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From the collection of the 


o Prelinger 
v Jjibrary 
t P 

San Francisco, California 




Nathan Straus, Administrator 

Washington, D. C, 1938 

For sale by the Superintendent of Documents, Washington, D.C. 
Price 20 cents. 


USHA? 1 

1. Slum conditions are nation-wide. 2 

2. Private builders alone are not able to 

supply decent homes for those who live 

in the slums. 3 

3. The housing shortage grows more acute. 8 

4 . Unemployment of capital and labor in the 

building industry threatens national 
prosperity. 10 

5. Cities cannot solve the housing problem 

alone. 10 

6. Every section of the country has felt the 

need for national aid to slum clearance 

and low-rent housing. 12 

7. Congress was right! 13 


1. The USHA assists local public housing 

authorities. 16 

2 . The localities must do their part. 17 

3 . A simple example of how the USHA plan 

works. 19 



1 . How many families in your toivn live in 
substandard homes that is, homes 
which make a "decent American stand- 
ard of living' impossible? 33 



2 . How much money is your city government 

spending for health, law enforcement ', 
fire fighting, and other services in areas 
of substandard housing? Is the per 
capita cost higher than elsewhere! How 
much of this extra cost is directly due 
to bad housing conditions? 36 

3. How much of the area of your city is 

economically "blighted" and how 
rapidly is this condition spreading. 40 

4. Is the present trend of construction ac- 

tivity in your city helping to solve the 
slum problem? Are there signs of a 
general housing shortage? 42 

5. What would the housing program mean 

to your city in terms of re-employ- 
ment? 45 



1 . Building costs are economical and projects 

are simply designed. 53 

2. Projects assisted by the USHA will re- 

house families who live in the slums. 62 


1. Public housing stimulates private enter- 

prise. 74 

2. Public housing is a wise investment for 

the taxpayers. 79 



Within a few short years the movement for low- 
rent housing and slum clearance has taken firm root 
in America. Not so long ago it was simply the hope 
of a few scattered specialists. Even when Senator 
Wagner put in his first housing bill in 1935 the pros- 
pects for housing reform were both dim and distant. 
Today it is already an accepted part of the normal 
administrative responsibility of the Nation. 

What brought about this rapid progress? Pri- 
marily, without doubt, the foresight of President 
Roosevelt, under whose leadership the Federal Gov- 
ernment engaged in numerous valuable experiments in 
the housing field, and without whose active concern 
the Housing Act could hardly have become law. 

In support of the President's initiative, and in 
recognition of the mounting array of facts about the 
nature and extent of the housing problem, the tide 
of public interest steadily deepened and broadened. 
To the voice of specialists and experts were added 
the insistent demands of labor and consumer organi- 
zations and local officials. The country wanted to 
see something done about the slums. 

Nevertheless, when the United States Housing Act 
was passed one major question had still to be an- 
swered. Ours is a decentralized program in which 
the responsibility for carrying out housing programs 
rests not with the USHA but with the communities 
themselves. And national enthusiasm "in favor of" 
an idea does not necessarily imply willingness and 
ability on the part of local governments to undertake 
heavy responsibilities in a new field. 

As I write this preface, the USHA program has been 
in operation for almost exactly one year. The pro- 
gram depends for success entirely on local partici- 

pation, on official action by local governments, and 
informed support by citizens. What is the record? 

The States have acted: New enabling legislation has 
been passed and old legislation has been perfected. 
Courts have upheld the constitutionality of State 
housing legislation. The cities have acted: There 
are today about five times as many local housing 
authorities as there were a year ago. All the strin- 
gent conditions set forth in the Housing Act are being 
successfully met by virtue of energetic work. Almost 
the entire amount of available funds has been ear- 
marked. Loan contracts are being approved at the 
rate of $30,000,000 a month. About 5,000 dwellings 
per month are going under construction. 

And citizens are supporting their own local housing 
and slum clearance programs, not merely with pas- 
sive approval but also by study and real work. 

This pamphlet is in fact the result of hundreds 
of specific requests received from individuals and 
organizations who are either working for the estab- 
lishment of housing authorities, or endeavoring to 
understand and participate in their authority's work. 
Thousands of serious and very realistic questions 
have been asked us questions which deserve honest 
and serious replies . It is hoped that this pamphlet will 
help interested citizens to answer three of the main 
questions about the public housing program . . 
What is it? Do we need it 7 . And, how does it work? 

In a later pamphlet we expect to explain in simple 
terms some of the conclusions reached by Federal 
and local technicians with respect to such matters 
as site selection, community planning, dwelling de- 
sign, and management. 

NATHAN STRAUS, Administrator, 

United States Housing Authority, 

November 1, 1938. 


/. Why Did Congress 

Create The USHA? 

In 1937 Congress passed the United States Housing 
Act. For 3 years before that, one of the most impor- 
tant committees of Congress had held extensive hear- 
ings to determine whether this law was necessary. 
This committee was the Senate Committee on Educa- 
tion and Labor, and its unanimous report in favor of 
the law, a report which everyone ought to read, said: 

"There is no immediate aim of the American people 

more widely supported and more insistently 

voiced than the desire to attack the social evils of the slums 

and to provide decent living quarters for . . . the 


The broad objective of this law was to provide for 
American families who now live in slums the kind of 
homes worthy of the citizens of a free and wealthy 
Nation. This broad objective represented one of our 
oldest traditions as a people who have always put the 
home first. But in its details the law represented a 
new step, a new assumption of public responsibility, 
a new attitude. What are some of the facts which 
convinced Congress that housing has become a 
national problem? Why do slum clearance and decent 
housing for the lowest income groups require the 
highest cooperation of Federal, State, and local 
Governments, plus the intelligent support of the 
people themselves in their individual exercise of 
citizenship, just the same as defense, education, 
highways, health, and social security? 


Slum conditions are nation-wide. Until a very few 
years ago the facts about housing conditions were so 
scattered and incomplete that no conclusions could be 
drawn from them. It was still generally assumed that 
every honest person willing to work would sooner or 
later be able to acquire one of the bright Dream Cot- 
tages of the advertising pages, and thus live happily 
ever after. But in 1933 the Department of Commerce 
made a Real Property Inventory, covering 64 cities in 
every State in the Union. A rural housing survey was 
made at the same time. The results of this painstaking 
effort shocked the country out of its easy optimism. 
It was conclusively shown that at least one-third of 
the homes of the Nation were definitely below any 
standard which could be accepted as "decent" or 
"American," and that at least one-tenth were danger- 
ously unsafe. All of these substandard dwellings 
lacked the most elementary sanitary facilities and 
conveniences, or were so overcrowded as to threaten 
the treasured individuality of family life. 

The interest aroused by this pioneer study caused a 
number of additional cities to undertake similar sur- 
veys with the aid of the WPA. Today figures are 
available for 204 localities, covering more than 
5,000,000 residential buildings and more than 8,000,- 
000 households, or more than half the urban families 
in the United States. Some of the more salient figures 
may be summarized as follows: 

Structural condition. About 1,100,000 homes (in 
830,000 buildings) had such serious structural defects 
that they were unsafe or absolutely unfit for use. 

Sanitary facilities. 1,661,000 homes, or about one- 
fifth of the total, had no private bathing facilities; 
1,221,000 were without private indoor water closets. 

Privacy and overcrowding. About 850,000 families 
were "doubled up" that is, shared their homes 

with other families. Over 1,300,000 homes were 
"crowded" that is, had more than one person per 

It was disclosures such as these (which have since 
been reinforced by the National Health Survey, con- 
ducted by the United States Public Health Service in 
83 typical cities) that quickened the public interest, 
long felt but never before fully expressed, in the 
social consequences of the slums. Cities made "spot 
maps" of cases of juvenile delinquency, crime, infant 
mortality, rickets, and T. B. and other communicable 
diseases. They compared the costs of police and 
health services in different areas. And the results 
were everywhere the same. The bad housing areas, 
the social problem areas, the areas of relatively high 
municipal costs and relatively low returns, were all 
practically identical. Proof became plentiful of what 
thoughtful people before had only guessed: That 
while the great majority of those who live in the 
slums are fine and desirable citizens, none the less 
when you plant an infant in sickening surroundings 
you make it harder for him to grow up strong. And 
when you lead children into a Dead End Street you 
increase the risk that some of them may not rind a 
law-abiding way out. 

These are some of the facts which led the Senate 
committee to say: 

' ' If is now a matter of general agreement that even before 
the depression commenced over 10 ,000, 000 families in 
America, or more than 40,000,000 people, were subjected to 
housing conditions that did not adequately -protect their 
health and safety.' ' 

Private builders alone are not able to supply decent 
homes for those who live in the slums. Here we get 
to the heart of the "housing problem." Careful ex- 

SLUMS: The West 

LUMS: The North 


SLUMS: The East 


animations have been made of the production by pri- 
vate enterprise of new homes at current costs and 
prices. These studies have been directed by econo- 
mists, public officials, and businessmen by liberals, 
radicals, and conservatives and yet they have all 
come very close to the same answer. By and large, 
even in prosperous times, at least two-thirds of our 
total population cannot afford the rent or sales price 
of a decent new home, however modest. And for 
this reason, private enterprise cannot afford to build 
homes for their use. 

Figures on a national basis must be used with care, 
because of the great variations between one city or 
region and another. But the following chart pre- 
sents a picture that is fundamentally true. 

The chart shows that in 28 representative cities, 
only about 8 percent of the dwellings constructed 
from 1929 to 1935, inclusive, were within reach of 
the 65 percent of families with annual incomes under 
$1,500. For these families, 3,579,773 in number, only 
21,351 dwellings that they could afford to live in were 
built in 7 years. 

Consider the contradiction! A home is something 
which everyone needs. Its quality affects the very 
foundations of civilization. Its production should 
be the cornerstone of national prosperity. And yet 
the home-building business in America has become a 
"luxury trade," producing homes only for those in 
the upper income brackets. 

Again there were facts to back up the Senate com- 
mittee when it found that public housing offered no 
possible competition to private enterprise and when 
it said: 

"The time has come to helf first those who 

need help most - - the evidence is well-nigh over- 





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whelming that these groups will be overlooked if the Govern- 
ment does not flay a reasonable part in their inclusion." 

The housing shortage grows more acute. If enough 
new dwellings were built, even if they were occu- 
pied at first only by the well-to-do, some gradual 
progress for all income groups of families would be 
at least theoretically possible. While the slums would 
still remain, some families in the very low income 
brackets might sift upward into slightly better quar- 
ters left vacant by more prosperous families. 

But when builders do not construct as many new 
homes as there are additional families seeking sepa- 
rate dwellings, then the housing problem takes on 
emergency proportions. 

In the Senate committee report a startling but 
authoritative forecast of this emergency was pre- 
sented. Bringing this estimate up to date, in round 
numbers, it is found that more than 3,000,000 new 
dwellings would have been required merely to house 
additional families at the occupancy standard of 
1930, without any allowance for demolition. But 
the number of dwellings built since 1930 is no more 
than 1,000,000 and several hundred thousand homes 
have probably been demolished in the same period. 
In addition, at least 10 percent of existing dwellings 
today are so unsafe and insanitary that they demand 
immediate closing, which adds more than 3,000,000 
dwelling units to the country's present needs. And 
by 1950 the increase in families and the wearing out 
of existing homes will necessitate still another 
10,000,000 dwellings. 

In all, with about 16,000,000 new dwellings re- 
quired by 1950, America needs to produce homes at 
the rate of more than a million a year. Yet building 
has been going on at only one-seventh this rate. It 



THE RECORD, 195O 1958 



1.000.000 DWELLINGS 



NOTE. I black house indicates 1,000,000 dwellings built. 

