In depressions of the past, the building industry has often been an early help toward recovery. In 1921 construction took the lead toward an upward movement and started to advance before industrial production made its upturn. In 1924 the unchecked growth of building operations helped to keep the country from sinking lower into business depression, and the recovery came quickly

Of all branches of the building industry, by far the most important is the construction of homes and apartments. From 1923 to 1928 between 41 and 46 per cent of all building was for this purpose. And it was home building in the days of the 1921 depression that started up most rapidly and did more than any other type of building to hasten business recovery. Again in 1924 the advance in home building was the chief influence for improvement.

1 Taken by permission from Elements of the Modern Building and Loan Associations, pp. 443-45, 1925. By permission of the Macmillan Co., publishers.

2 Adapted from "Homes for Workers," North American Review, CCXXXI (January, 1931), 32-36.

The present home-building programme starts a new precedent. Today conditions are very different. In the years of high building activity which made up the war deficit, homes and apartments were overbuilt. That is, they were overbuilt for the groups of people who could afford new homes at the present prices. Consequently the last two years have seen a decline in home building amounting to 31 per cent in 1929, and in 1930 home building has been 46 per cent below even 1929. Instead of being the mainstay of the construction industry, home building has dropped to 23 per cent of all construction in 1930, as compared to 41 per cent and more in former years. From far and near come tales of houses standing vacant and apartments which can not be rented.

Obviously this side of the problem must be carefully considered. We are starting on a home-building programme at a time when incomes are reduced, and when there is apparently an oversupply of houses and apartments for certain groups of the population. There is another large group of people, however, who need and want new homes - the wage earners. Hundreds of thousands are living in quarters that are anything but suitable for family life. They would gladly move into a better environment if they could find houses and apartments within their means.

Here is a real need for better housing, a demand for homes which can be a mainstay to the building industry. The problem is to construct homes at reasonable prices, within the reach of working people. A home-building programme which can accomplish this will indeed bring nationwide benefit to American citizens as well as to the building industry.

Fifteen years ago it was as expensive to buy an automobile as it is to buy a home today. Mass production was introduced and today thousands of wage earners own their cars. Can we not hope for measures which will reduce the cost of home building as the price of automobiles has been reduced? At present it is not possible for the Vast majority of wage earners to own their homes, and most even have difficulty in finding modern apartments with the equipment and surroundings which will make a suitable environment for their children.

There is nothing more important in forming the character of the American people than the home where our boys and girls grow up. Home surroundings help to mold the moral fiber that is to measure up in the tests of later years, or start the physical and mental defects which later on bring downfall.

For working men and women particularly, a good home is all important. Because it can not be supplemented by clubs, travel, opportunities for independent living, the workman's home is definitely the center of family life, the formative influence for growing children. When we consider that 80 per cent of our 122,000,000 men, women and children are in the wage-earner group, it is obvious that good homes for workers are a matter of national significance.

The large majority of our citizenry come from workingmen's homes. They are the group our industries depend on for steady and intelligent work. They must bear the strain of sustained productive labor, often under nerve-racking conditions of noise and speed and long hours. The man who can keep his nerves steady, who does not lose his precision after weeks, months, years of hard work, is the man our country wants and counts on for responsible management of his part of the nation's work.

Growing children must have the environment that builds strong bodies. Sunlight and fresh air, a safe place to play, with grass and trees if possible, cleanliness and comfort at home, with running hot water and bath - all these are necessary to build bone, muscle, nerves, and strength which will carry through in later years. Dark rooms, foul air, cramped surroundings, may be the start of lifelong physical defects. It makes all the difference whether windows look out on an inner court or into the open air; whether children play in crowded rooms or outdoors in a playground.

No less essential are the other elements of environment. Beauty, neatness, the necessary comforts and conveniences, are part of that intangible background which means so much in mental and spiritual growth and reserve. The mother of a wage-earner's family must be cook, seamstress, laundry worker, nurse, companion to children and husband, and an economist to expend the family income. She can not employ help to share her responsibility. If this busy mother of the family is to keep clean curtains at the windows, tidy rooms, spotless linen and clothing, she must have modern conveniences to help her. For the wage-earner's wife does all her own housework, and often, when wages are low, she must supplement the family income by going out to work as well. She needs hot water, electrical wiring, adequate heating in her home.

But in spite of the great need for homes for wage earners, there are many old tenements in our cities where children grow up in dark inner rooms; mill houses in many communities, which were hastily built to provide for growing industries, still have no plumbing and even no water supply, to say nothing of central heating, gas or electric light. Yet the mental and physical health upon which the future of our nation depends is conditioned by all these elements in the home environment.

When a workman chooses his home, he has many things to consider. Probably the most dominating question is: How long can I keep my job? Can a wage earner count on steady work long enough to pay instalments on a purchase if he wants to buy a home? This question lies at the root of our home-building programme to-day.

