A

HOUSING

Effect of Housing Shortage on Industry

T THE convention of the American Management Association, held in New York in October, 1923, Mr. M. R. Lott, of the Sperry Gyroscope Co., presented a paper embodying the results of an inquiry into the effect of the housing situation upon wages, labor, turnover, and other conditions in industry. Data had been obtained by means of a questionnaire' sent out widely, addressed either to the chamber of commerce or some specific industry in each locality. Replies had been received from 25 cities in 16 States.

From the information received the general statement may be made that industry is experiencing unsatisfactory conditions from the shortage of houses in the Eastern and North Central States only. In that region there has been a very direct connection between the housing conditions and the wages paid80 per cent of the replies indicating that this factor had entered into wage adjustments.

Only a few replies showed that the housing situation had exerted any influence upon the hours of working, though it had a serious effect upon the availability of labor. From the Eastern and North Central States 40 per cent of the replies indicated difficulty in retaining old employees; 70 per cent had found it impossible in a normal way to care for new employees and their families; 50 per cent reported that there was a tendency for their workmen to move to suburban districts further removed from their places of employment; only 30 per cent reported employees absent frequently due to rent controversies that had been taken to court.

A decided feeling expressed throughout the country was that whenever a shortage of housing facilities exists for the worker with a moderate income, industry should take the initiative in either providing facilities for its own employees or in working with the community to correct the situation. This opinion was expressed in 76 per cent of the replies.

On this latter point there was a marked difference of opinion as to which line of action is preferable. An employers' organization of the city of Niagara Falls expresses strongly the opinion that industry itself should provide what is needed, and calls upon the employers of that city to provide at once a number of boarding houses for laborers, and "at least 100 houses costing not to exceed three or four thousand dollars."

We recommend that this number of houses be allocated among all the industries, large and small, on the basis of the number of their male employees. For the first year each industry should be asked to build one domicile or apartment for each one hundred of its employees.

The General Motors Corporation, on the other hand, feels strongly that no individual industry should be landlord to its employees, and that only as part of the community as a whole has industry any responsibility in this matter.

Industry, municipal bodies, business men-in fact the country as a wholeshould see to it that adequate shelter is provided and that rents and sales prices are within the range of existing wages. Under the present system material

costs are high and mechanics in the building trade receive the highest wage, due partly to the irregularity of employment. The greatest cause, however, of the high cost of shelter is the high interest rates, bonuses charged on loans and profits by the speculative builder, and discounting mortgages and land contracts. These items increase the cost of shelter 30 per cent over the actual cost of lot, labor, and material. It is not only the business of the industry, but also of the country as a whole, to see to it that this 30 per cent is eliminated; otherwise we will face very serious difficulties in the next few years, as the question of shelter is becoming more serious daily.

The Cleveland Chamber of Commerce goes even further, definitely stating its belief that the housing problem can not be solved by private building enterprises under existing financial circumstances. Calling attention to the fact that if workmen are to be attracted to the city to man its industries, housing must be provided for them, it declares that this end can be attained only by new means.

Either the community or the government must come to the rescue and provide houses that are within the range of price that the worker can rent or purchase, or through some control of resources make it possible to provide comfortable living accommodations for himself and family.

Report of National House Building Committee, Great Britain

HE housing situation in England since the close of the war has constituted one of the most serious difficulties confronting the successive governments. In the hope of securing a program which might be undertaken with a hope of really solving the problem, the present government brought about the formation of a committee composed of building employers and employees and another of the manufacturers and dealers in building materials, authorizing them "to study the problem as it now presents itself, and to make such proposals as they may deem suitable to enable the housing shortage to be overcome.' These committees presented on the 10th of April reports which embody the ideas of those within the industry as to what it is possible to do toward relieving the shortage.1

The report of the representatives of the building trades frankly states at the outset that the high cost of producing houses at present "is such that working-class houses can not be produced on an economically satisfactory basis, such as would induce the investment. of capital, unless a subsidy is provided by the State." The subsidy provided under the act of 1923, the committee says, is proving insufficient to accomplish the end, but it does not attempt to decide what the amount should be.

