Most of the effort thus far made towards reducing the cost of houses has taken the direction of seeking to reduce the cost of the shell of the house - as distinguished from the things that go into the house.

While the cost of the shell, or the building itself, is still the major part of the cost of a house, the other elements that enter into this total cost are quite substantial ones. According to Henry Wright the cost of the shell of the ordinary house may be taken as from 45 per cent to 60 per cent of the total cost. Moreover, according to Ernest P. Goodrich, President of the Research Institute for Economic Housing, the cost of the house itself is but 50 per cent of the total cost of a home - the remaining cost being distributed as follows, 10 per cent for the land, 25 per cent for the municipal improvements such as sewers, water, grading, gas, electricity, streets and pavements, and 15 per cent for the cost of financing.

Lewis Mumford, who always writes in interesting fashion, in an article in the Architectural Record,2 a few months ago, discussing this question of "Mass Production and the Modern House," points out that "the two new spots where mass production would take the place of present methods, namely, in the shell itself, and in the assemblage of the parts, offer only a minor field for reductions." As he says: "To cut the cost of the shell in half is to lower the cost of the house a bare 10 per cent." He rightly adds: "A good part of the total cost of housing is represented by factors which, like the cost of money or land, are outside the province of factory production; or, like the numberless constituent parts of the house, are already cheapened by mass production."

1 Adapted from "Should Building Costs Be Reduced?" and "High Cost the Chief Obstacle in Home Ownership," Housing, December, 1930, published by National Housing Association.

2 January and February, 1930.

On the economic side of the problem and the important factor that a man who has not sufficient earning capacity cannot afford to buy the best home to live in, any more than he can buy the best of anything else, Mr. Mumford says:

Plainly, the architect cannot solve by any magical incantations the problem of supplying new houses to families whose income is not sufficient to cover the annual charges. There is no answer to that question except.... in the form of higher wages or state subsidy; although a wilful blindness to this fact is almost enough to establish a person as a housing authority in the United States.

Summing up the possibilities of mass production as a means of reducing the cost of houses and bringing them within the purchasing power of the lower income group, Mr. Mumford says:

The new houses might well be better than the present ones - they could scarcely be worse. But if better, they would not be radically cheaper; and since a new cost, a cost that is excessive in the motor industry, namely, competitive salesmanship, would be introduced, the final results promise nothing for the solution of our real housing problem - the housing of the lower half of our income group, particularly of our unskilled workers. The manufactured house no more faces this problem than the semi-manufactured house that we know to-day.

May it not be that what makes the high cost of living today is the cost of high living, as pointed out by the late James J. Hill some years ago. More and more the people of this country are demanding luxurious ways of living. It has been often said that the laborer in America to-day enjoys luxuries and comforts that kings and princes did not know a few centuries ago, and the emphasis seems to be increasingly in this direction.

How many people who are about to buy a home consider first the question of its sanitation? How many ask about its light and assure themselves that every room is afforded an abundance not only of light but of sunshine? How many assure themselves that that light and sunshine is a permanent possession and cannot be shut off by some other building that may be put on the next lot? How many home purchasers consider or concern themselves with whether their homes have cross ventilation in every room, thus assuring to them moving air - one of the most important elements in maintaining a healthful atmosphere in their homes? How many home purchasers or home builders know anything about or care anything about the extent to which the home is soundly constructed?

The things that catch the eye, the things that other people are having, the black-tiled bathroom, the electric refrigeration, the new types of equipment in dining room and pantry and elsewhere - these are the things that the average home buyer and home builder thinks about and on which he - or rather she - places emphasis.....

A New York builder of large experience in the building field, G. Richard Davis, recently called attention to this factor in the rising cost of construction.

Mr. Davis said recently:

The demands made by tenants have greatly increased. In the average apartment house, for instance, room sizes are constantly changing, with a very strong demand for larger living and bedrooms and for smaller dining rooms and kitchens. Living conditions have been changed since the great war.

The kitchenette is a product of necessity. We are adapting ourselves to smaller kitchens and compact equipment. The electric ice machine is now asked for in even the most modest priced apartments. Garbage incineration, soundproofing partitions and floors, radio outlets, lighting switches and base plugs, laundry and storage facilities, open fireplaces, enclosed radiators, showers, chromium plated bathroom fittings, brass pipe, two-pipe modulated heating systems, are all additions to the requirements of the average tenants of today, as compared to twenty years ago.