With the swift and ruthless changes in industrial employment which have followed each other continually in practically all industries in the last ten years, few workmen can be sure that they will hold their jobs even for a year from now. New machines are introduced in one factory, and 500 are laid off; a new technique develops in another, and 50 or 60 lose their jobs. These figures mount up into the hundreds of thousands as the process of technical improvement spreads from plant to plant and industry to industry.

These are not rare happenings; they are going on continually as part of the vast industrial changes we are passing through to-day. The 20,000 business failures that occurred last year have thrown thousands of wage earners out of work. A job today is a very doubtful security indeed. Even though our factories were producing 42 per cent more in 1929 than they did in 1919, 514,000 fewer wage earners were at work manufacturing these goods; 227,000 fewer were employed on the railroads transporting them, and 122,000 fewer were mining coal to furnish fuel and power. These are just a few figures to show the enormous number of workers who are losing their jobs through increasing industrial efficiency.

Seasonal changes also lay off hundreds of thousands, and many do not get their jobs back again when the next busy season comes. In 1929 in the automobile trade, 150,000 workers were laid off in the dull season. All these men lost an average of two months and many never got their jobs back. In the clothing and textile industries, the dull season meant 32,000 jobs lost for two or three months.

Some of these workers, of course, find new work in the same city, and near their homes. But a surprising number leave town and seek work elsewhere. "I'm lucky this year," said a painter the other day. "Last year I had to travel a hundred and twenty-five miles before I found a job." And thousands are less lucky and have to travel farther. A bricklayer who kept a record of his wanderings in search of work travelled one year from Pennsylvania to Norfolk, Va., then to Washington, D.C., then back to Philadelphia for a few weeks and on to Williamsport. Each time his job lasted only a few months or less. Another year found him in Indiana and Tennessee.

Unless you have been through it yourself, you have little idea of the struggle to find and keep a job. With only a small savings account to fall back on at best, the wage earner who loses his job is in dire straits, indeed. A recent study shows that it takes on the average three months to find a new job of any permanence, and during this time savings are needed for food and bare essentials. How can a man invest in buying a home under these circumstances? Payments which could not be met when they are due would only bring the loss of all invested capital. Far better to buy a car which is paid for in a year or eighteen months. At least it will be a help in getting from place to place in search of work.

Two kinds of homes at low cost are urgently needed to meet the requirements of the modern age: (1) Homes which can be purchased on easy terms, providing security for the investment involved, so that money put into them can be withdrawn without great loss. (2) Apartments and rented homes which will be equipped with modern comforts and appliances, and situated in suitable surroundings.

At present, although there are many wage earners, especially of the more skilled group, whose jobs are more secure and who would like to own their homes, it is impossible to finance the purchase without high interest rates and difficult financial arrangements.

Compare for instance buying a car and buying a home. To buy a $500 car, you pay about $200 down, and after that $25 a month. At the end of a year, the car is entirely paid for. A $1,000 car requires only $55 a month for one year, with $340 down payment. Also, you can sell your car easily if need arises or you can use it as security to borrow money.

But to buy even a $5,000 home involves many complicated problems. First you must have at least $500 in cash. Then you may secure a first mortgage for $3,000 at 6 per cent, but to raise the final $1,500 you will have to take out a second mortgage, which with discounts will cost you at least 18 per cent, and if you happen on a sharp real estate dealer, it may cost you 30 per cent. To pay off these mortgages will take at least ten years. For the first three years payments will be $69.50 a month, then $30.30 for the next seven years, exceedingly difficult for a wage earner. When you have finished payments, you will find that with the high discounts it has cost you $1,099 to borrow $4,500. In other words, you have paid $6,099 for your $5,000 home. In the mean time you will also have taxes to pay. If you build your own home you have in addition fees for title search, and all the difficulties of choosing materials and design, about which you probably know practically nothing. Add to this the fact that once you own your own home you would probably find it difficult to sell without serious loss if you had to move. Is it any wonder that wage earners buy cars instead?

Better financing methods would eliminate much of this difficulty and expense. But no adequate programme for better homes for workers can stop with a plan providing for the purchase of homes. What millions of workers need in this country to-day is good homes to rent, either apartments or small houses. For until we succeed in stabilizing employment and until workers' living standards are higher, there will be millions who can not possibly afford to buy homes. They are the ones who suffer most from the congested living quarters of our slums today. And it is a tragic human waste that this should be so. For out of the families of many of these workmen comes some of the finest material for our future citizenship.

Slums can be redeemed. This has been proved often enough, but in most cases redeeming the slums has not meant better homes for workers. Also experimental towns for workers in suburban districts are already being tried. These homes have a little plot of ground with grass and trees and a place for children to play, safe from motor traffic. Efforts to put such homes at the disposal of workers are most praiseworthy. The problem involves both the creation of homes in the suburbs and suitable houses and apartments within the city, and the redemption of unwholesome living conditions now existing.