1 outline house indicates 1,000,000 dwellings needed. 
SOURCES. Estimates of need derived from report of the Senate Committee on 

Education and Labor, on the U. S. Housing Bill of 1937. 
Estimates of new construction derived from Building Permit Data, 
Bureau of Labor Statistics. 

has taken 7 whole years from January 1931 to Jan- 
uary 1938 to build a million homes. And in 1937, 
despite talk of a building boom, only 294,000 dwell- 
ings were constructed. 

This dearth of new construction is resulting in an 
acute Nation-wide housing shortage. Figures col- 
lected by the Department of Commerce from door-to- 
door surveys made in 69 cities show that during the 
period 1930 to 1937, vacancies dropped from an aver- 
age of 8 or 9 percent to about 2 or 3 percent. When 
the general vacancy ratio is this low, the number of 
decent homes available to families of moderate means 
is likely to approach zero. 

And this is why the Senate committee said: 
"From all -farts of the country today come reports of an 
impending housing crisis. Shortages are producing evic- 


tions and rapid increases in rents; rents increasing more 
rapidly than wages are forcing down standards of living, as 
less money is left available for food and clothing and the 
other necessities of life. Bad housing conditions are spread- 
ing and the iniquities of the slums are multiplying. Action 
must not be delayed. 

Unemployment of capital and labor in the building 
industry threatens national prosperity. There is today 
practical unanimity of opinion that building is a 
barometer of general business conditions. The health 
of the entire economic system is threatened so long as 
the construction industry remains sick. Speaking in 
1938, Senator Robert F. Wagner, sponsor of the United 
States Housing Act, summarized common knowledge 
when he said: "The steep decline in home building 
beginning in 1925 was the forerunner of the depression. 
The decline in manufacturing production began in 
1929, at the very time that residential construction fell 
below normal. When the upswing in residential con- 
struction beginning in 1934 practically stopped in 
1937, the warnings of a new recession were at hand." 

Today over a million building trades workers are 
jobless. Every time a man in this key trade goes 
back on the payroll, the indirect effects travel imme- 
diately to dozens of other types of enterprise. The 
Senate committee recognized this condition when it 

. the genuine development of quarters for 

people of low income . . . will remove one of the most 
serious forces now operating against complete economic recov- 
ery , and will introduce into that economic recovery a truly 
stabilizing influence. 

Cities cannot solve the housing problem alone. East 
and West, North and South, cities large and small 
have for years felt the challenge and menace of the 




1925 '26 '27 '28 '29 '30 '31 '32 '33 '34 '35 '36 1937 

SOURCES. (1) "Volume of Residential Construction, 1920-37," 
Bureau of Labor Statistics, 1938. (2) "Survey of Current 
Business," Federal Reserve Board Index. 

slums. Recent studies have shown that municipali- 
ties are spending many times as much per capita, 
excluding relief costs, in the slum areas as elsewhere. 
And every mayor and council knows full well that 
money and work and lives are wasted in a hopeless 
war against an ever-increasing evil so long as the 
slums remain. 

But the best building codes, the wisest zoning reg- 
ulations, and the most ambitious municipal condem- 
nation and demolition programs can never do more 
than scratch the surface of the slum problem unless 
new homes are built. Hampered by their limited 
taxing powers, their constitutional debt limitations, 


and their inescapable obligations for other public 
services, the municipalities are powerless to finance 
public housing alone. Having struggled earnestly 
but unavailingly with the slums for half a century, 
the cities convinced Congress by the weight of facts, 
not that cities have no responsibility toward people 
in the slums, but rather that they cannot fulfill that 
responsibility without national aid. 

Every section of the country has felt the need 
for national aid to slum clearance and low-rent 
housing. During the long congressional hearings cit- 
izens in all walks of life marshalled their facts in 
support of the housing program labor leaders desir- 
ous of increasing employment and improving labor's 
living conditions, doctors and criminologists inter- 
ested in doing away with the slums because they 
aggravate disease and crime, businessmen who want 
to stimulate industry and to escape the costly tax 
burdens of extra police, fire, and health services in 
slum areas, and municipal officials anxious to stop 
pouring public funds into the bottomless pit of the 

Summarizing this wealth of evidence, the Senate 
committee said, and Congress agreed: 

"The long-range and carefully -planned housing pro- 
gram by stimulating the durable-goods indus- 
tries , now lagging furthest behind in the recovery drive, and 
by facing the problem of technological unemployment 
will create jobs in private industry for a large 
percentage of the men and women still idle and dependent 
upon public relief no matter how overwhelming their desire 
to earn a decent living in a normal way. And at a cost 
much cheaper than the terrible social and business toll of 
unhealthful housing in terms of disease, crime, and malad- 
justment it will provide better living quarters for millions 
who now dwell in dismal and insanitary surroundings." 



January through June 1938: Each full circle represents the $500,000,000 authoriza- 
tion then available. 

Beginning with July 1938: Each full circle represents the $800,000,000 authoriza- 
tion then available. 

BLACK. Loan contracts approved. 

HATCHED. Earmarkings outstanding. 

WHITE. Balance of authorization unallocated. 

Congress was right! The moment Congress gave 
the signal, the USHA program got under way. 

Local communities, eager to begin housing with- 
out delay, began to set up their authorities at the 
rate of 20 a month, under laws in 33 States enabling 
the cities to take this action. Within 10 months 
there were about 200 of these local agencies, and 
two-thirds of them had received earmarkings of 
funds. New loan contracts signed soon rose to the 
fairly constant level of about $50,000,000 a month. 
Day by day the work of demolishing substandard 
areas, awarding building contracts and beginning 
construction took on Nation-wide momentum. 

Many new developments promised well for the 
future of the low-rent housing program. Nine State 
Supreme Courts handed down favorable decisions on 
the constitutionality of State housing legislation. 
The building trades unions passed resolutions to co- 
operate with the local housing authorities in guaran- 


teeing construction schedules. Almost overnight, the 
USHA program became front page news in hundreds 
of cities and towns. Housing and slum clearance 
developed into a local issue of major importance. At 
public meetings, in union halls and business offices, 
across the dinner table and on the street corner, public- 
spirited citizens discussed methods of using the USHA 
to best advantage. 


//. What Is the USHA Plan? 

The United States Housing Authority is the first 
permanent public agency created by Congress to re- 
house families who live in the slums and nobody else. 
The statute under which it operates is the first full- 
fledged recognition in the United States of the ulti- 
mate responsibility of our civilization to provide 
decent homes for all our citizens. The United States 
Housing Authority must be sharply and clearly dif- 
ferentiated from other agencies of the Government 
directed toward the solution of other types of housing 

The Home Owners' Loan Corporation (HOLC) 
came first in point of time. It was an emergency 
measure, designed to check evictions, and to help 
families who could afford decent homes in normal 
times hold on to their homes in times of panic and 

The Federal Housing Administration (FHA) came 
second. It was established to encourage the flow of 
private capital into the large scale and small scale con- 
struction of homes for families with enough income to 
have credit standing, and to protect these families 
from unfair or exorbitant credit practices. 

The United States Housing Authority (USHA) ex- 
ists solely to rehouse the lowest income third, the fam- 
ilies who live under conditions which endanger their 
health, exert a poisonous effect upon whole com- 
munities, and lower the living standards of the 
Nation. The USHA uses public funds, because it has 
been proved that in the absence of public funds "one- 


third of a nation" has been sentenced irrevocably to 
live and die in the slums. It is a permanent agency, 
because all America, in good times as well as bad, has 
a permanent interest in lifting these millions of 
families out of the slums. 

The USHA is different from the former PWA Hous- 
ing Division. The PWA Housing Division built 51 
slum clearance and low-rent housing projects in 37 
cities and in Puerto Rico and the Virgin Islands. 
These projects were planned, built, owned, and 
operated by the Federal Government. They repre- 
sented a highly centralized housing program. That 
program is ended, and the USHA is charged with the 
responsibility of operating the former PWA housing 
projects only until they can be leased or sold to the 
localities. More than half of these projects have 
already been leased to local authorities. 

The United States Housing Authority program is 
entirely decentralized. The USHA cannot turn a single 
spadeful of dirt or lay a single brick. It is purely a 
financial-assistance agency, which makes loans and 
subsidies to local public housing authorities. These local 
public housing authorities, arms of the cities, plan 
and build and own and operate every single USHA 
assisted low-rent housing project. In establishing the 
USHA, Congress wrote into law the view of the 
Senate committee that 

housing ... . should spring from local 
initiative and the voluntary wishes of the people in their 
respective communities. 

The USHA assists local public housing authorities 

in two ways. First, the United States Housing 
Authority makes a loan to the locality to build a low- 
rent housing project. This loan covers not more 
than 90 percent of the total development cost of the 


project, including land, and runs for not more than 
60 years at very low interest rates. (The interest 
rate is the going Federal rate of interest plus one half 
percent, amounting usually to 3 to 3% percent.) 
For such loan purposes the USHA has $800,000,000. 
Secondly, after the project is built and tenanted, the 
USHA pays equal yearly subsidies to the project, 
called annual contributions ', to help bridge the gap be- 
tween the total annual charges against the project, 
including debt retirement, maintenance and opera- 
tion, and the rents which slum dwellers can afford to 
pay. The annual contributions paid to a project in 
any one year cannot exceed the going Federal rate of 
interest plus one percent upon the total development 
cost of the project (amounting usually to 3% to 3% 
percent of the development cost, or $35,000-$37,500 
annually on a $1,000,000 project). For these sub- 
sidies the USHA at present is authorized to spend 
$28,000,000 per year. 

The localities must do their part to get USHA aid. 
In order to participate in the program, each locality 
must meet the basic requirements of the United 
States Housing Act. To do so, the community must: 

(1) Establish a local housing authority under a 
State enabling act. Such acts now exist in 33 States. 

(2) Prove that there are low income families in 
the locality who cannot afford decent housing built 
by private enterprise and whose needs will be met by 
the proposed project. 

(3) Raise 10 percent of the development cost of 
the project to supplement the 90 percent loaned by 
the USHA. This is not difficult, because the money 
may be obtained in the form of a sound, interest- 
bearing loan, secured both by the revenues of the 
project and by the USHA annual contributions. 


Private capital has shown great interest in this type 
of investment. 

(4) Make local annual contributions to the proj- 
ect to help reduce rents. Under the act, these local 
annual contributions (a) must equal at least one-fifth 
of those made by the USHA, and as a separate test of 
adequacy () must be sufficient along with the USHA 
annual contributions to insure that the project will 
have very low rents and rehouse slum dwellers. This 
requirement is generally satisfied in the form of com- 
plete local tax exemption granted to the project. 
This tax exemption is authorized in practically 
every State statute authorizing the creation of local 
housing authorities. Sometimes, where consistent 
with sufficiently low rents, the project pays to the 
city small annual service charges or "payments in 
lieu of taxes." 

(5) Retire from use a number of slum dwellings 
substantially equal to the number of new dwellings 
to be built. This may be accomplished by demoli- 
tion, condemnation and effective closing, or com- 
pulsory repair or improvement, and may be deferred 
in case of a housing shortage. This equivalent 
elimination of slum dwellings may take place in 
whole or in part on the site where the new project 
is to be built, or on some other site, but in all cases it 
must be carried forward. 

(6) Keep costs down. No project is to cost more 
than $4,000 per family dwelling unit or more than 
$1,000 per room (excluding land, demolition, and 
non-dwelling facilities). In cities where the popula- 
tion exceeds 500,000, these limitations are raised to 
$5,000 and $1,250, respectively. 

