Evening star., 1949-07-02
JOHN W. NICHOLSON.
Discusses Increases in Cost
OF Housing As q mirage"

Discusses Increases in Cost
OF Housing As Mirage"
To the Editor Of The Star:
My attention was called the other day to
a column in one of the morning papers
which told of the sad plight of real estate
man who, unable to sell his houses at SIS
500. was going to rent them in the very near
future.
Now, there is my idea Of an optimist. Nor
is he alone, the real estate man. mean.
There are other optimists around who are in
for a very sad awakening If may be per-
mitted to use little Of your space, would
like to give my opinion as to why believe
such optimism is foolish. I think that there
are great many people in and out of the
real estate business who really are "whistling
in the dark" ~
To begin with, why aren't those houses
selling for $15.500? We will assume that
they are very good houses, and the chances
are that the builder made a good job Of
building them, and that the price is fairly
based upon the cost. Well according to an
article I once read in one of the Sunday
supplements in The Star called, How to
Buy Home" The price that q buyer should
pay for home is approximately twice his
net annual income. To buy home for the
above figure, and that is what 1t takes to
buy house that just begins to be suitable
for that average American family exempli-
fed so we'll by the Berrys on your comic page.
consisting of one father. one mother. one
daughter and one son. to buy such home
calls for salary or an income of $7750
year after withholding and social security
or retirement deductions. Where are you
going to find incomes like that to justify
building homes of that character in the
hope that some one will come along and buy?
Where?
Earnings Not Proportionate
Let's look at another side Of the picture.
What is the relationship between the rise
in the price of homes from. say. 1910. to
the rise in wages in the same period. Let's
take the case of Government worker. say
a non-veteran, some one who has to rely on
himself to provide housing for his family.
Take the case of a prewar and postwar
man whose rating is that Of P-3. In 1910,
q P-3 received $4,000 year from which
small percentage was deducted for retire
ment and another small percentage went for
income tax. Since I don't know what the
figure is, I'll guess his net take home was
about $4,000 a year. Today, P-3 is paid
$4,479.60 year, and according to the charts
and tables, with the same three dependents.
his net take home comes to $3.932.50, or
to round it off, say $4,000. In other words,
the net take home pay of the head of
family working for the Government as
grade P-3 has been increased $1,000 over
SO 900 or a third. What about house, a
three bedroom house? According to the for
mula laid down in the article in The Stars
Sunday supplement, the prewar man should
buy $4,000 home. AS we all know, many
prewar workers did buy brand new three
bedroom homes for around that ngure.
There Is a development called Arlington
,1tr 1@y~N 40 "a
seen. I know some one who bought such
home for precisely that figure at about that
time. Now, to keep the proportion straight,
this postwar P-3 will be back in the pic
ture as home buyer when his prewar S.
900 home is priced according to his In
crease in salary, up one-third or $4,000. In
other words, new home for P-3 should
sell for that figure $4,000. Obviously, the
cost of homes has risen all out OF propor-
ton with the incomes Of those who need
them most family men, with two or more
children.
Rental Increases Too High
Now, let's look at the rental picture. Be-
fore the war I rented brand new apart
ment consisting of one kitchen, bedroom,
living room and bath for $3.50 month.
I am still in that same apartment. II my
rent had been upped one third. should be
paying $50 I pay more than $50. What
is irksome about the situation is that the
landlord regards my living there as an i'm
position since mine is typical American
family, ie.. one father, one mother, one
daughter and one son. My apartment re-
ceives attention only as last resort and
I have been plainly told to expect nothing
in the way Of larger apartment though
there are many in the development which.
from time to time do become vacant. II I
wish to go elsewhere stand no chance OF
obtaining a brand new apartment whose
price has risen in proportion with the in
come rise so generously provided by Uncle
Sam for his own workers, namely one-third.
So, there it is How is 1t going to end?
OF course, something will have to give way.
Signs of recession in many industries have
hit the pages of The Star lately. In my
own case, know that I have bought moth
ing but bare necessities since the end OF
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