Out of the Administration's semi-efforts at housing in the last two years, it has become quite clear that nothing significant will eventuate. The final stage has been President Roosevelt's recent decision, at the Hyde Park Hopkins-Ickes conference, to cut public housing funds still further. The public must dig beneath the glittering phrases still used by government officials and grasp that this is the virtual abandonment of low-rental housing.
The housing vagaries of the Administration result from the fact that it has never visualized housing as a central issue of vital importance in the life of the people, but only as one of many unrelated sources of emergency employment. Housing is an excellent means of steady employment, but the government through its blundering has never got far enough to find this out. We need not go over the well-known dreary statistics of the government's inaction and its inner contradictions, though it is useful to examine the reason for them. We must now look forward, reorient and revitalize housing thought, state the new objectives, and study how to achieve them. The need for thinking and action is urgent. for, paralleling the President's announcement, recent moves in Washington indicate that the Administration is turning to private residential construction to supply adequate reemployment and in some magic way to reach rentals and accomplish things that it has never been able to do here or in any other country.
In formulating a program a number of elements must be considered which are not new but which have hitherto been inadequately considered: the impending shortage of housing, which may well become so intense as to have all the dangerous possibilities that drove Europe into enormous housing activity after the war; the necessity for considering urban, suburban, and rural housing and planning as an interrelated whole instead of as a series of isolated incidents; the necessity for mobilizing and correlating all possible public and private agencies to undertake a really large program; the projection of these elements against national capacity to produce, with particular reference to preparation of a chaotic building industry for such a task; consideration of the cost of such a program and the taxation required to finance it; vigilance to prevent taxation for necessary subsidies for low-rental housing coming out of the pockets of those who require the subsidies; a solution of the legal problems, as between locality and central government, which have arisen during the two years of the emergency program.
There are three conceivable possibilities: first, to let purely private enterprise do what it is willing to do, with inducements from the government; second, a policy which would provide for subsidized public low-rental housing of a livable standard, while allotting to private enterprise all it could be expected to handle, in as orderly a way as possible under existing conditions; third, a program based on an untrammeled capacity to produce. The first can be shown to be not only wholly inadequate but ultimately disastrous. The second needs to be developed rather fully because it appears to be the most immediately feasible. Enough will be said of our capacity to produce housing to indicate what we may one day enjoy. Though there is no adequate solution for the housing problem within capitalism, yet I do not propose that we should all sit around writing essays until capitalism ends in this country. The example of Europe, especially that of England, where conditions are in so many respects like ours, shows that a great deal can be done.
We must understand that the reasons for the Administration's failure were largely gratuitous rather than inherent. Most important was the lack of first-rate housing minds to think a program through, and inattention to the advice of those who were there. Not the President, not Hopkins, not Ickes ever met any first-rate men intimately or talked with them long enough to get any comprehension of the problem. Moreover, the various isolated agencies which were created nullified one another's purposes. For instance, the Home Owners' Loan Corporation would bail out a mortgage and revivify the owner in some area where the PWA was trying to assemble land for slum clearance; the Federal Housing Administration might refuse a loan which it found had been accepted later by the Federal Home Loan Bank; the FHA might be insuring a modernization loan in a district where the PWA was trying to make an assemblage. Failure to coordinate the agencies is inevitable when they are basically incapable of coordination, established for purposes that are incompatible. And finally in the PWA, the agency charged with slum clearance and low-rental housing, there was an almost unbelievable series of gratuitous errors, sudden reversals of policy, petty bickerings, arguments about procedure. I as an architect can draw plans and write specifications as quickly for a public agency as for a private client. But if I don't get a contract, if I'm not told what to do, if I find out my client hasn't got the land yet and doesn't know what size and shape it is going to be, I'm licked. That sort of thing has been happening for two years in the PWA.
Housing, which can create regular reemployment and constitute a far greater stimulus to industry than any made-work project, has been so harried for instantaneous results that it has never got started at all. No one even in the government has ever known how much money it commanded, because varying amounts have been allotted, taken away, reallotted, and taken away once more. If architects and planners had been at work right along, a tremendous program could now be ready.
