606





RECORD   AND    GUIDE





October 30, 1920





the shortage, yet it is almost two years since the armistice
has been signed and there has been nothing constructive done
to give relief. Instead of the slogan being "Houses," it has
been politics and votes. Governor Smith sent two construc¬
tive programs to the legislators, but they were more inter¬
ested in politics than relief, and they adjourned twice without
paying any attention to the Governor's helpful suggestions.
In fact, their attitude toward the laws which heretofore have
protected capital invested in real estate has been such as to
actually drive capital out of the field. Early in the discussion
it was realized that there was nothing the legislature could do
to interfere with the law of supply and demand affecting busi¬
ness buildings. Though there was just as much profiteering
in this class of property, and though the halls of the legis¬
lature rang with the suffering of the store and office and
left tenant, the police power of the state could not be in¬
voked in this direction, with the result that buildings to re¬
lieve this pressure are being erected on every hand. In New
Y'ork City from Fourteenth to Fifty-ninth streets over 8,000,000
square feet of loft and office space is under construction,
while the residential feld is practically stagnated.

Both party platforms recommended the passage of a law
exempting income from mortgages for a limited time from in¬
come tax, in order to set an example for the national gov¬
ernment to follow, and to entice money into housing invest¬
ments. A bill to this effect was presented at both sessions
of the legislature. Politics at the last moment twice killed
this measure.

Another play to the galleries on which the curtain should
be dropped is the talk of building new multi-family houses
for the laboring man. At the present price of labor and
material this is a financial impossibility. Why not admit it?
The City and Suburban Homes Company, a corporation or¬
ganized for the purpose of erecting model tenement houses
and looking only to making simple interest on the capital
invested, erected some houses in Brooklyn in hopes of being
able to help relieve the pressure. They found, in order to
make the buildings carry themselves, at less than 5 per cent,
interest, and provide for a proper amortization of the excess
cost of buildings at the present time, that they were com¬
pelled to charge for three rooms from $56 to $58 and four
looms from $71 to $73. The relief will come, when it does
come, from another direction, unless funds are available to
build houses with the intention of renting them at a great loss,
and no self-respecting American citizen cares to nor should
be encouraged to live in a house under these circumstances.

Due to the higher rents the apartments and houses which
should be available for the workman are being partly occupied
hy families who can in normal times afford to live in more
modern and better quarters. Room must be created for them
to move and vacate the space they now occupy for their
poorer neighbor, and this shifting must be started well toward
the top. Furthermore, our great sympathy should not be
falsely aroused entirely for the laboring man, who is receiv¬
ing $6 a day for unskilled and $10 a day for skilled work,
and in addition large sums for overtime and plenty of work
for every day in the week. It is the self-respecting middle
class; our clerks, policemen, firemen, teachers and such who
are the greatest sufferers and who are little heard or spoken
of.

England has had a subsidized tenant housing policy since
1851. In 1916 the British authorities anticipated the housing
shortage by creating a Bureau of Housing in the Ministry of
Health. Since the latter part of 1919 they have had a subsidized
builders' policy of about 25 per cent, of cost, yet they are in a
worse condition than that in which we find ourselves. In
England and Wales during the past three years $500,000 has
been spent annually in salaries for the housing bureaus. The
number of schemes under consideration was 40,000, yet one
year after the armistice was signed not a single house was
ready for occupancy. Up to July 1, 1920, about 3,000 houses
had been completed out of 100,000 houses which the Govern¬
ment had promised would be ready by that date, notwith¬
standing the fact that 100,000 houses is only one-eighth of the





number declared to be needed in England now. England is
proposing to build 500,000 houses for her people at an esti¬
mated cost to the taxpayers of Great Britain of over $100,-
000,000 loss every year for a period of.sixty years. A better
grasp of these figures can be obtained by taking an individual
case. A Government built house, which, in order to make it
self-sustaining, would require a weekly rent payment of 32
shillings, not including taxes. (In England the tenant pays
the taxes as a part of his rent.) If these taxes were added
there would be a weekly rent of 48 shillings. The Govern¬
ment, I am informed, promises to rent these houses at about
11 shillings or a loss, as compared with private capital, of 37
shillings per week per apartment.   What, then, can we do?