These additions, improvements and betterments have all added to the cost of building construction, and when one estimates the increased cost of a building today as compared with two'decades ago this must be taken into consideration.

That what goes into the building has much to do with its cost was strikingly illustrated by an article in one of the architectural journals a few months ago. That article described two very charming and attractive high class residences that had been built, one on Long Island, the other a few miles away in Westchester County. The house plans were practically the same, almost identical. The houses were equally attractive in appearance, both were by the same firm of architects. But the house on Long Island cost only $40,000 to build, whereas the house in Westchester cost $70,000, and they were built within a few months of each other.

The architect gives a detailed analysis in contrasting columns of the reasons for this difference in cost, which he finds lay chiefly in the "extras" that the owner of the house wanted in the latter case. The cubic contents of the houses were approximately equal. Both houses were well built, and yet by sacrificing personal preferences to more typical demands, the one house was built for almost half the cost of the other.

That the average family in the United States could afford to purchase its own home, if it did not feel that other things such as radio sets and automobiles were more desirable, is evidenced by a recent survey made by the National Industrial Conference Board, contrasting a pre-war budget and the cost of living with a budget recently compiled by the U.S. Bureau of Labor Statistics from a systematic investigation of 100 workingmen's families in Detroit.

The average income among these 100 Detroit families, practically all derived from factory earnings, was $1,711.87. Under the pre-war budget this income would have been divided in the following percentages: Food 43.1 per cent, housing 17.7 per cent, clothing 13.2 per cent, fuel and light 5.6 per cent, and sundries 20.4 per cent.

The Bureau of Labor investigation shows the income now divided according to these percentages; food 32.3 per cent in place of 43.1 before the War, housing 22.6 as compared with 17.7 in the earlier year; clothing 12.2 as compared with 13.2, fuel and light 6 as compared with 5.6, and sundries 26.9 as compared with 20.4.

The conclusion reached from this study by the National Industrial Conference Board is that there is a steady advance in living standards as indicated by the decreased proportionate income required for food and the marked increase in sundry expenditures, and the material increase in the cost of housing. They infer that the latter is due largely to the increasing demand for modern baths and bathtubs, which they infer cannot be obtained without price.

That the realtors of the country are aroused to the menace to their business in the high cost of home ownership was made evident in an address delivered in Chicago some months ago by Leonard P. Reaume, President of the National Association of Real Estate Boards. After calling attention to the fact that the greatest single business in the country is the real estate industry, and that its function is to provide housing for persons, for business, for commerce and manufactory, and that directly and indirectly it employs about 1/4 of the country's labor, and that 15 per cent of the total national income is devoted to its activities in new construction, replacement and repairs, Mr. Reaume proceeded to call attention to the importance of stimulating home ownership, and of removing the present obstacles to it.

To his mind, notwithstanding all the advances that have been made in business technique and new processes, there has been a retrogression in the market for homes for persons of small means. As he says, while other industries through improved technique and economies in manufacturing have constantly reduced the price of their commodity and at the same time improved its quality - thus bringing it within the reach of the great masses of buyers - in the real estate industry they have pursued the opposite course.

He illustrated this by pointing out that during the last 15 years, when the Ford automobile has been cut in two in price and at least doubled in efficiency, the single-family dwelling has doubled in price without a corresponding increase in comfort, durability or beauty, and adds that because the cost of home ownership has doubled during the last 15 years it has been placed out of the reach of the great majority of our population. He wisely says: "The instinct for home ownership is strong. It needs little or no encouragement. It needs only economic opportunity to function."

Taking the oft-quoted figures that 84 per cent of the family incomes in the United States aggregate $2,000 or less and the figures of a survey made in his own city of Detroit not long ago which showed that the average family earnings were approximately $1,800, Mr. Reaume points out that a family which earns the latter amount cannot afford to pay more than $500 a year for housing and have sufficient funds left for food, clothes, education, insurance, savings, care of children, and the other normal requirements of civilized life.