Failing to understand the purely adventitious reasons for its own failure, the government now plumps for private work. From the latest news, it has brought in Peter Grimm, an able real-estate broker, and Harold Riegelman, an able real-estate lawyer, who, sitting in with three or four building-material-supply men, will presumably formulate a new housing policy. At least for the next few days. While these men are no doubt able in their particular fields, it is downright ludicrous to expect that their experience or training fits them to deal with one of the most complicated and serious problems facing the nation today.
This failure to formulate clearly and then act has been due to the lack of important pressure for intelligent housing. The existing pressures are those of subdividers, building-and-loan associations, and the building-material industry. They have pushed the FHA, with its insured private loans and speculative building, into the foreground of Administration plans. To show how inadequate this will be, we must once more consider what housing is.
The slum and the blighted district--urban and rural- are only the most spectacular manifestations of the bad conditions under which almost all of us live. The people who live in slums can't afford to live in decent places. Those who can afford to don't get anything really satisfactory, unless they shift around with the shifting, sprawling city and suburb. Lack of play spaces and convenient parks, noise, exposure to traffic accidents, encroachment of business, overcrowded roads and streets and subways--these affect the well-to-do only in less degree than they afflict the poor. The well-to-do shift to new areas, and the poor move into the abandoned unsatisfactory areas. If this sounds an exaggeration to anyone, let him simply visit the derelict areas that were good neighborhoods twenty, fifteen, ten years ago.
Thus the housing problem is twofold. First, there is the lack of reasonable planning and stability which makes our entire physical environment unsatisfactory. Then there is the problem for something like two-thirds of our population who haven't the money to pay for physically decent housing--whose income or relief wage or relief dole is not enough to pay the sum of real-estate taxes, current interest and amortization on cost of land and building, and adequate maintenance. On top of these permanent elements there is the impending housing shortage, which will affect both groups. The problem of the two-thirds is bluntly one that involves redistribution of wealth. The physical solution is similar for all: planning and construction of projects on a sufficiently large scale so that they can be free from traffic dangers and extraneous noise, can contain facilities for recreational and community life, and can achieve the economies of large-scale planning and its amenities of proper orientation to air and sunlight. Such projects must be so related to the larger community of which they are a part that they are within convenient reach of daily work, of shopping districts, of larger recreational and park areas. They require continuity of physical existence instead of the present constant shifting--reasonable continuity of tenure by tenants and continuity of management.
Private enterprise as now constituted cannot alone cope with such a problem even on its purely physical side. It is essentially small-scale. It builds twenty houses here, forty houses there--each group vulnerable to any adjacent development because of its small size. It cannot provide the desirable group amenities because the overhead is too great for the relatively small number of houses. It cannot provide continuity because essentially its motive is to buy and sell quickly. Aside from its inability to create individual projects on an adequate scale, neither its technical personnel nor its available capital suffices to embark promptly on a large volume of work. It cannot supply a steady amount of employment, for it builds furiously in a boom market and stops completely in a depression.
A variation of private enterprise is the limited-dividend corporation which in Europe did a good deal of the housing for the top stratum of the lower-income group and for the middle-income group. Cooperatives, labor groups, industrial groups, and others, aided by government subsidies and rigidly controlled by the government, did much good work on a large scale. But it must be emphasized that even these agencies never reached 90 per cent of the low-income group, as England and Germany found, and they cannot do so here. Such corporations, building with even a 3 per cent mortgage rate, cannot provide a room rent of less than about $8 or an average monthly family rent of less than $28 including heat, or a yearly rent of less than $336. As one-fifth of income is the maximum that should be paid as rental by persons of low income, the limited-dividend corporation even with a low mortgage rate cannot properly house those with incomes of less than $1,680-which, on the basis of income figures available, shows that the lower two-thirds of the population cannot be reached without a much greater subsidy. Actual operating experience of the Hillside limited-dividend corporation in New York indicates that the $8 room rental is an understatement. With 70 cent land and a 4 per cent interest rate, rents are $11 a room. At a rate of 3 per cent, and assuming a little saving on land, rents would come to $9.80 a room. With all conceivable pinching, including smaller rooms, they might be got down to less than $9.