(7) Pay prevailing wages on all projects assisted 
by the United States Housing Authority. 


A simple example of how the USHA plan works 

is as follows. Recognizing the need for a slum clear- 
ance and low-rent housing program, the city of Louis- 
ville created a local housing authority in accordance 
with the provisions of the State housing legislation. 
The procedure for creating the local housing authority 
was extremely simple, as is the case in all States with 
enabling laws. It was accomplished by the adoption 
of a resolution by the city council declaring that there 
was a need for the authority, and the appointment of 
the members of the authority by the mayor. 

The authority as a result of its studies determined 
that there was need for low rent housing in the city, 
including a project which would provide housing at a 
monthly rent of approximately $4 per room or $16 
per family dwelling unit, in order to meet the pocket- 
books of families in the slums with annual incomes 
of less than $800. 

After having received an earmarking from the 
United States Housing Authority for this project, 
and after having completed preliminary estimates and 
studies, the local authority in February 1938 filed an 
application with the USHA requesting financial assist- 
ance. The project was planned to include 3,298 rooms 
in 814 family dwelling units with an average of 4 
rooms each, and to cost approximately $4,734,000. 
The USHA reviewed this application, approved the de- 
termination of the local authority that there was need 
for the project, and found that the project would 
meet the requirements of the United States Housing 
Act. Thereupon, the USHA entered into Loan and 
Annual Contributions Contracts with the local au- 
thority, after these contracts had first been approved 
by the President. 

Under the Loan Contract, the United States Housing 
Authority agreed to make a loan of $4,261,000, 


representing 90 percent of the estimated development 
cost of the project, at an interest rate of 3 percent 
and with principal repayments extending over a period 
of 60 years. The local authority without difficulty 
obtained assurances from private investors that they 
would make a loan to the local authority in an 
amount sufficient to finance the other 10 percent of 
the development cost of the project. 

While the loan from the USHA, supplemented by 
the 10 percent local loan, would have made it possible 
to construct the project, it would not have been 
possible on this basis alone to achieve the desired 
result of low rents. Upon completion of the project, 
annual debt service on the loans (including both the 
USHA loan and the local loan) would amount to 
about $173,000. Annual operating costs would come 
to approximately $150,000. Taxes on the project if 
collected at the usual rate would be around $89,000. 
Thus the total annual charges against the project 
would be about $412,000. In order to meet these 
charges in the absence of any subsidy, the local author- 
ity would have to charge a monthly rent of $42 per 
dwelling unit or approximately $10.50 per room. 
This would serve an income group above the $2,100 
a year level, or more than two and a half times the 
income level of the slum population in the locality. 

In order to reduce the rent to a figure which very 
low income groups could afford, the United States 
Housing Authority and the city of Louisville each 
agreed to provide annual subsidies to meet a portion 
of these annual charges. Under the Annual Contri- 
bution Contract, the USHA agreed to pay annually 
to the local authority during the entire life of the 
project an amount equal to 3% percent of the devel- 
opment cost of the project, or about $165,000 per year. 
The city of Louisville's agreement to help the project 








involved no actual outlay of funds. It took the form 
of complete tax exemption as authorized under the 
State law. This tax exemption had an annual value 
in excess of the specific minimum statutory require- 
ment that the local contribution be at least 20 per- 
cent of the USHA annual contribution, but was 
essential to meet the general requirement of the act 
that the rents be within the reach of families living 
in the slums. The city was quite willing to take 
this action, realizing that the immense benefits of the 
project to the whole community far outweighed a 
hypothetical tax levied against a project that would 
not have been built at all without USHA assistance. 

With the benefit of the USHA annual contributions 
and the local annual contributions, the local authority 
will need only to collect rents sufficient to meet annual 
charges of $158,000. This can be accomplished by 
monthly rents of approximately $4 per room or $16 
per dwelling unit. Thus, the cooperation of the local- 
ity and the USHA will reduce the monthly payment 
paid by the family from the "economic" rent of 
$42 to the "social" rent of $16. This social rent 
will meet the needs of families living in the slums 
with annual incomes below $850. 

In connection with this particular project, the 
Louisville Authority complied automatically with 
the equivalent elimination requirement of the act, 
since clearing the slum site selected for the project 
involved the demolition of slum dwellings substan- 
tially equal to the number of new dwellings contem- 
plated. If the local authority had selected a vacant 
site, the equivalent elimination would have been pro- 
vided for in a contract between the city and the local 
authority under which the city would have agreed to 
eliminate an equal number of slum dwellings within 
a certain period after the completion of the project. 


In designing the project, the local authority kept 
well within the statutory cost limits, the estimated 
cost being $902 per room and $3,656 per dwelling 
unit (excluding land, demolition and non-dwelling 

Immediately after the execution of the Loan and 
Annual Contribution Contracts, the Louisville Au- 
thority proceeded to take the necessary steps pre- 
liminary to actual construction, including the ac- 
quisition of the site, hiring of the architects, prepara- 
tion of plans and specifications, etc. To get the neces- 
sary funds to finance the expenses of these preliminary 
steps, the local authority obtained advances of funds 
from the USHA from time to time as they were 
needed. The development of the project was soon 
well under way. Upon completion it will be owned 
and operated entirely by the Louisville Authority, 
and will receive the annual contributions from the 
United States Housing Authority and the full tax 
exemption from the city, which guarantee that 
inhabitants of the slums shall be rehoused. 


Demolition of slums goes ahead on two sites, in Chicago 
and Syracuse. This is Chicago 's fourth low rent housing 
project, first for Syracuse. 

Not all blighted areas are slums. The new Buffalo 
housing project means real civic improvement in flace of 
an abandoned penitentiary and the remains of the old Erie 
Canal. One of Philadelphia's low-rent projects (top) will 
be built on a reclaimed cemetery site. 

Splintering wooden buildings in Charleston, S. C., and 
Columbus , Ohio. New low-rent housing, soundly built 
and -permanently -protected from blight, will arise in both 
areas on the sites shown in these -photographs. 

Typical Louisville slums which will be cleared to make way 
for the city' s new low-rent housing projects. 

Meeting Street Manor, Charleston^ shows how simfle, orderly 
planning can result in a -pleasant neighborhood. Below: 
chaos on the site of low-rent -project now under way in Mobile. 

Stanley Holmes Village^ Atlantic City^ be j ore and after. 

Substantial fireproof homes will replace these jerrybuilt 
houses in Youngs f own, Ohio, (above) and Mobile, Alabama. 

///. Does Your City 

Need Public Housing? 

General truths, and even solid statistics, are never 
as illuminating as direct personal experience. In 
every city in the United States, many a private citizen 
and public official has realized the urgency of the 
housing problem through some simple every-day 

A housewife calling to get her laundry, finds the 
laundress' baby sick of a serious contagious disease 
in the same dark room with the sheets and table linen 
going out to homes all over the city. A banker, 
turning down a loan, suddenly realizes that three- 
quarters of his city is no longer "sound" for resi- 
dential investment. A child is run over Why? 
Because his mother chased him out of the stuffy 
flat to play, and there was nowhere to go but the 

A public official wants to show a skeptical foreign 
visitor the great advantages and far-famed success of 
the American way of doing things. Where should he 
take him? After a brief tour of the city hall, the new 
post office, the zoo, a nonstop parkway, and a few 
bridges, the visitor is driven to the country club by 
a roundabout route, in order to avoid as much as -pos- 
sible of the seamy residential districts which suddenly 
seem to blanket the town. Over the refreshments, 
the foreigner relates how his city Manchester, Stock- 
holm, Amsterdam, Glasgow, London, or any one of 
numerous towns with deep rooted democratic insti- 


tutions and flourishing private enterprise has re- 
housed perhaps 20 percent of its entire population, 
cleared up miles of slums, and employed its building 
workers continuously on well-planned modern com- 
munity housing projects which are permanent civic 
assets and even attract the tourist trade. 

Or an industrialist, enlarging his plant, needs some 
specially skilled workers employed in another town 
and offers them higher wages. They reply that they 
prefer to stay where they are, due to the lack of 
decent homes available at reasonable rents in the in- 
dustrialist's town. 

Or a bricklayer, out of work, sits on his front 
porch. He looks at his house and the other houses 
on his street all old, verminous, sagging, and ob- 
solete. His neighbor, who works in a steel mill, is 
being let out next week. And yet, he suddenly real- 
izes, no one on that whole street has ever lived in a 
new house, or been "in the market" for brick walls 
or steel beams. 

Or a public health officer, thinking up arguments to 
present to a hostile council on behalf of the increase 
in his next year's budget, is struck with the thought 
that most of this increase will be poured into one slum 
area, without either curing present ills or preventing 
future sickness. 

In more than 200 cities already cooperating with 
the United States Housing Authority, these personal 
experiences have been welded together into an un- 
answerable mass of facts. A few, once their curi- 
osity was aroused, spent more money and collected 
volumes of valuable and highly specialized informa- 
tion. In no case has honest study resulted in the 
belief that no action is necessary. 

The greater the knowledge of the facts about housing, the 
more imperative has appeared the need for housing. 


Some of the questions which these alert cities have 
asked themselves are printed below. Almost all the 
examples cited in answer have been taken from appli- 
cations for immediate assistance officially submitted 
to the USHA by local housing authorities. The 
cities referred to in the following pages are not 
chosen because they have the worst slum conditions 
in America. Many of them have not. They are cited 
because, like a number of others, they have had the 
courage and the progressive vision to learn the truth 
about themselves, and to do something about it. 

Ask these questions about your own city. 

If your State has passed no legislation enabling local 
housing authorities to be set up, or if your city is still 
undecided about its course of action, these questions 
may help you to make up your own mind. If there 
is already a housing authority in your town, these 
inquiries will enable you to understand better the prob- 
lems it is facing and the decisions it will have to make. 

How many families in your town live in substandard 
homes that is, homes which make a "decent American 
standard of living'* impossible? A dwelling can be 
substandard in a number of different ways. It may be 
so dilapidated as to endanger the lives of its occu- 
pants sometimes because it is crumbling with age 
but more often because of jerry-built construction 
and neglect. In the Real Property surveys, the pro- 
portion of dwellings classified as "unfit for use" 
or "in need of major repairs", and therefore con- 
sidered unsafe, is often just as high in the younger 
cities west of the Mississippi and in the Southwest as 
it is along the Atlantic seaboard. In Omaha 27 per- 
cent of all rented dwellings, and in Austin a like 
percentage of all homes, fell within this unsafe class. 
Of the 999 dwellings surveyed in Louisville's East 


End, many of which have since been acquired and 
demolished with the aid of the USHA, 920 were struc- 
turally substandard, with sagging floors, caved-in 
walls, and leaking roofs. Outright fire-traps include 
New York's notorious "old law" tenements, the 
wooden tenements of New England's mill towns, 
and the 2- or 3-decker wooden flats, set a few feet 
apart and dry as dust, found in the Middle West. 
The row houses and flats built in solid blocks in 
San Francisco also constitute a serious fire hazard. 

Less dramatic at first glance, but probably even 
more serious, is the lack of running water and ele- 
mentary sanitary facilities. In New Orleans slum 
areas to be reconstructed under existing loan con- 
tracts with the USHA, there are instances where as 
many as forty persons have shared two common toilets 
in the backyard. In Youngstown, 7,264 houses 
have no bathing facilities, 1,602 have no running 
water and almost 2,500 have no private toilets. In 
this city, a notorious slum has already been de- 
molished to make way for a modern low-rent housing 
project. Thousands of "shotgun" houses in Bir- 
mingham, many of them recently constructed, are com- 
pletely without sanitary facilities. 

