhood
standards" set up to insure mort
gage safety. The result has been to
conflne construction largely to the
city's rim and to unintentionally
accelerate the decentralization move
ment that is at work in many cities.
The committee termed rapid decen-
tralization of city the gravest
problem of local government finance,
pointing out that it leaves blight in
the older sections, calls for a huge
lengthening of street area and pub
lie utilities, complicates the traffic
problem, threatens loss of business
and loss Of value in central business
areas.
Association Enthusiastic.
The change Of policy which throws
r. H. A. support behind the move
ment for rehabilitating run down
sections of cities is of the highest
social Importance, officers of the real
estate association state.
Mr.. Farr comments:
'fUnder the program outlined, with
mortgage insurance available to
limited dividend projects large
enough to cover accommodation for
at least 16 families in a group, it
should be possible to design success
full reconstruction projects in areas
where up to the present time it has
been practically impossible to secure
financing on terms liberal enough to
(See REHABILITATION, Pg. B-2)