As we consider the home-building programme, let us not overlook the essentials but get right to the root of the problem: That of creating good homes for workers. To solve it will require the concentrated efforts of those interested in finance, construction, real estate, labor, building materials and many other groups. It has been possible to produce automobiles, radios, furniture and other articles in mass. Is it not possible to produce good homes on a scale which will make quantity consumption possible and profitable for all concerned? The construction industry depends on wage earners and small salaried workers for the rent or purchase of at least two-thirds of all homes and apartments built in the United States. If workers can afford better homes, there is no question of an increased demand.


There are many advantages of home owning over that of renting. However, the United States Census Bureau reported only 45.6 per cent of the families of the country as home-owners in 1920. One of the reasons for a low per cent home ownership is undoubtedly difficulties in financing. Since there are countless advantages to be derived from home ownership, it is probable that the great majority of families desire to own their homes. There are always, however, some families who cannot safely finance homes, and a few whose occupations and professions are such that they cannot remain in a single community sufficiently long to make ownership advisable.

Many families find the buying of a home to be the largest investment they ever make. Before buying it is well to consider the following: (1) Income-present and future, (2) the amount of money saved, (3) the amount of rent paid annually, (4) the amount the family can well afford to pay for both the home and its upkeep. If one-sixth of the income is used for rent, it may be possible to use one-fourth or more to buy and maintain a home, for the amount used may include both rent and savings. Usually it is desirable to possess free from obligation one-fifth of the value of the house and lot in cash before making the purchase.

Financing is one of the obstacles that stands in the way of home owning. Although the cost of houses has increased during the past fifteen years, the number of sources from which money may be borrowed has also increased. The smaller the amount of money on hand the fewer the sources for borrowing, the higher the interest, and the greater the risk. Homes are usually financed by (1) paying all cash, (2) paying part cash and by raising the remainder on a first or on first and second mortgages, (3) buying on the contract plan - paying a relatively small amount in cash and the remainder in monthly instalments.

The costs during ownership should be considered before ownership is decided upon. The most important of such costs are payments on the loan, interest on the loan, taxes and insurance, extra assessments, upkeep, and maintenance of the house.


Churchill, Allen L., and Wickenden, Leonard. The House-Owner's Book. New York: Funk & Wagnalls Co., 1928. Basis for borrowing, mortgages, building and loan associations (pp. 1-8).

Clark, Horace F. Appraising the Home. New York: Prentice-Hall, Inc., 1930. Appraising lots (pp. 43-61); methods of appraising houses (pp. 96-104); appraising from plans and specifications (pp. 165-91).

Clark, Horace F., and Chase, Frank A. Elements of the Modern Building and Loan Associations. New York: Macmillan Co., 1927.

Making the loan (pp. 190-229); appraising the house and lot (pp. 232-43); association loans (pp. 248-66).

Gries, John M., and Curran, Thomas M. Present Home Financing Methods. U.S. Bureau of Standards, B.H. 12. Washington: Government Printing Office, 1928. Pp. 23. Discusses sources from which money may be borrowed, and analyzes loan plans.

Gries, John M., and Taylor, James S. How To Own Your Home. Publication No. 7, February, 1931. Washington: Better Homes in America, 1929. Pp. 32.

Presentation of home-ownership problems and how to meet them.

Jones, Robert T. "How To Figure the Cost of Owning a Home," Small Home, X (August, 1930), 17-18, 42-43.

Lescarboura, Austin C. Home-Owner's Handbook. New York: Scientific

American Publishing Co., 1924.

Methods of home financing; first and second mortgages, building and loan associations (pp. 34-52).

Overton, James. "Ten Reasons Why I Would Not Buy My Own Home," Magazine of Wall Street, XLII (May 19, 1928), 136-37.

A discussion of problems of a particular family which made home ownership inadvisable.

Rouse, Harry V. "Is Home Owning More Profitable than Renting?" Ibid., September, 1928, pp. 935, 967. Author describes an actual comparison of two similar cases.

Simons, H. A. "The Building and Loan Association," Small Home, VIII (April, 1928), 13, 36, 40. Discusses plans of various associations.

Walsh, Harold Vandervoort. The Construction of the Small House. New York: Charles Scribner's Sons, 1923. Contract system, building and loan associations, items of expenditure (pp. 262-65).

Wood, Arthur Evans. Community Problems. New York: Century Co., 1928. Building and loan associations (pp. 75-77).

Wyman, John M. "Financing Small Homes through Local Building Loan Associations," Building Age and National Builder, XLVIII (April, 1926), 232-33.

Holden, Arthur C. Primer of Housing. Workers' Education Pamphlet Series, No. II. New York: Workers' Education Bureau Press, 1927. Pp. 48.