The Division of Building and Housing was established in the Department of Commerce in 1921, when the country had not yet recovered from the wartime housing shortage, and when there were, at the same time, millions of unemployed men walking the streets. That situation showed graphically how the country must depend upon an economical, smooth-functioning construction industry if housing standards are to be steadily improved, and if reasonable stability in business is to be achieved.

Creation of the Division was the culmination of efforts made during several years to have the federal government set up such an agency.

The idea that the federal government should cooperate on a voluntary basis with business and other groups in policies having the dual aim of relieving the housing shortage by means of new construction, and furnishing employment, had been publicly advocated by Herbert Hoover in November, 1920, and shortly after taking the office as Secretary of Commerce in March, 1921, he announced such cooperation as one of the Department's policies. He recommended an appropriation for the work, following the lines suggested by the Senate Committee, and in the measures then pending before the two houses of the Congress. This appropriation was granted in a bill passed in June, 1921.

An Advisory Committee on Building Codes consisting of nationally known architects and engineers was set up in the same month, and the Division itself was established on July 1 with the general aim of aiding in the solution of such outstanding problems as stabilizing building activity, more satisfactory development of urban areas through zoning and city planning, eliminating wastes in building, and encouraging home ownership.

Sustained and healthy construction activity is essential for stable employment, rising living standards, and the general prosperity of the country. The American people have been spending from six to seven billion dollars a year, or nearly one-twelfth of their income, for construction during the past five or six years.

It is fundamental that this construction be carried out economically, and at a fairly even rate, not accentuating the ups and downs of general business and employment, but, if possible, acting as a balance wheel by speeding up when other business is slack.

1 Adapted from The Division of Building and Housing and Its Services (mimeographed circular issued by the Division).

Construction materials, including lumber, cement, steel, and many other vegetable and mineral products, are produced in practically all sections of the country and furnish about an eighth of the total railway freight carried. A decrease in building activity, therefore, is quickly and widely felt, while an insistent over-demand at any one time may lead to an inflationary boom with inevitable reaction.