An overcrowded home, with children of all ages 
and both sexes sleeping in the same room or with 
their parents, with little or no privacy possible at 
any time, or a home designed for one family but 
occupied by two or more, certainly falls below a 
decent standard of occupancy. In Knoxville, the Real 
Property Inventory showed 22 percent of all the homes 
as either "crowded" or "overcrowded." In Fort 
Worth, a survey indicated that almost 2,000 families 
were either "doubled up" or otherwise over-crowded 
in physically substandard quarters. Such figures are 
typical for a majority of American cities today. 


There are other factors which, though less readily 
measured in a survey, are no less injurious: "back" 
houses of which the Philadelphia "band-box" is a 
notorious type; alley houses sunk in filth and mud; 
buildings covering 80 or 90 percent of their lots, 
with airless windows staring blankly across narrow 
dank courts into other slum interiors. 

"Bad conditions," one will say, "yes, terrible; but 
how general?" Are the slums merely a speck on the 
city's face, or an ingrowing part of its whole com- 
munity life? Here is what some typical cities which 
have signed loan contracts with the United States 
Housing Authority discovered: 

Estimated number of fam- 
ilies living under serious 
substandard housing 

Percent of total families 
in city 

Cleveland, Ohio 

"At least 45,000 in 
the Metropolitan 

At least 15 percent. 


Pittsburgh, Pa . 
El Paso, Tex. 

"More than 60,000." 
"9,500 Mexican 

About 40 percent. 
About 75 percent of 
all Mexicans. 

Buffalo, N. Y. 
Charleston, W. Va. 
Mobile, Ala. 

"30,000 to 50,000." 
"Almost 6,000." 
"More than 3,000 
Negro tenant fam- 

25 to 35 percent. 
40 to 45 percent. 
60 percent of Negro 
tenant families. 

Tampa, Fla. 

"4,234 Negro fami- 
lies in slum areas." 

96 percent of Negro 
tenant families. 

Newark, N. J. 
Detroit, Mich. 

"More than 70,000." 

About 30 percent. 
About 20 percent. 

Note. Since the surveys on which the above estimates were based differed 
widely in the criteria used and the proportion of city area covered, the estimates 
are not comparable. 

Now how about your own city? If your com- 
munity is one of the 204 localities which have con- 
ducted complete Real Property Surveys with the aid 


of Federal relief agencies in the past four years, you 
have the answer there. In any case, it is highly 
probable that some agency, public or private, has at 
least surveyed one or more of your worst slum dis- 
tricts. If no figures are available, it should not be 
difficult to persuade your local authority, city plan- 
ning commission or other responsible agency to find 
the facts. Standard procedures for city-wide can- 
vasses are available from the WPA. 

Get the facts about the extent of slums in your city if you 
can. If that is impossible, spend an hour or two in your 
run-down areas. And then ask yourself what your city 
should do. 

How much money is your city government spending 
for health, law enforcement, fire fighting, and other 
services in areas of substandard housing? Is the per 
capita cost higher than elsewhere? How much of this 
extra cost is directly due to bad housing conditions? 
No progressive city hesitates to spend all the funds it 
can afford for permanent and productive civic im- 
provements, such as parks and highways, schools, 
water, utility and transportation systems. But many 
cities, confronted with the need for drastic retrench- 
ment during the past few years, have discovered to 
their dismay that an increasingly large share of their 
budgets is used merely to combat "evils" rather than 
to produce "goods." Expenditures for fire-fighting, 
arrest and jailing of criminals, and care of the sick 
increase from year to year with disheartening regu- 

Some of these municipalities, anxious to know why, 
made detailed investigations which have helped to 
transform the rehousing of those who dwell in slums 
from an obscure special problem to a primary national 



The map on the left shows cases of pulmonary tuber- 
culosis in Manhattan, 1929-31. Each dot represents 5 new 
cases in a 3-year period, listed according to place of residence. 
The map on the right shows juvenile delinquency. Each dot 
represents 1 child under 16 years of age adjudged delinquent. 

In Jacksonville it was found that 32 percent of all 
major crimes and 42 percent of all social crimes were 
committed in a slum section embracing less than 1.8 
percent of the city's area. In Cleveland and Phila- 
delphia the rate of juvenile delinquency was found to 
be three times as high in the slum areas as it was in 
the rest of the city; in Birmingham and Hartford it 
was twice as high; in one 50-block area in Detroit 
it was ten times as high. In a slum area of Chicago 


26 percent of all boys between the ages of 10 and 16 
passed through the juvenile court in one year. 

With respect to health, the case is even stronger.* 
In Detroit there were almost three times as many cases 
of pneumonia, per 100,000 population, in a slum area 
chosen for clearance as in the city as a whole, and 
over six times as many cases of tuberculosis. In 
Tampa, in a slum district known as the "Scrub" 
which will eventually be cleared under the USHA 
program, the death rate was 17-2 per 1,000 population 
compared with 4.5 for the rest of the city, and the 
disease rate was 23.8 as against 4.8. In Cleveland, 
13 percent of the deaths from tuberculosis occurred 
in a slum area which covered only 0.73 percent of the 
area of the city and contained only 2.4 percent of 
the city's population. 

The Basin district in Cincinnati, where a large slum 
reconstruction project initiated by the former PWA 
Housing Division has been completed, contains only 
27.8 percent of the population of the city and covers 
only 6 percent of its area. But this district in a 
measured period accounted for 64 percent of the major 
crimes committed in the city, 54.2 percent of the 
deaths from epidemics and infections, 47 percent of 
the deaths from respiratory ailments, and 55-8 percent 
of all fire losses. 

* The newspapers recently reported a particularly dramatic 
example of the fact that old frame buildings are often infested 
with vermin, beyond hope or possibility of extermination. The 
Syracuse Housing Authority is in process of demolishing several 
blocks of slums preparatory to putting up a large housing project 
with USHA assistance. Demolition has actually been delayed 
by the pressing problem of what to do about the rats. It is 
estimated there are half a million rats in the area as a whole (200 
per former occupant) and that it will cost $500 a block to get rid 
of them and thus prevent neighboring areas from becoming doubly 
infested. No wonder epidemics start in the slums! 















NOTE. A and B are areas of poor housing. C is an average residential area. 
SOURCE. Iowa State Planning Board. 

Big cities have most often collected and publicized 
such data, but the chart showing conditions in three 
different areas in Mason City, Iowa, prepared by the 
Iowa State Planning Board, tells much the same story. 

The social waste and dangers of these conditions 
unfortunately cannot be measured, although they 
have been obvious for many years. But the actual 
costs to taxpayers of remedial services are measurable 
indeed. It would be a serious mistake to assume that 
all the excessive costs of slum areas to the community 
are due to bad housing conditions. Relief and certain 
other expenditures are traced directly to poverty and 
unemployment. Some of the burden may be attrib- 
uted to lack of education. None the less bad hous- 
ing is certainly a strong contender for first place 
among the causes of chronic waste which no far- 
sighted and realistic city can afford to tolerate. 

The Cleveland Metropolitan Housing Authority 
noted the following contrast between per capita costs 


of various services in a large slum area and in the rest 
of the city : 


Police protection 

Slum area Rest of city 

$11 . 50 $4 20 

Fire protection 

18 27 2 74 

Public health work 

2 02 60 

Tuberculosis care. . 

V04 1 .17 

The Fire Chief of New Orleans recently stated in 
the New Orleans Times-Picayune that the local hous- 
ing authority's plan to clear out a large number of 
undesirable dwellings will be of immense value to 
the city in assisting the fire department's program for 
fire prevention and control. 

What are the costs of these social evils to your city and 
its taxpayers 7 . The facts are in the files of your city depart- 
ments. You will find that expenditures which tolerate and 
seek to "-patch up" the slums are folly. You may conclude 
that a forthright attack upon the slums will stop a waste 
of tax revenues and result in lasting benefits to your whole 
community . 

How much of the area of your city is economically 
"blighted," and how rapidly is this condition spread- 
ing? "Blighted area" is a technical term that has 
gradually found its way into general use for the very 
good reason that it describes a condition which sooner 
or later affects the pocketbook of every taxpayer and 
property owner in the community. A "blighted 
area" may be an outright slum. Or it may be a 
neighborhood which only recently was flourishing 
and respectable, but is now "running down"- very 
often this type of blight is directly due to the spread- 
ing contagion from a neighboring slum, already 
several steps further down the scale. Or blight may 
develop in a partly built suburban area where the 
speculators guessed wrong and left useless wasted 



NOTE. Arrow indicates Smithfield Court, housing project built by PWA and 
now occupied. 

SOURCE. Survey by Birmingham, Alabama, Housing Authority. 

streets and utilities flanking rank field lots and 
scattered shacks. 

But a "blighted area" is always an area of declining 
property values and tax delinquency. It always costs 
the city more than it pays in. And it is always an 
area "dead" to any ordinary private building opera- 
tions, black-listed by the responsible lending agencies 
and neglected by present owners. 

Cleveland made the first systematic analysis of such 
areas, and thus marked the start of a new and more 
sober era in American city development. It was the 
beginning of a desire for knowledge and understand- 
ing which will gradually result in sound planning 
and rebuilding. Cleveland, it may be noted, built 
three large projects under the former PWA housing 
program and has already signed loan contracts for 
three more under the new USHA program. 

Birmingham followed with a similar study. The 
map shows how serious and wide-spread the problem 
became. It also shows the location of the housing 
project built by the former PWA Housing Division 
and now leased to the Birmingham Housing Au- 
thority by the USHA, which was the first real effort 


to turn back the tide. Birmingham is going ahead 
with a large program of slum clearance and low-rent 
housing under the United States Housing Act. 

Is your city threatened by the creeping paralysis of blight? 
If so, there is no reason to yield to it. 

Is the present trend of construction activity in your 
city helping to solve the slum problem? Are there 
signs of a general housing shortage? Most cities 
both here and abroad have found that the process of 
building homes only for the upper income groups 
and then handing them down, at successive stages 
of neglect and disrepair, to lower and lower income 
groups, has proved a failure. It neither eliminates 
the worst old slums nor prevents the erection of new 
slums. And in many localities it seems to have re- 
sulted in a chronic shortage of moderate and low- 
rent homes of any kind. 

The important questions which a city must therefore 
seek to answer are: Is the supply of new dwellings, 
at any price level, adequate to prevent a severe general 
housing shortage? What income groups is the build- 
ing industry as now constituted reaching or likely to 
reach? What are the typical incomes of families now 
living in substandard housing and what rents can 
they pay? 

Rents vary from city to city, incomes vary, building 
costs and prices vary but the over-all picture pre- 
sented by the local housing authorities in their appli- 
cations to the USHA for low-rent projects is amazingly 

In Dayton, only 690* new homes were built between 
1929 and 1935, although it was estimated that 703 
dwellings were demolished between 1929 and 1937. 

* Figures on new construction from the Bureau of Labor 



Moreover, the median construction permit value of 
the new homes was about $4,000, which would mean 
a rental value of approximately $60 per month. 
And the average rent paid in substandard housing 
was about $15 per dwelling unit per month. The 
result? Thousands of families are either overcrowded 
or "doubled up," and it has become virtually impos- 
sible to find a home for rent at less than $20 per month. 

