U.S. HOUSING: A New Program
ABRAMS, CHARLES
U.S. HOUSING: A New Program By Charles Abrams U.S. HOUSING: A New Program By Charles Abrams Twelve years after the war and 23 years after the Federal Government first stepped into the housing...
...If we continue as we are, our cities will decay...
...Alternative housing for the evicted was all but forgotten...
...Some states might join in the constribution and expand the range of eligible applicants, as New York State now supplements the Federal low-rent housing program...
...The best plans are those geared to goals which can be timed, implemented and adjusted to change as well as possible...
...Thanks to Government policy, building starts in 1957 ran 400,000 below 1955, a year in which we built only 1,328,000 dwellings...
...A housing program designed to benefit lenders and builders primarily and the American people only incidentally should be as repugnant to our ideals as if we built schools primarily for the benefit of the contractors rather than the children...
...Cooperative housing...
...One thing is certain: We are not meeting our requirements by filling the country with four- and five-room houses...
...Like other mortals, they prefer privacy to constant scrutiny of their earnings and living habits...
...The FHA's as well as the VA's current role of insurer would ultimately be limited to areas or projects for which first-mortgage money was not available at reasonable rates...
...When the Depression came, the building industry went into the doldrums and foreclosures were wiping out home-owners at the rate of 1,000 a day...
...We should have learned in the last 40 years that a sound housing program is vital irrespective of emergency, whether it be depression, defense, war or reconstruction...
...There are more non-average families today than average ones...
...Government-aided rental housing is now available only for those who benefit from the FHA rental-housing program and for the tiny fraction served by the public-housing program...
...But second mortgages are unsound only when they involve extortionate bonuses, not because they are second mortgages...
...too many of the civic groups are more concerned about retaining their tax-exemption status than doing a better job...
...The barrier can be broken by direct Federal loans and by Federal action to stimulate construction of housing for which minorities can qualify...
...Those who loosely inveigh against public housing and against school authorities who are honestly trying to achieve balanced integration are doing the cause of civil rights a disservice...
...Private lending institutions took their risks, too, and lent no more than two-thirds of the house value to make sure their mortgages were secure...
...The HHFA should also explore the possibility of an equity-insurance formula under which owners for a premium could be insured against the risk of foreclosure through unemployment, illness or other prescribed hazards...
...The regional planning potential lies in roads, public works and utilities, publicly aided housing, water, schools and urban renewal...
...These would not be insured by the Government...
...Each of the agencies administering the programs must be alerted to the responsibility for relating its function to the larger plan...
...We built some housing for the middle class—but, as costs continued going up, we simply lowered the standards so that many houses were worse than those built in the 19th century...
...When U.S...
...The home-buyer was enabled to acquire title for a smaller down payment and with a single mortgage—but he had contracted a debt for life...
...In the process, a silent revolution was effected in housing and mortgage financing in which stake and risk were removed from the venture...
...Few cities in the United States were built under a plan...
...By the 1950s, the infant housing mongrel of the New Deal had grown into a many-headed, full-blown brute, no more resembling the general welfare that spawned he.- than Hydra resembles the Mona Lisa...
...The proposal would work as follows: Any owner would borrow what he could on a conventional first mortgage, which would be uninsured...
...It is involved with obsolete boundaries, regional and interstate needs, suburban sprawl, migrations, fiscal difficulties, social status, minority tensions and the whole complex of urban and suburban life today...
...The program should be viewed as only one approach to the low-income housing problem, and it should be modified in these respects: 1. The uncertainties of tenure must be eliminated...
...Concentrated minority occupancy has increased resistance to sound site acquisition for public housing, discouraged applications by whites, and created ghetto neighborhoods and their concomitant, segregated schools...
...Of those being built, most are in speculative, scattered developments that sprawl on the city fringes, the traffic-snarled slums of tomorrow...
...A slum-clearance policy is untenable in a period of shortage...
...Rental housing for lower-income families...
...Loans could be serviced by local banks for a small premium or by local housing authorities...
...Direct Federal loans would be needed only to supplement the conventional loans so that owners could continue to buy with small down-payments...
...A proper equity-insurance formula would not only avoid this but also help the homeowner through his temporary difficulties...
...Yet, speculative housing projects will continue to mushroom without benefit of planning, gas stations and supermarkets will go where their proprietors wish, and reservations for park and school purposes will be skimpy or non-existent...
...Mortgages at reasonable terms would engage the larger market...
...More social distortions resulting from overcrowding than from physical conditions as overcrowding has become the main index of slum life...
...Federal encouragement is needed to stimulate such a program...
...most are eloquent in preamble and silent in specification...
...The administrator must prepare a program in harmony with the general welfare, believe in it and fight for it in Congress against the vested interests to which his agencies are now lashed and by which he is himself enthralled...
...A Federal Department of Urban Affairs with Cabinet rank is long overdue...
...The subsidy would consist of a municipal subsidy equal to the property tax on the house or apartment, plus a cash Federal subsidy...
...The time is not distant when the courts and responsible community leaders must further define "integration" with "deliberate speed" and work out lawful means for effecting it...