He finds that $500 a year is not sufficient to buy a home with civilized conveniences and modern facilities upon any terms that a person can pay to-day, and that the utmost that such a family can afford in the way of a home is one costing approximately $4,500. But workingmen's homes are not to be had for that price to-day; in most cities they cost $7,000, $8,000 to $9,000. As he points out, such homes require a monthly payment of $70 to $80, thus demanding half the total earnings of 4/5 of the people of the United States.

Mr. Reaume outlines 4 possible approaches to the problem of reducing the cost of home ownership in the United States. These are the following: First, reduction in the price of home sites; second, reduction of the cost of building; third, reduction of taxes; fourth, reduction in cost of financing the purchaser.

Taking up the first of these, Mr. Reaume points out that the preparation of home sites by customary subdivision methods is exceedingly costly and wasteful, and urges that this whole process should be brought under some form of intelligent control and adjusted to the actual necessities of the community at the moment. While deprecating Government control or regulation, he urges a system of voluntary control which will overcome these difficulties. He also urges more efficient methods of using land. He calls attention to the fact that most subdividers make too many paved streets which are expensive to construct and to maintain, rightly calling attention to the fact that the automobile age requires wider and fewer thoroughfares with elimination of as many cross streets as possible. He points out that the old gridiron or checkerboard plan which has been rightly held up to scorn by city planners for many years is no longer adequate for conditions as they exist to-day, and says that we could close half of the cross streets in most of our cities without particular loss in traffic efficiency, and estimates that the saving in the cost of a lot would probably be as much as 15 per cent.

The new methods employed at Radburn of long blocks with cul-de-sacs and separation of foot traffic from wheel traffic, with few cross streets, strongly commend themselves to him, not only because they make homes more desirable, but because they reduce the amount of land necessary for homes by a good proportion and also reduce the cost of street and other installations.

The second avenue of approach to reducing the cost of homes Mr. Reaume finds in reducing the cost of building.

He rightly emphasizes the antiquated methods that are still employed in home construction, pointing out that building materials are still being made to fit the size of a man's hand, and are transported to the site and assembled in the course of two or three months by the most expensive methods of hand labor that the world has ever seen, and rightly contrasts what would happen if automobiles were constructed in similar fashion. He strongly urges, in place of these antiquated methods, the methods of modern industry, of factory fabrication and mass production, and says the layman can see no reason why a bathroom, for instance, should not be manufactured as a unit and put into its place complete. He does not see why wall sections cannot be developed which are complete both as to exterior and interior, and insulation which could be fitted into place.

To the old cry that standardization in the manufacture of houses will result in monotonous dwellings, he very rightly calls attention to the fact that we have monotonous and standardized homes at the present time, and says that the great masses of homes in most American cities areas like as two cracker boxes, and poorly built at that. Mr. Reaume sees no reason, however, for assuming that fabrication processes applied to dwellings need necessarily result in monotony, pointing out that the automobile industry probably makes more extensive use of mass production methods than any other commodity, yet it is possible for the buyer to choose between some 600 or 700 different models made by approximately 50 different companies - which he finds a wide enough range of choice for the taste of any man. The same, to his mind, would be true of fabricated dwellings produced for the masses. He urges that the whole construction industry should study this problem.

A third direction in which Mr. Reaume sees possibilities of removing present obstacles to home ownership is in the reduction of taxes - local, state and federal. After pointing out that in the average city considerably less than 20 per cent of the money expended by the local government and taken from taxpayers may be said to benefit real estate, he asks the question why 80 to 90 per cent of the cost of local government should be saddled on the man who elects to own his home.

A fourth means of removing the obstacles to home ownership Mr. Reaume finds in reducing the cost of financing the purchaser. He says if the financing costs of the home buyers are high it is due in large part to some of the high costs, waste and risks which have been previously indicated, and wisely points out that the financing of homes cannot be made cheap until many of the elements of risk and divided responsibility in the building and selling of homes that now exist are removed, and finds certain handicaps now existing in the laws of various states with respect to junior financing whose removal might be helpful. The usury law of many states makes second-mortgage business as he says virtually a bootleg business. Other elements in the financing costs are recognized.

Mr. Reaume concludes his discussion of this subject with a plea to all those who are interested in encouraging home ownership to consult together to see if by some step the present obstacles to that desired end can be removed, pointing out that we must not lose sight of the fact that the home, in which we are all interested, is itself too costly at the present time for 80 per cent of the American people to buy.