The accompanying charts show for whom new 
private housing has been built in Detroit and Rich- 
mond. Only 980 dwellings built in Detroit from 
1929 to 1935 were conceivably within the reach of the 
123,000 families with annual incomes of less than 
$1,500. Less than 5 percent of the construction was 
available for more than 60 percent of the potential 
consumers! In Richmond only 198 new homes were 
within the financial reach of the 30,000 families with 
annual earnings of less than $1,500, and 97 percent of 
all the Negro families in the city fall within this 

Toledo reports that 3,196 dwellings have been 
constructed in the last 10 years, only 265 of which 
were within the rental range of low income families. 
At the same time, 585 dwellings, mostly low-rental, 
were demolished. This "probable decrease in avail- 
able low-rent facilities is even more apparent when 
one considers that there was an increase during this 
period of the city's population of some 18,000 families, 
the majority of which were probably low income." 
In 1936, a survey by the Toledo Housing Authority 
disclosed only 561 vacancies or 0.8 percent. In 
New Orleans a recent postal survey showed only 1.16 
percent vacancies. Out of 29 vacancy surveys made 
in the first 4 months of 1938, Department of Com- 
merce figures show that in 12 cities less than 2 percent 
of the dwellings were vacant. 










1.000- 1,499 

1,500- 1,999 


$3000 a OVER 









or FA 





1,000- 1.499 

1,500 - 1,999 


$3,000 & OVER 






SOURCES. Family income distribution derived from "Health Survey," 1935- 

1936, U. S. Public Health Service, sample coverage. 
Housing units built derived from "Building Permit Survey," Bu- 
reau of Labor Statistics. Covers 7-year period, 1929-1935- 
METHOD. Building permit figures have been increased by 50% according to 
the usual rule of thumb, to arrive at an estimate of market value. It has further 
been assumed that a family can afford to live in a dwelling of value twice as great 
as family income (i. e. a $2,000 house is assumed to be within reach of a family 
with $1,000 income). 


Is your city different from all these others? The 
Bureau of Labor Statistics is likely to have available 
data on the number and value of residential building 
permits in recent years. It should be remembered 
that these permits represent net construction costs, 
and should usually be increased by about 50 percent 
to arrive at market value or price. About 1 percent 
of the market value of a family dwelling unit should 
represent its approximate monthly rental. If no 
recent survey of rents, incomes, and housing con- 
ditions has been made, a comparison of the building 
permit figures with the data on rent levels in the 1930 
census of your town may be worth while. In addi- 
tion, an estimate of the increase in population since 
1930 is probably available. 

Examine these figures to decide whether your city is 
suffering like so many others from the need for new decent 
housing^ with the added -prospect of skyrocketing rents 
and an emergency shortage such as succeeded the war. 
Then make uf your mind whether your town needs any 
-public housing. 

What would the housing program mean to your city 
in terms of re-employment? Practically all local hous- 
ing authorities report serious unemployment among 
building trades workers. The desire for speedy 
achievements in the housing program rests in part 
upon the conviction that jobs for these men will help 
to stimulate local retail trade and accelerate the 
wheels of prosperity. In several localities the mere 
earmarking of funds or the signing of a large loan 
contract has had a visible effect on local business 
morale even before a penny was actually spent. 

Examples of the amount of employment, wages and 
other expenditures which these projects will bring to 
various cities are shown on the charts. 




NOTE. "All other costs" include local administration; archi- 
tectural services; interest during construction; contractor's over- 
head, profit, etc.; and equipment. 

How would a housing program affect your local 
relief and business situation? From the welfare 
agencies, employment offices, or building trades 
unions in your city you may be able to find out the 
number of building workers actually unemployed 
today. If comparable figures are available, you will 
probably find also that a large number of men who 
actually were building workers at the time of the 1930 
census now list themselves under other occupations. 
They have sacrificed their years of training and 
experience and been forced into other trades where 
they displaced other workers. Their reabsorption in 
the work for which they are best fitted would reduce 
unemployment in other fields. 

Public housing -promotes useful jobs for those willing and 
able to work. 






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Children turned loose on the streets find only idleness, frustra- 
tion, and danger, but in Greenbelt, Maryland, family life is 
developed in healthful, protected surroundings. 

Milwaukee -provides municipal playground (V0/0 a 

lawn project^ with recreation for all ages. Active boys need 

a constmctive outlet for energy . 

Public housing -provides the space for this sewing club in 
Cleveland under leadership of an NY A instructor. 

Community life reflects its environment. Gambling with 
dominoes in this Southern City (topy contrasts with organised 
classes for better home management (lower) conducted in a 
housing -project by state workers . 

Men at work, or women in breadlines 7 . New housing will 
furnish a year s work for over 300,000 men in the building 
trades and allied employment. 

IV. Public Housing Achieves 
Low Costs and Low Rents 

Most cities, when they examine their local situa- 
tion, come quickly to the conclusion that they want 
slum clearance and low-rent housing. Proof of need 
settles this main issue. But as a city proceeds to set 
up a local housing authority, develop plans, and enter 
negotiations with the USHA, certain other funda- 
mental issues are likely to arise concerning the particu- 
lar program of the USHA. 

Above all, everyone wants assurance that building 
costs will not be too high, that projects will be simple 
and economical, and that the rents will be low enough 
to rehouse families who live in the slums. 

In the following pages, these foremost issues are 
raised and discussed. For the most part they can be 
settled directly out of the practical experience of the 
cities with housing projects already under way. 

Building costs are economical and projects are simply 

Many people concerned about housing are at a loss 
when they hear the statement that public housing 
projects are "expensive" and "extravagant." It 
seems only natural for the layman to shy away from 
a discussion of this question. The fact is that the 
subject of costs can be reduced to very simple terms, 
understandable not only to the engineer or the 
accountant but also the average citizen. By sticking 
close to a few facts and by making fair comparisons, 
anyone may form a mature judgment about costs. 


The Housing Act requires strict economy. 

No provisions of the United States Housing Act 
were more carefully considered by Congress than 
those dealing with costs. In order to make sure 
that economy \vould be the watch-word in the 
construction of public housing projects, the Act 
provides (italics ours) : 

No contract for any loan, annual contribution, or capital grant 
made pursuant to this Act shall be entered into by the Authority 
with respect to any project hereafter initiated costing more than 
$4,000 per family-dwelling-unit or more than $1,000 per room (ex- 
cluding land, demolition, and non-dwelling facilities); except 
that in any city the population of which exceeds 500,000 any 
such contract may be entered into with respect to a project here- 
after initiated costing not to exceed $5,000 per family-dwelling-unit 
or not to exceed $1,250 per room (excluding land, demolition, and 
non-dwelling facilities), if in the opinion of the Authority such 
higher family-dwelling-unit cost or cost per room is justified by 
reason of higher costs of labor and materials and other construc- 
tion costs. With respect to housing projects on which construc- 
tion is hereafter initiated, the Authority shall make loans, grants, 
and annual contributions only for such low-rent-housing projects 
as it finds are to be undertaken in such a manner (a) that such 
projects will not be of elaborate or expensive design or materials, and 
economy will be promoted both in construction and administration, and 
(b) that the average construction cost of the dwelling units (ex- 
cluding land, demolition, and non-dwelling facilities) in any 
such project is not greater than the average construction cost of dwelling 
units currently produced by private enterprise, in the locality or metro- 
politan area concerned, under the legal building requirements 
applicable to the proposed site, and under labor standards not 
lower than those prescribed in this Act. 

Thus it is clear that the Act places two restrictions 
upon costs: first, a limitation in terms of dollars and 
cents, and second, a limitation based upon comparison 
with private enterprise. The USHA and the localities 
are straining every effort not only to meet these two 
requirements but also to excel them in the direction 
of economy. As to the dollars and cents limitation, 


the cost estimates on projects now under way, in- 
cluding a cushion of 10 percent for contingencies, are 
averaging about 16 percent under the legal maximum. 
As to the comparative costs limitation, the record is 
equally good. This will be demonstrated after 
pointing out some common fallacies which must be 
avoided in making comparisons of housing costs. 

First costs should not be judged without considering 
durability and economy of upkeep at the same time. 

No business man would say that a machine lasting 
60 years is more extravagant than one which lasts 
only 20 years, simply because the 60- year machine 
costs 10 or 15 percent more to buy. No business man 
would install a machine in his plant simply because 
its first price was cheap, if it needed constant repairs. 
Yet one constantly hears comparisons between the 
original cost of shoddy, speculative construction, 
which will last only 20 years at most, and require 
costly repairs even during that short period, and the 
original cost of durable public housing with a 60-year 

It is precisely because the taxpayer's money is being 
used that public housing construction must be sound, 
no less than post offices, hospitals, and schools. A 
shoddy housing project would cost more in the long 
run just as small home owners in thousands of places 
pay for their homes twice over in mending and patch- 
ing ramshackle buildings. Solid construction is the 
only real safeguard a community has against the 
danger of creating new slums with public funds. 

Achieving very low rents also depends upon 
durable construction. No one could justify a 60- 
year Government loan on a house with a 20-year life. 
Projects assisted by the USHA must be financed over 
a 60-year period to reduce the annual charges for 


interest and principal which enter so largely into the 
determination of rents. Moreover, a relatively fire- 
proof building of simple design but permanent ma- 
terials and good equipment will cost less to run less 
paint, heat, insurance, replacements, leaks and mis- 
cellaneous disorders, and less staff than a much 
cheaper and flimsier house. Nothing could be more 
''penny wise and pound foolish" than to save a few 
dollars in construction, while defeating the objective 
of low rents by making annual operating costs ex- 
cessively high. 

Labor standards should not be overlooked. 

It is generally acknowledged by businessmen that 
the smaller pay checks in low wage areas are no 
indication that low wage areas are more efficient. 
But none the less, jerry-built construction, built under 
the lowest labor standards imaginable, is sometimes 
compared in cost with public housing projects on 
which a decent living wage is paid. Prevailing wages 
are paid on all projects assisted by the USHA. It 
would be short-sighted economy indeed to construct 
low-rent housing for families of low income, and at 
the same time to force the standards of these families 
even lower by depressing their earnings. 

The building trades are cooperating to a remarkable 
degree in the USHA program. Agreements have been 
signed which should encourage regular production 
according to schedule and which may materially 
reduce the contractors' risks and thus, eventually, 
bring down building costs. 

One must measure the full value as well as the cost of a 
housing -project to the neighborhood, the community, and the 

It doesn't mean much to say how much something 
costs until one also realizes how much it is worth. A 


purely speculative housing project may seem to be 
cheap. But it is likely to contribute nothing to the 
solution of a city's slum problem, and it may be so 
poorly designed and arranged that it will degenerate 
into a slum within 10 or 15 years. It may cease to 
be a private asset and become instead a public lia- 
bility. A public housing project, on the other hand, 
may seem to cost somewhat more at first. But its 
benefits may include clearing away the horrible con- 
ditions of city slums, stabilizing property values, 
providing neighborhood recreation places and safe 
play areas for children, and raising the general stand- 
ards of living throughout the community. It repre- 
sents a step toward beautifying and reconstructing 
the city as a whole. 

Cost of construction and cost of site must be differentiated. 

In judging the cost of a housing project, it is essen- 
tial to separate building costs from land costs. Fre- 
quently the total cost of a "housing project" includes 
the relatively high price of acquiring slum sites in an 
expensive central area of the city. Projects so located 
necessarily cost much more than public or private 
construction on vacant or cheap land. The addi- 
tional cost, however, achieves a purpose which is 
not achieved when a private builder constructs a 
"less expensive" project on a cheap site. This pur- 
pose is the clearance of infected slum sites, which 
public authority must undertake because no one else 
will. When a public housing project accomplishes 
both (1) the rehousing of families who live in slums 
and (2) the acquisition, clearance, and rehabilitation 
of expensive slum sites, it is obviously an error to 
compare the total cost of this undertaking to the cost 
of a new commercial housing venture which accom- 
plishes nothing with respect to the slums. 