At present, neither labor nor materials can be obtained in quantities adequate for carrying out a satisfactory housing program, but the supply of both, the committee thinks, can be developed as the work progresses. As to labor, apprentices have not been coming into the building trades at a rate sufficient to keep up the supply, and there is a distinct shortage of several kinds of craftsmen, with a prospect that this shortage will extend to other lines if building should take a vigorous start. From about 1905-6 onward to 1914

Great Britain. National House Building Committee. Report on the present position in the building industry, with regard to the carrying out of a full housing program, having particular reference to the means of providing an adequate supply of labor and materials. London, 1924. 37 pp.

the building trades were overmanned and underemployment and distress were common. This, combined with the depression of the last few years, has made the building workers distrustful of the ability of the industry to absorb a large influx of new artisans, and some means of reassuring them must be found.

The organized workers view with apprehension the prospect of increasing the skilled personnel of the industry, and feel that they must have the completest assurances possible that such an increase will be satisfactorily absorbed, and that future demands for their services will be maintained at an adequate level. The committee is unanimously of opinion that the demand for such assurances is a reasonable one, and recommends that Parliament should be asked to sanction the expenditure required for a definite and continuous program extending over 15 years for the erection of an inclusive total of up to, approximately, 2,500,000 houses upon a basis of cost to be agreed.

Information gathered by the committee shows that under the 1923 act about 40,000 houses a year are being built. In view of the situation in regard to both labor and materials, it is not considered possible to undertake the full annual program at once, but the committee thinks that in 1925 a total of 90,000 houses might be built, the following year 100,000 might be produced, and thereafter the total might be increased yearly until in 1934 it would reach 225,000, at which figure it would stand until the completion of the program

in 1940.

The additional labor needed will have to be obtained, the committee thinks, from outside the present force of workers. It does not consider that it would be wise to restrict building other than houses for the sake of turning all the workers into this line. It would be better to make sure that all the house builders are engaged upon housing, and to increase the number through an active apprenticeship campaign. To accomplish this, the committee recommends that joint apprenticeship committees of employers and workers should be established in every district where both sides are organized, and that these should stimulate in every way the taking on of apprentices up to the limits of the union rules. Further, they recommend that these rules should be relaxed in several particulars. At present, the age limit for entering apprenticeship is 16; the committee advises that this be raised to 20. At present the number of apprentices an employer is permitted to take depends on the number of journeymen he employs, the ratio being frequently 1 to 4. The committee recommends that the ratio be based on the number of skilled workers in the district, and that so long as this is observed, the individual employer be allowed to take all the apprentices he will. Further, it is recommended that in certain trades the ratio be changed to 1 to 3. Also, it is suggested that under certain circumstances an apprentice who has served three years shall be allowed to apply for an examination into his skill, and that if he can pass this successfully he shall be admitted as a journeyman. Careful provision is made for the indenture and registration of apprentices, and the local committees are to be responsible for seeing that they have continuous training and employment.

These means, the committee thinks, will take care of the labor supply, and it believes that the manufacturers have a sufficient productive capacity to insure a supply of materials for such a graduated program as it proposes. But the question of costs is as important

as the question of supply, and it suggests that both wages and prices shall be controlled if necessity arises. At present wages are determined on a national basis by the National Wages and Conditions Council for the Building Industry. The committee advises that in the case of Government housing contracts it should be made illegal to depart from the wages thus fixed; i. e., bonuses when labor is in demand and wage cuts when it is abundant would both be prohibited. Prices should come under the purview of a statutory committee which should be set up to manage and coordinate the whole scheme. It is suggested that proposed increases in prices should be submitted to this body and should not be allowed to become operative until approved by it.

This statutory committee forms an important part of the whole plan. The success of the program, it is pointed out, depends on the hearty cooperation of the various parties concerned, and there will be much to arrange and coordinate. The committee therefore recommends that a national house-building committee (referred to as the statutory committee) shall be established by law, which shall have "a status and a permanency which would enable it to deal with everything arising within the industry connected with the exercise of its functions under the housing scheme." It should have wide powers.