First and foremost re-establish the confidence of'capital—that it it is in¬
vested in hou.ses that the laws will protect the investment.

Second: Change our national income tax laws. Either have a gross
sales tax and rescind the excess profit taxes which have been great deter¬
rents to enterprise' and business, or exempt, as an emergency measure,
income from mortgages from the surtaxes. If we can get Congress to
grasp the situation and act at its next session, a great deal will have been
accomplished.

Third : Enact national and state laws to Increase the facilities of the
building and loan associations.

Fourth: Get after the coal mine owners and their mysterious sub¬
sidiaries and cut out several of the royalties and unnecessary piling up
of profits, so that the brick yard and cement and other mills can turn
out their commodities at reasonable prices.

Fifth : Enact laws that will compel the large savings banks and insur¬
ance companies of all kinds, charitable and philanthropic institutions to
do their fair share. At present the burden is carried by a few. The re¬
serves of these companies and institutions should be divided and a fair
proportion invested in real estate mortgages. As it is, throughout the
country less than one-third ot all the mortgages a»e held by institutions
and over two-thirds by estates and private individuals.

Sixth : The railroads should give priority to coal, and to building mate¬
rials which  are going to be used for creating new homes.

Seventh: All discussion ot laws for municipal housing must cease.
The State must either do it all or not at all. Business cannot compete
with the state.

Eighth : Some permanent state agency should undertake tho study of
the housing problems and from time to time recommend proper lawa and
regulations to protect the health and morals of the community, to regu¬
late and properly safeguard co-operative and installment schemes for land
and buildings; to see that proper standards are maintained so that in
the new sections of our growing cities such conditions as exist in our
so-called slums in the older parts of New York shall not be repeated;
encourage competition in zoning and town planning, in model tenement
construction and economies in planning and building. It should also con¬
duct a never-ceasing campaign in favor of owning your own home. Statis¬
tics should be gathered and given publicity, of the need for housing and
the quantity under construction, it possible to prevent excessive over-pro¬
duction,  followed by wholesale foreclosures and depression.

Ninth : If possible, we must devise some feasible plan by which labor
will not go out on strike but will continue to work during the period
of a dispute. A school building in course of erection in New York City
had a record of 65 strikes.

Tenth: Public opinion should be brought to bear upon the artisans to
give a full honest day's work for their pay. There is no reason why a
bricklayer or plasterer should do from one-half to one-third of what used
to be a reasonable day's work.

Eleventh : The so-called rent laws should be carefully considered and
amended, so as to give relief where it is needed, yet to make a man live
a form of government subsidy to take up some of the slack, should there
be a great drop in prices of building material.

Twelfth : If necessary to encourage more rapid response to the nee^s,
up to his contract. I am convinced that bad as tbe housing situation
really i^.  it  is not quite as bad as it has been pictured.

I think, gentlemen. I have shown that there is much con¬
structive work which can be done. Your organization is a
great body for forceful and effective work. With the sup¬
port of the national organization, of which you are mem¬
bers, much can be accomplished. Remember above all that
yours is one of the greatest commercial activities in the
country, and among the most important. By the character of
the houses which you build, by the type of neighborhoods
you create and by the manner in which you maintain and
manage your properties, will be reflected, to a large extent,
the character of our citizenship. The landlord and his agent,
through their influence, can be a tremendous influence in the
home life of our people, and can be a very great factor in
reducing the cost of government. The cost of maintaining
our police, fire, health, street cleaning and charitable agen¬
cies, totaling hundreds of millions a year in this state alone,
are largely within the control of those engaged in the real
estate business. If the proper example is set, the community
can usually be induced to live up to that standard, and where
cleanliness and healthful surroundings prevail the cost of gov¬
ernment is bound to cost less. With honest officials and real
co-operation between those engaged in the housing of our
population, and the physical development of our state and
its municipalities, real progress,can be made toward the solu¬
tion of the housing problem.

You are all familiar with the present prices of materials. I
thought you might be interested in a few figures which I
(Continued on page 621)