Of the first 51 projects assisted by the USHA in 28 
cities, 26 are on slum sites and 25 are on vacant land. 


The following table shows the range of estimated 
land cost per dwelling unit for these first 51 projects. 

Estimated cost of land per dwelling unit in the 51 projects 
for which loan contracts have been signed with 28 cities 

Estimated cost of land (including 
demolition) per dwelling 

Projects on 
sites which 
involve more 
than 50 per- 
cent slum 

Projects on 
sites which 
are more 
than 50 per- 
cent vacant 


Less than $99 















$1,100-$!, 299 




$1 500-$1,699 




$1 700-$1 899 



$1,900-$2,099 . .... 






The average land cost per family dwelling unit is 
estimated at $1,165 for the projects on slum sites, and 
at $510 for the projects on vacant sites. The addi- 
tional cost of the slum sites is therefore $655 per 
family, or $10,918,850 for the 13,826 families in the 
26 projects involved. This amounts to about 12 
percent of their total development cost. 

These facts do not prove whether a city should 
build its public housing on cheap vacant land or on 
expensive slum land. But these facts do show that 
there are two methods of rehousing those who now 
dwell in the slums, one of which is more expensive 
than the other, not because public housing is extrav- 
agant, but rather because one of the methods does a 
different job from the other. It is up to each city to 


decide, upon a careful study of its local needs, 
whether with a given amount to spend it should 
rehouse relatively more families on cheaper land, 
with an equivalent number of slums being eliminated 
under the police power, or whether it should rehouse 
relatively fewer families and use more of its money 
to buy up expensive slum areas. 

Using similar terms , one finds that -public housing com- 
pares very favorably in costs with -private housing. 

No one, in comparing the cost of Automobile A 
with Automobile B, would take only the cost of the 
chassis in one case and the cost of the completely 
equipped car in the other. Yet just such procedure 
has been followed repeatedly in discussing housing 

When a man says "I could build that house for 
$3,500, he usually means only the net construction cost, 
excluding land, utilities, overhead, carrying charges, 
architect's fees, and even some of the essential equip- 
ment. The same is true of the attractive figures on 
housing costs generally quoted in the popular maga- 
zines. But when the total development cost of a 
large-scale housing project is divided by the number 
of family dwelling units built and then quoted as the 
"cost" of public housing, this figure includes all of 
these items, and it may also include the cost of slum 
buildings, demolition, streets and walks, public open 
spaces, playgrounds, and other community facilities. 

The building permit data collected and tabulated 
by the Bureau of Labor Statistics of the United States 
Department of Labor provides the only feasible basis 
for a comparison of private and public housing costs, 
although it is generally agreed that cost estimates 
given on building permits are considerably lower than 
actual costs. This building permit data provides 
estimates of the net construction cost per dwelling 


unit of private residential construction. On a strictly 
parallel basis including the same items, the USHA 
has estimated net construction costs for the first 51 
projects approved in 28 cities. The following table 
shows the USHA estimates for these 28 cities. 

Estimated net construction cost per dwelling unit in 28 cities 
with approved loan contracts for 51 projects 

Estimated net construction 
cost per dwelling unit (com- 
parable to "building permit 
values," as used by the Bu- 
reau of Labor Statistics) 

First 28 cities with approved loan contracts 












$3,500-$3 999 



$4 000-$4 449 





For the 6 cities with a population under 100,000, 
the range of net construction costs is from $2,259 to 
$3,258; for the 15 cities with a population between 
100,000 and 500,000, the top figure is $3,497; and for 
the 7 largest cities, the high mark is $4,179. 

In 1937 the Bureau of Labor Statistics figures for 
these 28 cities show that average residential permit 
values for all types of construction were higher than 
the present estimates for public housing in 24 of the 
28 cities. The over-all average for residential per- 
mits was $4,020 per dwelling unit, as compared with 
$3,250 for the projects assisted by the USHA, or 24 
percent higher.* 

*Note that "average" as used in this paragraph is not 
weighted for the number of units erected or to be erected in each 
city; it is used instead as a city index. 


It should be noted that the construction permits 
doubtless include a preponderance of frame dwellings, 
while the new public housing projects will all be 
60-year masonry construction. Also, private home 
building often does not pay prevailing wages, which 
are required under the United States Housing Act. 

But these are estimates. What will the projects 
really cost? As this pamphlet goes to press, actual 
construction bids have been taken in several cities. 
In New York the net construction cost per home will 
be about $3,350; and in Buffalo, about $3,500. These 
are both cities where building costs are usually rela- 
tively high. In Austin, Texas, the average net cost 
of constructing homes for low income families will be 
only about $2,200 per unit. 

Why are the costs so low? For one thing, the 
agreements with the building trades unions remove 
many of the uncertainties and possible delays in big 
housing jobs and have most assuredly played a part 
in the reasonable bids submitted. Also, these new 
projects will be built under normal, local building 
conditions, from local rather than Federal specifica- 
tions. This is only one of the many ways in which 
the policy of decentralization is working out with 
great success. 

And finally, a technique of designing community 
housing projects is now really being developed in the 
United States. For years there has been talk about 
the economies of large-scale operations, the impor- 
tance of neighborhood site-planning, and the value of 
establishing certain simple minimum standards of 
design and equipment in terms of real economy rather 
than gadget salesmanship. Valuable experiments 
have been made, many of them by the Federal Gov- 
ernment. But it is only now that the architects and 
technicians of the USHA and the local authorities are 


transforming this experience into a sound, scientific 

This is still only the beginning, however. Even greater 
improvements and economies may be expected in the future. 
Costs are low, but they must be driven still lower. 

Projects assisted by the USHA will rehouse families 
who live in the slums. 

The provisions of the United States Housing Act 
and the procedures of the USHA represent a sifting 
and crystallization of much experience on the part of 
public and private agencies. From this experience 
there have emerged clearly defined standards as to 
costs, rents, tenants, and local responsibility. Also 
there has been developed for the first time a carefully 
calculated financial method of reaching families of 
very low income. The application of these standards 
and methods insures that the purpose of Congress is 
carried out in spirit as well as in letter. 

First of all, the United States Housing Act provides 
that the USHA can assist only slum clearance and low- 
rent housing. Now, what does this mean? The 
answer becomes clear when one reads the following 
definitions in the Act (italics ours): 

The term "slum" means any area where dwellings predominate 
which, by reason of dilapidation, over-crowding, faulty arrange- 
ment or design, lack of ventilation, light, or sanitation facilities, 
or any combination of these factors, are detrimental to safety, 
health, or morals. 

The term "low-rent housing" means decent, safe, and sanitary 
dwellings within the financial reach of families of low income . 
The dwellings in low-rent housing as defined in this Act shall 
be available solely for families whos? net income at the time of admission 
does not exceed five times the rental (including the value or cost to 
them of heat, light, water, and cooking fuel) of the dwellings 
to be furnished such families, except that in the case of families 
with three or more minor dependents, such ratio shall not exceed 
six to one. 


The term "families of low income" means families who are 
in the lowest income group and who cannot afford to pay enough 
to cause private enterprise in their locality or metropolitan area 
to build an adequate supply of decent, safe, and sanitary dwellings 
for their use. 

Thus the United States Housing Act provides for the 
rehousing of families who live in the slums. 

In addition, the State acts under which the local 
housing authorities operate define "low-income fami- 
lies" even more closely. Those eligible to live in 
public housing projects must, according to a typical 
statute, "lack the amount of income which is neces- 
sary to enable them, without financial assistance, to 
live in decent, safe, and sanitary dwellings, without 

In this way the States are cooperating with the Federal 
^Government to limit public housing to families who live in 
the slums. 

The safeguards established by both Congress and 
the State legislatures are strengthened in the contracts 
between the USHA and local housing authorities. 
Under these contracts, the local authorities must 
obtain from the head of each family at the time of its 
admission to the project, and once a year thereafter, 
a sworn statement as to the total income of the family 
in the previous year. Investigators employed by the 
local authority must file affidavits that prospective 
tenants "cannot afford to obtain safe, sanitary, and 
uncongested privately owned housing." Similar 
methods have proved uniformly successful in the 
selection of families living in former PWA housing 
projects now leased to local housing authorities by 
the USHA . The pessimists ' expectations of ' ' politics 
have died down as facts have proved their fears to 
be unfounded. 


Through these enforceable contracts the localities join with 
the Federal Government and the States to do housing for 
those who need it most. 

But legal conditions cannot alone bring decent 
housing to low-income families unless the rents are 
low enough for them to pay. By careful surveys to 
determine exactly what rents are needed in each 
locality, by simplicity and economy of design and 
management which scrupulously uphold minimum 
standards of space and sanitation but ruthlessly 
eliminate "extra frills," and by USHA and local 
subsidies adjusted to each local need, the local authori- 
ties are driving down rents to the last penny. 

The following table indicates the estimated average 
rents to be charged in projects in the first 28 cities 
with which the USHA signed loan contracts. It also 
shows the approximate average income of the fam- 
ilies to be served by these projects. 

Estimated rent and income groups to be reached by 28 cities 
with approved loan contracts for 51 projects 

Estimated average 
monthly shelter rent 
(i. e. excluding 
utility services) 
per dwelling 

Estimated average 
income group 

First 28 cities with approved 
housing projects 













$950-$!, 050 
$1,050-$!, 150.... 







Four Southern cities expect to achieve average 
monthly rents well under $14 per family dwelling 


unit, serving families with annual incomes from $450 
to $750. In these cities, the median monthly rent 
paid in 1930, according to the census, averaged $19. 
Eleven Northern and 10 Southern cities are planning 
average monthly rents between $14 and $18, for in- 
come levels from $750 to $950. In these cities, me- 
dian rents, according to the census, averaged $22 in 
the South and $36 in the North. The remaining 
three cities, all in the North, will have average 
monthly rents of $18 to $22, serving a maximum 
average income level of about $1,100. The census 
indicates that half the families in these cities have 
been paying less than $41. 

It is important to compare these proposed rents 
with a Cost of Living Survey recently made by 
the WPA, which included 15 of these first 28 USHA 
loan contract cities. In each city, by field survey, 
questionnaire, and careful analysis, a "maintenance 
level budget" was worked out. These budgets em- 
braced the minimum requirements of an unskilled 
wage-earner's family in terms of the actual cost of 
standard food, clothing, shelter, etc., in his com- 
munity. The budget was first developed for 1935, 
and later adjusted for 1937 prices. On the 1937 basis, 
the budget allowances for rents at the minimum 
"maintenance level" were, with only one exception, 
higher than the proposed rent for the housing proj- 
ects in the same cities. All in all, the proposed 
rents for the new projects average 16 percent lower 
than the minimum budget allowance. 

In summary, the first 30,496 family dwelling units 
assisted by the USHA will serve a proved and urgent need 
of those who live in the slums at rents they can afford 
to fay. 

But the question is often asked: What about the 
families with no real income whatsoever families 


who are unemployed or are on relief? Will public 
housing projects reach them? 

The immediate purpose of public housing is to 
raise the living standards of typical employed families 
of very low income, who are independent and self- 
supporting, but who have not been able to afford the 
kind of homes in which independent and self-support- 
ing Americans should live. Public housing is de- 
signed to improve the condition of millions of work- 
ing families who have reasonably steady jobs and 
reasonably steady but inadequate earnings. 

