Evening star., 1954-08-08
Housing
'MickIe Makes q Muckle'
With HA-Bocked Looms,
Senute Probers Leurn

Washingtonians who have q hard
time saving q buck (much less teach
ing one to multiply were fascinated
last week by stories Of how two local
builders did q lot with little.
The stories were unfolded before q
Senate committee investigating ir-
regularities in Government-ba
construction loans. The committee
was curious to know just how they
Jared with their apartment projects
under the generous provisions of the
now-expired postwar apartment pro-
gram.
Witness No. was Morris Cafritz,
perhaps the best known local builder
and husband Of Washington's cur
rent hostess with the mostest. Sec.
ond witness was Ian Woodner Of
Washington and New York, known
here for his scrumptious apartment
overlooking Rock Creek Park.
How 1t Worked
Mr.. Cafritz was asked to explain
q parlay of $4,000 into a poten-
tial $7.2 million apartment Inherit
ance for his sons. This was it:
He bought q piece Of farm land
at Stanton road and Alabama ave-
nue. Sc. in 1941 for $4,000. Sew
eral corporations were set up to
hold the land in trust for his chill
dren and to build and operate .
project. The Federal Housing Au-
thority guaranteed $3.50, 900 loan
to build the apartments. They were
built in 1851. but for $552,000 less
than the loan.
The situation now Is this. The
corporations have properties esti-
Anyhow, it seems Mr.. Woodner
II all goes well and the apart
ments continue to be filled the cor
porations will have paid the loan
in 80 years and the Cafritz sons
will be outright owners Of prop
erty worth a good many million
dollars.
tee loan on the project would have
been harder to get and it might not
have been so big. Mr.. Cafritz would
have had to put up more of his own
money. Meanwhile, Mr.. Cafritz and
the bank, rather than the Govern
ment, would have stood the risk Of
failure of the apartment project.
Mr.. Cafritz gained from the whols
transaction fine, cheap Inheritance
for his sons with little personal risk.
The public gained a housing project
at time when housing was des-
perately needed. But the committee
wonders If the Government wasn't
much too free with its offer to un-
derwrite multi million dollar risks
on this and thousands Of other
projects.
Woodner Deol
Next on the agenda was the story
of Mr.. Woodner--a tale Of one
apartment that became two, or per-
haps two apartments that look like
one.
Anyhow. it seems Mr.. Woodner
wanted to put about $40 million
worth of apartment units into
scenic bit of property out Sixteenth
street NV. He wanted an FHA-in-
sured loan, but the law specified
that no single project and its mort
gage could exceed SIS million.
But little ingenuity got around
that obstacle. He built two buildings
one inch apart, filling the inter-
vening space with soft caulking
material" and secured an FHA-
backed loan for each. Total mort
cages: $9,984, 300. or roughly twice
the limit.
The FILA complained when some
of the bathrooms overlapped into
the next building, and Mr.. Woodner
cut them off. But there were no
complaints about corridors that
went freely from one building to the
other-right through wall, space.
caillking compound and all--just as
if it were one building.
The committee questioned the pro-
priety Of his operations and also
wanted to know just what happened
to at least $167. 900 parceled out to
the bank accounts of members of
his family during the time he was
looking for FILA loans. Mr.. Wood
ner couldn't recall for sure Just what
the money was for or where it went.
The committee subpoenaed his com.
pany records.