Let private enterprise have as large a part as it is capable of playing in a large construction program. In England, public and private housing enterprise are both at work in their respective fields, and private builders are unprecedentedly prosperous, despite the fearsome predictions often made here that the government would put private construction out of business. But the unfortunate results of trying to place it in the major or exclusive role can be seen in the operations of the FHA. This is the government agency which insures loans made by private institutions to private builders up to 80 per cent of appraised value. Originally its technicians worked out procedures for a sound program. However, the pressure to insure loans has been so great that these standards are either distorted or simply not observed. For instance, the FHA marks out "good areas" where the development seems satisfactory. In those good areas it insures loans to the builders of a few houses here and a few houses there--precisely the sort of spotty procedure that has always blighted originally good areas, and will do so again. Because of the 80 per cent loans, the shoestringers with land can get by with practically no capital of their own--the usual boom-and-collapse situation. I have seen some of the actual buildings insured by the FHA. The planning is not particularly different, the quality of construction no better than the usual speculative job--the first large development in Washington which the FHA has publicized as showing the speed of its work is particularly shoddy in quality.
As long as it bears the whole brunt of construction revival and is harried to make loans at an ever-accelerating pace, the FHA is inevitably doing the same kind of job that private lenders did under similar breakneck conditions in boom time, and it will achieve the same unstable results. But if it were considered only as one of several avenues for reviving building, if it could take the time and pains, it would have a unique chance, as the main source of funds, to improve the character of private work, though it could in no case meet the needs of the low-income group.
The new element in the situation which may force the government away from its preoccupation with private speculative building is the impending housing shortage, which may well result in a sudden upsurge that will more than supply the pressure hitherto lacking. In a price system, effective demand--that is, financially adequate demand--determines how much product will be made available. But this holds only to the point where human endurance breaks away. Ernst Kahn, certainly not an emotional or radical thinker, says, "A housing shortage, like the deprivation of any necessity, is a sizzling social and political bomb." This sudden demand or a more gradually accumulating powerful pressure we must develop if we want a housing program.
Consider the reasons we accept as sufficient to cause the formulation of a large interrelated housing policy and immediate program, and how they are answered by those unsympathetic. First there is an anticipated shortage, the reason for it being increasing number of families, high birthrate twenty years ago and consequently high marriage-rate now, marriages postponed because of depression, doubling up, six-year construction stoppage, normal elimination by fire, and so on. Various estimates indicate that a program of from 1,200,000 to 1,600,000 dwellings a year for the period 1935-45 would leave us in relatively the same position as in 1930. But the concept of shortage involves a concept of minimum standard. Standards of living and nutrition are far below 1930; why not those of housing? Shall we see simply more doubling up, more occupancy of shacks? Reemployment being the only objective, the Administration relies on the temporary volume of speculative housing for those who can afford it.
Another argument for our housing program is the social cost of bad housing in crime, in disease, in blighted lives, in gangsterism. The usual answer to this is that people with slum habits won't improve in new environments; and it would be unfair to those who invested their money in slums to stop subsidizing them by our taxes and to create good low-rental communities with the money. We must stress again the indisputable wastes of small-scale building as against large-scale community planning, both initially and in the creation and abandonment of successive ruined areas with their wasted streets and utilities. But stopping this would certainly lessen the scope of differential speculative opportunities, which would be un-American. A large steady housing program would mean a saving of money now spent on the dole. But some prefer the dole; others prefer constructing non-competitive roads, sweeping non-competitive leaves, making non-competitive surveys.
Thus the important arguments that appear self-evident to proponents are met with far different answers by opponents, by the exploiters of housing. These arguments are inherent in the formula, "Leave it to private enterprise"- a formula the government has come to adopt, retaining the verbal trimmings of better housing.
We must leave the ivory tower of good reasons, and mobilize the good reasons in terms of powerful pressure. I have indicated that I believe a sudden upsurge of such pressure is likely in the near future when physical overcrowding and misery burst the dam of economic inability. We must offer and push an immediately practicable program to provide the housing. In my next article I shall outline such a program.