But it must be recognized that a housing program 
alone cannot be expected to cure all the social and 
economic ills of society at one and the same time. 
Perhaps the most wide-spread and deep-rooted of all 
these ills are unemployment and the lack of any sort 
of minimum standard of security in income. It is 
not the immediate purpose of a public housing pro- 
gram to solve the housing problem of the unem- 
ployed and those without reasonably steady jobs or 

It is agreed, both here and abroad, that housing projects, 
once they are set up at the lowest rents feasible, must be 
operated on a business-like basis. 

Unemployment insurance, old-age pensions, public 
works, relief, and the manifold efforts of industry, 
labor, and Government, are all enlisted in a con- 
tinuous war against unemployment and for minimum 
security. All these efforts are still in their infancy 
in America, some of them even younger than the 
housing program. It is not too much to expect that 
their cumulative effect may eventually put a floor 
under that shifting quantity, the American worker's 

In England and the Scandinavian countries, where 
similar measures directed against unemployment have 


been operating with considerable success for many 
years, the extremes of income are not nearly so great 
as they are in this country, unemployment is less, 
and public housing projects often reach families re- 
ceiving unemployment insurance or old-age benefits. 

And while we are striving to bring incomes up, 
we must also work to achieve even lower rents. 
Large-scale housing projects call for a new technique 
of production, capable of gradual improvement in 
every detail. Even today, cities can achieve still 
lower rents than those now scheduled by increasing 
their own subsidies. If, in addition to tax exemp- 
tion, a municipality can make an outright contri- 
bution of land or services, this will materially reduce 
rents. Several cities have already taken this course, 
and the resulting savings in monthly rents have run 
up to several dollars per family dwelling unit. 

But if the very poorest of the unemployed cannot 
move at once into the new housing projects, the 
jobless will none the less benefit if an adequate 
supply of houses is maintained for the population as 
a whole, by public and private efforts. A critical 
shortage hits the poorest families first and hardest. 
And the unemployed more than any other group will 
be helped by the general upturn in business conditions 
which a soundly executed housing program is sure 
to encourage. 

No major forward movement ever reached its goal the 
first year. It has taken a generation for many great re- 
forms to achieve the -practical machinery already developed 
on a nation-wide scale for the rehousing program. 


The -frrivy and the common water taf of this Birmingham 
neighborhood (above^) give way before the sanitation and 
convenience of modern bathrooms and kitchens. 


Bathroom and laundry facilities, hot running water -provided 
in a housing project in Washington , D. C. Perlestine Alley 
in Charleston, S. C., has one tap in the yard for all families . 
Laundry must be done in the yard over open fires. 

Overcrowding sf reads disease in the Nashville slums ( 
but tenants in -public housing are -protected. 

A normal American way of life is now -possible for families 
like these, tenants in Parklawn, Milwaukee, and in 
Creek, Philadelphia. 

Fire and -police -protection costs more in the slums ^ and slums 
cannot -pay their way in taxes. Balancing the social budget 
in these neighborhoods will helf bring city finances into line 
by eliminating waste. 

V. Public Housing 

is Good Business 

The notion that there is always a fundamental con- 
tradiction between "public" and "private" action, 
and that we must always choose either one or the 
other, results from abstract prejudice rather than 
realistic thinking. It is true that those social needs 
which private enterprise alone cannot satisfy tend to 
become public responsibility. But it is equally true 
that practically every exercise of public responsibility 
for productive purposes draws heavily upon the 
services of private enterprise and proves a stimulus 
to the profitable expansion of industry. 

The public highway system eliminated private toll 
roads and toll bridges, wiped out miles of good farm 
land and expensive buildings, and cost the taxpayers 
millions and even billions of dollars. But where 
would the great automobile industry, the cement and 
rubber industries, and countless other contributions 
to our national prosperity have been without good 

Likewise, in a public housing program, many 
different kinds of private enterprise participate di- 
rectly or indirectly. The various types of individual 
initiative should be examined one by one, in order 
to consider exactly what their particular stake may 
be and what they stand to gain or lose by a large- 
scale public housing program. One thing which be- 
comes evident immediately from such a survey is 


that only a very small part of the entire public 
housing program is actually "public enterprise." 

Public housing stimulates private enterprise. 

Manufacturers are outstanding representatives of the 
business community. The participation of produc- 
tive industry in the housing program is simple, direct, 
and entirely on the profit side of the ledger. Of the 
$889,000,000 which constitute the immediate public 
housing program ($800,000,000 in USHA loans plus 
a minimum of $89,000,000 raised by the local au- 
thorities), about $338,000,000 will be spent directly 
for materials and equipment. This means large 
individual purchases of standard first-grade goods, 
with no risks about the payment of bills. And 
these orders will displace no other orders, since the 
low-rent program will service families who would 
otherwise be entirely outside the market for new 

The contractor derives an even clearer benefit from 
the housing program. About $689,000,000 will be 
spent for construction alone in the first few years. 
This sum will be paid directly to private contractors, 
who will in turn use it for wages, materials, equip- 
ment, and their own profit and overhead. 

The builder of homes for sale or rent is the man most 
often thought of when "private enterprise" is men- 
tioned in connection with the housing business. Will 
he be hurt by public housing? As long as the new 
dwellings are rented at levels far below anything he 
can reach, and as long as the tenants are drawn solely 
from income groups who cannot aspire to new homes 
privately built, the low-rent housing and slum clear- 
ance program offers no competition of any kind to 
the private builder. The exacting legal conditions- 
Federal, State, and local which guarantee him this 


protection have been described in detail beginning on 
page 62 of this pamphlet. The proof that the actual 
rents to be charged in the new projects will be below 
any attainable level for new private buildings has 
been presented on pages 64-65. 

Far from being injured, the private builder is sub- 
stantially helped by a public housing program. Last 
summer a partial survey was made by the Public 
Works Administration of the new building going on 
in the neighborhood of the PWA housing projects 
then under construction. It was reported that "a 
total of $3,000,000 worth of private real estate im- 
provements in the vicinity of the projects has been 
traced directly to the reviving effect of the housing 
developments on their surroundings although in 
many instances the Federal improvements are not 
yet completed or occupied." One small project "was 
built in an obsolescent neighborhood where the total 
value of improvements constructed in recent years 
would probably not amount to $1,000." Imme- 
diately after the project was started, "the neighbor- 
hood was benefited by the construction of 4 filling 
stations, 9 store fronts, 15 stores, 73 houses, and one 
swimming pool. In addition, 8 stores and 15 houses 
have been remodeled." This case was typical of 

Those most concerned about the future welfare of 
private building enterprise see in public housing a 
large factor in stabilizing the entire construction in- 
dustry. The mere handful of public housing projects 
already erected have influenced the development of a 
sound technique for large-scale planned neighborhood 
development. The increasing success of the FHA in 
their large rental projects, and such undertakings as 
the tremendous Metropolitan Life Insurance project 
in New York and the Buhl Foundation's Chatham 


Village in Pittsburgh, have been greatly facilitated by 
the thought and experience developed in public 
housing, both here and abroad. 

Another thing which public housing can do for the 
private builder is to raise the standard of demand. 
There are today thousands of middle income families 
living in homes which, although decent by contrast 
with the slums, are inconvenient, inadequate, and out 
of date. As families living in the slums are gradually 
moved into modern dwellings these other families 
will look to private builders to build even better 
homes for them. 

An editorial in the Asheville "Citizen" on August 
1] , 1938, represented the weight of informed opinion 
when it said: 

"Although the USHAs activities are not designed to 
enter the field of private building^ it is expected that they 
will stimulate -private building on a large scale. Such, it 
is -pointed out^ was the experience of Great Britain^ where 
a governmental rehousing program led the way for one three 
times as large by private builders. 

The conservative truth of this assertion is illustrated 
by the chart. In England today more than one-fifth 
of all families live in homes built since 1930. Almost 
one-fourth of this number live in public housing 
projects put up by local authorities with Government 
aid. Meanwhile, ordinary private enterprise has been 
building homes at three times the rate achieved in 
the United States. In Sweden 30 percent of all urban 
families live in new homes as compared with 6 percent 
in the United States and the production of public 
and public-assisted nonprofit housing (including co- 
operatives) has been 20 times as great as in this 
country. The actual figures on which this chart is 
based, and the sources, are shown in the table. 


Public Private 

5 5 10 15 20 25 30 







Number of 

Total dwellings 
built 1930-1937 

By public agen- 
cies or other non- 
profit enterprise 

By private enter- 


Per 100 


Per 100 


Per 100 


10, 233, 139 
647, 770 
17, 372, 524 

2, 189, 366 
195, 749 
1, 041, 265 


496, 447 
25, 502 
29, 559 


1, 692, 919 
170, 247 
1, Oil, 706 



Sweden ! _ 

IT. s.i 

1 Urban families and urban homes built. 

England. "Housing, House Production, Slum Clearance, etc., England and Wales. 
Position at 30th of March 1938." British Ministry of Health. Number of families from 1931 

Sweden. "Federal Home Loan Bank Review," September 1936. American-Swedish News 
Exchange, Inc., New York. Urban households from 1930 Census. 

United States. "Monthly Labor Review," January 1938. Estimate of public housing, 
from Bureau of Labor Statistics, includes urban homes built or aided by Public Works 
Administration, Farm Security Administration, Works Progress Administration, and Alley 
Dwelling Authority. Urban families from 1930 Census. 

In England the public housing program is of long 
standing. Of the 3,660,000 homes built since the 
War, 1,010,000 have been built and are owned and 
operated by the municipalities, which receive loans 
and annual grants from the Government under a sys- 
tem similar to the USHA plan. Public housing is 
partly credited with the fact that England never 
reached as low a bottom in the depression as the 
United States. 


The private owner of land, either vacant or develo\ 
is another person who shares the advantages of 
public housing. Under the present program, about 
$133,000,000 will be spent for land and for buildings 
to be demolished, with the fair market price being 
paid in every case. In addition, slum clearance and 
attractive neighborhood improvements will arrest 
"blight" and falling property values in surrounding 
sections. Adjacent vacant land will almost certainly 
rise in value and salability. 

The Akron Times Press said on August 9, 1938: 

"// the housing development would destroy property 
values in East Akron, it would be the first time that such 
a condition has resulted. The opposite usually happens. 
These well planned and well built Government houses tend 
to boost rather than lower property values " 

This thought has been reechoed throughout the 

What about the owners of rental homes and apartment 
houses which are not to be purchased for slum clear- 
ance? Will they suffer from competition? No owner 
of property which is safe and sanitary can possibly be 
injured, for as has been shown in detail only families 
now living in unsafe or insanitary housing are eligible 
to live in a project assisted by the USHA. As for 
the owners of substandard dwellings, it would be sad 
indeed if the economic welfare of our country de- 
pended on the perpetuation of the slums. Few 
owners of slums can be held personally responsible 
for the conditions which have developed, but no 
attack on the housing problem can be successful- 
cither public or private unless it gradually makes 
the ownership of anti-social housing unprofitable. 

The private investor also has a big stake in Amer- 
ican homes. He holds the mortgages, and when 
properties decline in value as they did during the 


depression, foreclosures make him a big property 
owner. An increasing number of bankers have come 
to believe that fair property values will be restored 
by the reconstruction of the slums and the revitaliza- 
tion of "dead" areas. 

Even bankers can make mistakes by concentrating 
their attention too greatly on the preservation of the 
figures written down on pieces of paper in their 
vaults. Bankers need new fields for sound invest- 
ment. Public housing offers them just that, and 
they have not been slow to seize the opportunity. 
More and more private capital is showing an eager- 
ness to participate in the financing of low-rent 
housing projects. 

