There are large wastes in the building industry which could be eliminated by more efficient organization. The report of the committee on waste of the Federated Engineering Societies rated the building industry as second highest in a group of six large industries as regards the prevalence of wasteful methods. Sixty-five per cent of the waste in this industry was attributed by the committee to management, twenty-one per cent to labor, and fourteen per cent to other sources.1 The wastes of management are largely due to unemployment prevailing in the industry, a considerable part of which could be eliminated.....

1 Adapted from The Marketing of Short-Length Lumber - First Report of the Construction Subcommittee of the National Committee on Wood Utilization (U.S. Department of Commerce, 1926), pp. 1-4.

2 Adapted from Community Problems (New York: Century Co., 1928), pp. 122-28.

In a foreword to a report on "Seasonal Operation in the Construction Industries,"2 submitted by a comittee of President Harding's Conference on Unemployment, Secretary Hoover wrote as follows:

In summary, the committee has well demonstrated the most important fact that the seasonal character of the construction industries is to a considerable extent a matter of custom and habit, not of climatic necessity. It gives recommendations of practical methods of solution through specified cooperative action of the trades and professions vitally interested in each locality - architects, engineers, bankers, contractors, building material dealers and producers, real estate men, and building trades labor. No solution is sought or suggested of government regulation. The service of the committee has been to determine the facts and to point a remedy that is consonant with our national conceptions of individual and community initiative. The need is the development of local consideration by these bodies of the problems in each community, with voluntary action to uproot wasteful customs and habits. The service to be rendered to our whole economic life by the elimination of these gigantic wastes and the conscious planning to overcome these irregularities, the improved condition of labor which is possible not only in actual construction but in the material manufacturing industries, the lowered costs of production and of building which could result therefrom, are great warranty for such cooperation.3

A second consideration relative to the reduction of housing costs has to do with the enlargement of credit facilities.....Capital flows more freely to more profitable enterprises, such as the production of automobiles and other luxuries. To meet this difficulty following the War, bills were introduced into Congress authorizing the establishment of home loan banks, analogous to the Federal farm loan banks; and also to allow the savings and time deposits of national banks to be used for long-time loans for home building. Without such legislation it is probable that the savings banks in local communities could further home building more than they sometimes do by diverting a larger part of their loans to this end; and wherever law or custom interferes with this, the law or custom should be changed. The availability of capital for this purpose naturally affects the interest rate, which may be burdensome.....

1 U.S. Bureau of Labor Statistics, Monthly Labor Review, September, 1921, p. 13.

2 U.S. Department of Commerce, "Elimination of Waste Series." Washington: Government Printing Office, 1924.

3 Seasonal Operation in the Construction Industries, pp. vii-viii.

One aspect of the matter concerns the usurious charges for second mortgages. A recent survey of this matter covering practices in over 200 cities showed that not only is second mortgage money hard to obtain, but that a high bonus or discount is required for getting it.1 Rates, including bonus, interest, and discount run from ten to twenty-five per cent on the original loan. It is alleged, of course, that these high rates are necessitated by the risks involved in such loans. But the amount of risk is probably overemphasized. At any rate, it is natural that the money lender should make the most of it.....Mr. Samuel N. Reep, chairman of the second mortgage section of the National Association of Real Estate Boards, was quoted as follows on the question of usurious interest rates:

Legislation is badly needed in many states to provide a usury law with teeth. In several states the law fixes the usury rate, then, as a penalty for violation, provides that the violator must forfeit any amount in excess of the maximum rate. The result is that operators charge almost anything, and when they are checked up and convicted simply return the excess amount. Needless to say, they are seldom brought to task.....There is no question but that the high rate scares out many a family anxious to build and own their own home. I see examples of it daily.2

Large-scale production and the adoption of standard plans for varying types of houses by employers and by commerical or philanthropic real estate corporations should effect savings in home building. A wealth of information is available here as a result of the work of the United States Housing Corporation, and of the more recent efforts of some employers. Also, important contributions toward the simplification and standardization of construction materials have been made by the Division of Building and Housing in the United States Department of Commerce.3

The improvement of building codes looking toward a greater degree of uniformity as between cities regarding construction materials and measurements would reduce to a considerable extent the expense of building. A case in point is the prohibition by many communities of the use of hollow tile as a substitute for brick. Safety requirements are often too drastic, and express a lack of confidence of the people in the integrity and wisdom of the builders. Again in this connection, the work of the Division of Building and Housing of the United States Department of Commerce has been most useful. It has drawn up a model building code, and aims to secure its adoption by cities and towns. .

1 From material gathered and published by the Christian Science Monitor in June, 1925, and quoted in the Information Service, a publication of the Federal Council of Churches of Christ in America, June 13, 1925.

2 Quoted in Information Service, June 13, 1925.

3 See Construction and Construction Materials. Washington: Government Printing Office, 1924.

A fundamental consideration in regard to housing costs has to do with the policy of land control. People may build "castles in the air," but their houses are of necessity set on the ground. It is the speculative element in the cost of land that retards housing developments, and all but wrecked the elaborate housing plans of Great Britain after the War. Various methods exist by which cities are learning to exercise some degree of control over land values, tending toward their stabilization. But aside from the special features of city planning, such as excess condemnation and zoning, the movement to lessen the burden of taxation upon improvements, and to shift it progressively to land, is gaining some headway.....

Finally, it is clear that housing costs are much affected by Federal policies in regard to the tariff on building materials, and in regard to transportation rates and priority determinations relative to building materials. Also, the expenses of the house-owner for fuel, light, and other services are determined in part by the public attitude toward utility companies which furnish these services.....