The statutory committee so set up should be given power to obtain any information which it deems necessary from housing contractors and others. Its proceedings should be given the requisite amount of publicity to insure the maintenance of public confidence. It should be consulted in regard to the consideration of design as affecting economy of construction, as to the method of obtaining competitive tenders and of placing contracts, also as to the method of

insuring prompt settlement of accounts. * ** *

* * *

The statutory committee should be invested with powers in order to prevent, wherever possible, unduly increased charges being added as from 1st March, 1924, not justified by increased cost of labor and raw materials.

The report also contains a study of the supply of building materials available, the amount which would be needed for the proposed program, and methods of securing the increased production.

The report is attracting much attention, as it is the most comprehensive and ambitious program which has yet been brought before the public. It is under discussion in Parliament, and is expected to serve as a basis for Government action.

D

State Aid to Housing in Scandinavian Countries and Finland1

Sweden

URING the three years 1917 to 1919 the Swedish Parliament appropriated for housing grants the sums of 4,000,000, 3,000,000, and 2,000,000 kronor, respectively. During this period amounts were granted by the State up to two-ninths and by the commune up to one-ninth of the cost of the houses. During the succeeding three years appropriations for this purpose amounted to 4,000,000, 6,500,000, and 1,500,000 kronor, respectively; individual

Data are from Denmark [Indenrigsministeriet), Meddelelser fra Socialraadets Sekretariat, February, 1924; and Finland, Socialministeriet, Social Tidskrift, No. 2, 1924; Norway, Departementet for Sociale Saker, Sociale Meddelelser, No. 2, 1924. 2 Krona at par=26.8 cents. Exchange rate varies.

grants could not exceed 15 per cent of the building costs, or 4,500 kronor per dwelling.

Beginning with the year 1920 the State also began to assist housing by making ordinary loans, and the State housing loan fund was established, receiving an initial amount of 15,000,000 kronor. In 1923 the funds in the possession of this body amounted to 48,500,000 kronor.

During 1923 the fund made loans totaling 10,000,000 kronor toward housing projects. In 1923, also, 3,000,000 kronor was made available, from appropriations of previous years, for extra grants for houses built with State assistance in 1920-21, such additional allowances not, however, to exceed 10 per cent of the building costs, or 3,000 kronor per apartment.

Regulations governing housing loans were issued by royal decree of June 15, 1923. Loans are made either to the commune or, if the commune gives security for the whole loan, to associations or private persons; preference is given to public building enterprises or to associations which grant the occupant an owner's rights or other permanent rights to the apartment.

Loans bear no interest the first year, but thereafter draw 5 per cent annually. (In 1923 this rate was temporarily reduced to 4 per cent.) Amortization payments begin the seventh year, 7 per cent per year being paid.

Under the regulations, second-mortgage loans may not exceed 50 per cent of the building costs (not including cost of land) or 12,000 kronor per dwelling. In practice, however, such loans have been made ranging up to 80 per cent and sometimes 90 per cent of the building cost.

Norway

FOR several years the Norwegian Government has made grants in cash toward housing projects. Such grants, however, may not exceed 20 per cent of the building costs (including cost of land) nor, as a rule, 6,000 kroner per house or 3,000 kroner per apartment where the building contains several apartments.

The grants may be made to communes, building associations, or private persons. In the last two instances the State aid may not, in general, exceed the amount granted by the commune in the form of money, land, or building materials at reduced prices. In communes financially unable to render such assistance this requirement may be set aside and the sum the State contributes may exceed 20 per cent but not 40 per cent of the building costs.

State grants are as a rule made only for small dwellings not exceeding 150 square meters floor space.

Houses built with the aid of public money may be sold only with the consent of the State, and the selling price may not exceed the building costs minus State and commune aid. Rents are also controlled.

For 1919-20, 1920-21, and 1921-22 the State appropriated a total of 17,000,000 kroner to be used for housing grants. Further appro

3 Dwelling usually means a unit occupied by a family.

4 Krone at par = 26.8 cents. Exchange rate varies.