The merchant is the final major representative of 
' 'private enterprise" who benefits by housing. Wages 
paid to building and material workers, otherwise un- 
employed, rapidly find their way into grocery stores, 
clothing shops, and every kind of retail trade. 
Besides, a serious housing shortage hurts the mer- 
chant, by raising the share of family income that 
must be paid for rent and thus reducing the con- 
sumption of other goods. 

In short^ except for the very limited interests which 
cannot thrive without maintaining the slums, every legiti- 
mate -private enterprise benefits by public housing. 

Public housing is a wise investment for the taxpayers. 

The USHA plan established by Congress has been 
fully explained in Part II. The main feature of this 
plan is the annual contribution system, in the form 
of cash from the USHA and tax exemption or its 
equivalent from the localities. If these contribu- 
tions were not made, the rents would be far out of 
reach of families living in the slums and the whole 






To the More Abundant Life 



-| -/ '^^ 


Blue Prints For Gray 

We Hope You'll Be Gone With the Slums 


Road Closed 



purpose of the program, including the avoidance of 
competition with private enterprise, would be de- 
feated. These annual contributions, therefore, are the 
price we must pay if we want public housing and 
slum clearance. No one can pass judgment upon 
this price without bearing in mind the cost of the 
only alternative no public housing or slum clearance 
at all. 

Some of the costs of not doing public housing, to 
the Federal Government, the cities, and private indus- 
try, have been indicated in Parts I and III. These 
costs have been portrayed in terms of the disease and 
debilitation which increase public health services; 
the crime and delinquency which raise the cost of 
maintaining law and order; the depressed demand for 
housing materials and equipment which paralyzes the 
building industry and affects all business adversely; 
the destruction of property values by the spread of 
blight; and the unemployment which results in a 
heavy burden of expense for relief. 

Nevertheless it is not enough to state the negative 
side alone. Every taxpayer has a legitimate interest 
in knowing as nearly as possible the present and the 
prospective cost of a public housing program. 

What will housing cost your city 7 . 

The cost to American cities of acquiring almost a 
billion dollars worth of decent low rent housing 
under the present USHA program will be very small 
indeed. All they need to do is to provide tax exemp- 
tion or its equivalent for the projects to be built. 

In calculating this cost, it is a serious mistake to 
assume that a figure representing the normal tax rate 
on these new projects reflects the actual loss of revenue 
sustained by a city when it exempts them from taxa- 
tion. Taxes, no matter how they may be levied or 


collected, are paid by people, not by buildings. 1 In 
a public housing program, a certain number of fami- 
lies move out of slums into decent new homes. 
Either the slums they were living in or an equivalent 
number of substandard dwellings are demolished. 
From a local fiscal point of view, in order to deter- 
mine the cost of the new housing to the city, the real 
question is: What taxes were these families paying 
before, when they lived in the slums? 

To take a concrete example, let us assume a 
$2,000,000 project to rehouse 400 families in a city of 
200,000 population. Full taxes on this project would 
amount to about $40,000 a year (at a conservative 2 
percent rate, with assessed valuation equal to 100 
percent of full valuation), or about $100 per family. 
But a study of taxation in slum areas in cities of 
various sizes shows that taxes actually levied on the 
former slum homes of these 400 families probably did 
not exceed $40 per family per year, based upon an 

1 There are certain arguments advanced against tax exemption 
as the ideal form of local subsidy to housing. In England full 
taxes are paid on housing projects, and the local authorities 
make their annual contributions in clear-cut outright cash. In 
England, however, taxes are levied on rents, not on capital value 
which means that low income families by and large pay no more 
taxes whether they live in a modern housing project or a slum 
home. Taxes in England directly reflect the capacity to pay. 

In America, on the other hand, if full taxes were levied on a 
public housing project based on its presumed (although non- 
existent) "market value" as a commercial project, the slum 
families' tax bill would be trebled in many cases. Taxes alone 
would take the whole sum this family could afford to pay out 
in rent, and the effectiveness of the USHA contribution toward 
lowering rents would be nullified. For this reason, tax exemption 
becomes a necessity if low rents are to be achieved. Of course, 
it would theoretically be possible to collect full taxes and then 
return an equal amount to the project in the form of cash con- 
tributions. But this round-about method for accomplishing the 
same result would run into insuperable fiscal and constitutional- 
debt limit problems in the localities unless we are to wait for 
public housing until our local systems of taxation are thoroughly 


average assessment of $2,000 for slum homes, and a 
large proportion of even this amount was undoubtedly 
delinquent. Thus the actual loss of revenue to the 
city when it exempts the new project from taxation 
is not $40,000, but less than $16,000. 

If the value of all the property in the city is assumed 
to be about $400,000,000 (at $2,000 per capita), the 
total property tax levy for the whole city would 
amount to $8,000,000 a year. Exemption of the 
400 rehoused families of very low income from tax- 
ation would thus deprive the city of only 0.002 of 
its annual tax revenue. Furthermore, even this 
small theoretical loss is offset by the saving in mu- 
nicipal services due to the elimination of several 
blocks of slum homes, and by the benefits derived 
from the investment of $2,000,000 in an enduring 
public improvement. 

But, it may honestly be argued, however little the 
cost may be, 400 new homes will not go very far 
toward solving the housing problem of a city of 
200,000 people. What will it cost to do the whole job! 

In a number of cities in England, Holland, and 
the Scandinavian countries, more than one family in 
five is living in a housing project owned and operated 
by the municipality with government aid. If the 
American city of 200,000 people decides to under- 
take a similar program to rehouse 20 percent of its 
population in 10 years, what will be the cost to the 
taxpayers of the city? 

Of 50,000 families living in the city, 10,000 low 
income families now occupying slums will be rehoused 
by public initiative. In order to achieve rents within 
their reach, the 10,000 new homes will have to be 
exempt from taxes. This seems like a large order, 
but how will it actually look on the municipal 
balance sheet? 


Again using the figure of $40 as an approximation 
of the average property tax charged annually to these 
10,000 families living in the slums, the removal of 
these slums from the tax rolls and the substitution of 
tax exempt public housing would cut off only about 
5 percent of the city's total property tax levy of 
$8,000,000. Therefore, even without any allowance 
for the general civic prosperity and tangible municipal 
savings which would result, and assuming that full 
taxes are ordinarily collected in the slums,* the 
removal of all these families from the tax rolls would 
only raise the present 2 -percent tax to 2.1 percent. 

The benefits which would result from such a bold 
and comprehensive program are easier to forecast than 
those flowing from one small project for 400 families. 
These minimum benefits make the maximum estimates 
of cost to the city shrink into insignificance. 

Look at your own city map again. Imagine all 
the worst homes in your city cleared away. Imagine 
about half of these rotten slum districts reconstructed 
in new well-planned housing projects for former in- 
habitants of the slums, with the remainder of the 
cleared space devoted to parks and new private 
building. Adjacent areas have taken on new life. 
Rundown neighborhoods are "coming back." 

On the outskirts are a number of complete new 
neighborhoods, where live other families who for- 
merly occupied crowded substandard homes. Simple 
but neat, with well planned open spaces and fresh 

*The average delinquency on the sites for 28 slum clearance 
projects for which loan contracts have been signed with 22 cities 
amounts to about 5 percent of the assessed valuation of the 
properties. This is probably the equivalent of well over 2 
years of unpaid taxes. It should also be noted that purchase 
of the property by the local housing authority necessarily means 
full payment of back taxes by the former owner. 


architectural aspect, they have none of the ragged 
wasteful look of a typical suburban development. 
A large amount of private building has been stimu- 
lated in their environs. 

Look closer. See the healthy children in wading 
pools and nursery schools who would otherwise 
have been playing in dirty alleys or dangerous streets. 
See the mothers, enjoying pleasant efficient house- 
keeping instead of the fruitless drudgery of the 

Would the cost be too high, even if it did add 
one-tenth of one -percent to the tax rate? 

And consider the certainty that the effects of the 
housing program will tend to reduce rather than 
increase the tax rate. 

To revert to the example, the construction of 
10,000 new homes in the city of 200,000 people would 
put into circulation directly about $50,000,000, or 
about $5,000,000 a year during the 10 year building 
program. A rough division on an annual basis would 
be as follows: $1,000,000 for land; $2,000,000 for 
wages on the site; and $2,000,000 for materials. The 
first two items and a large part of the third or a 
total of perhaps $4,500,000 would be spent directly 
in the city, in cash. Down will go the cost of city 
relief, for at least 2,000 men would be steadily at 
work who would otherwise have been unemployed. 
Down will go the heavy cost of tending slum areas. 
If even a part of the extra municipal services now 
provided for the inhabitants of the slums were cut 
out, the result would be profit and not loss on the 
local government's ledger. 

And up will go municipal revenues. For increasing 
business activity and general prosperity mean more 
tax collections without higher tax rates. 


What does the housing program cost the Federal Govern- 

As far as the current program is concerned, it has 
been shown in Part II that the whole original 
$800,000,000 invested by the USHA in slum clearance 
and low-rent housing projects will be repaid in full 
with interest. The only cost to the taxpayer will be 
the annual contributions paid to bring decent homes 
within the reach of families living in the slums. 
These contributions, under the present Act, cannot 
extend beyond $28,000,000 per year. This is only 
about one one-hundredth of the annual cost of 
National defense. 

This very low rate of expenditure will increase in 
the future, if Congress so wills, as the program gains 
momentum and shifts from its early stages to the big 
task of rehousing all of those who live in the slums. 
But history has repeatedly demonstrated that healthy 
countries like the United States are able to take 
major reforms and vast new public responsibilities 
in their stride without economic strain, once the 
undertaking has been proved to be worth while. 

Today no one believes that subsidies for education 
are undermining the financial strength of the Nation, 
though in an earlier day the air was filled with just 
such prophesies. No one today calls it unwise or 
unsound to tax the whole community in order to 
keep part of the community in school, though just 
that charge was common when public schooling was 
in its infancy. A standard of literacy and education 
has been accepted, and the cost of maintaining that 
standard is chargeable to the national welfare. 

In the year 1935-36 total Federal, State, and local 
expenditures for the administration and construction 
of schools amounted to $2,396,501,893, or about $90 
per pupil. This means that a family with two or 


three children attending school receives "an annual 
contribution," if one wants to call it that, averaging 
about $200. This sum in most cases greatly exceeds 
the total tax payments of the family for all public 
services. It would exceed the entire annual contri- 
bution needed to enable a family to live in a decent 
home instead of a slum. 

From 1929 through 1936 the total State and Federal 
subsidies for roads and highway maintenance reached 
$12,000,000,000, or an average of $1,500,000,000 a 
year. This is far more^han the total annual contribu- 
tions needed from both Federal and local governments 
to rehouse 20 percent of the population in decent 
homes, and thereby actually "solve" the American 
housing problem. And yet, who would claim that 
our highway system has been other than a prudent 
and economical measure in the best interests of the 
national welfare? 

Today, by action of the United States Congress, 
decent housing no less than sound education and 
efficient communication has been recognized as an 
essential part of the American standard of living. 

An editorial in the Birmingham News expresses the 
ideal behind this action in the following words: 

"Now that man has the resources and the machinery to 
supply a decent standard of living for all in food, shelter, 
health no government will be able to stand that does not 
make earnest and j airly successful efforts to make the oppor- 
tunity for this minimum abundance available to its citizens. 
These efforts, jar from necessarily killing free government, 
could be the greatest means of strengthening it." 


92523 U S.