...This cut mortgages in half, vindicated the FHA guarantees and ratified the dream that home ownership was sound...
...The President's Committee on Government Contracts holds a key to Negro improvement but has hardly emerged from its initial lethargy...
...The Government would lend money on second mortgage directly to home-buyers at very low interest rates...
...It must learn to distinguish between the preamble of a law and its content, between promise and fact, between its friends like the National Housing Conference and its foes like the real-estate lobby...
...Revision of the HHFA and FHA system to embrace lower-income families...
...There are general techniques to effect integration without fixing percentages...
...While color blindness has always been a fundamental principle in public undertakings, the Supreme Court's decisions in the school-segregation cases have reopened the issue of color identification...
...We now had socialization of mortgage insurance with the FHA-VA systems, socialization of losses by the FNMA, and socialization of credit aid by the Home Loan Bank System...
...The administrator of this super-agency must assume control over his numerous sub-agencies instead of being their common figurehead...
...Resale of the house would be subject to Government approval during the low-interest period...
...faith, not futility...
...Thus, if the market rent for a new apartment were $30 a room, the city would issue a tax warrant to the family for, say, $7 a room (representing the property tax per room), which the family would turn over to the landlord as part payment (the landlord could use it to pay his taxes...
...Although this system could achieve an integrated pattern in housing and schools, it would give a public agency power to bar one group or another after the prescribed percentage had been reached...
...London's old Peckham Center experiment with a community center serving the entire family has been unheard of here...
...The only homes available to them were the very slums scheduled for demolition...
...Mutation is part of the price we pay for freedom of movement, and no city can hang onto the past in the face of a mass migration...
...These ten aims should dominate our thinking in housing and condition our commitments...
...In very recent years, the proportion of Negro tenants has risen sharply due to (1) the low and rigid income limitations which qualified more Negroes than whites, (2) the mass displacement of Negroes by urban renewal, public works and other projects, (3) the continued migration of Negroes to the cities, and (4) the failure of the private market to supply housing...
...While the symbols of private enterprise were maintained, it was no more like 19th-century capitalism than Karl Marx was like Groucho...
...This arrangement works smoothly in private New York City cooperatives in a single multiple dwelling...
...One of the most formidable prospects for regional planning lies in urban renewal...
...The private-enterprise formula, as we once knew it, no longer functioned in this section of our economy...
...Elsewhere in the nation, Negroes have sold houses to whites and whites to Negroes...
...Thinking is often confined to local needs and sectional preferences without regard to the surrounding area...
...It showed that the underprivileged will pay rent and live as decently as other citizens, that they will raise their standards as well as their children, that they prefer security and freedom in neighborhoods of their choice to institutionalization, that people of different races can live in harmony, that ghetto housing projects are as bad in some respects as ghetto slums...
...In 1957, FHA-VA programs designed for the middle-income family were ofi by more than 50 per cent as compared to 1955...
...This means an end to the institutionalized approach and the building of homes in neighborhoods— homes the occupants can take pride in and look upon as their own...
...Instead of wholesale demolition of shelter and mass eviction of the occupants, there should be enough new construction to make the slums obsolete in the long run...
...We tore down slums—but intensified overcrowding and its unhealthy by-products...
...Ultimately, there would be interstate agencies as well...
...Up to the 1930s, the building of homes was a private undertaking—like selling clothes or vegetables...
...The focus of the racial issue has been almost exclusively at the legislative and judical levels...
...Revision of the FHA financing scheme by creating a Federally aided second-mortgage market...
...Or should we provide the older people with the widest posible choice of patterns and climates...
...The new dispensation proffered socialism for the banks and private enterprise for the proletariat, a full plate for those who needed help least and the offscourings for those who needed it most...
...No problem has beleaguered the housing program more than the minority question...
...The subsidies would be reduced or discontinued as family incomes increased, and examinations into income would be made no more often than every three years...
...Above all is the unsettled question of segregation...
...9. A stabilized real-estate pattern...
...One good formula is the Swedish one, providing for construction by the experienced "mother cooperative" and disposition to the "daughter cooperatives...
...This program would enable a large part of the low-income population to become solvent owners, would create a vast new market for builders, would open suburban land to all families and drain urban slums, and would provide jobs in the event of a major recession, a possibility now by no means remote...
...The supply of old larger houses which could be altered to accommodate some of these families has long since given out...
...Many a working mother spends a good part of her earnings for a maid...
...No city can ever adhere to a plan as made...
...The need is for vacant land operations and for the better use of underdeveloped land near the centers of population...
...These are no mean accomplishments...
...Effective planning agencies in the executive departments of the national and state governments could coordinate plans and relate them to goals...
...Thus, some families in the same project would be tenants, some established cooperators...
...Projects should be built not as almshouses but as attractive additions to the urban scene, fit for families of improved income...
...Until then, it is wrong to condemn any well-motivated effort to keep public housing or a public school from becoming all white or all Negro...
...Such a formula would reduce carrying charges, including premium costs, widen the market for houses, release the Federal Government from a mortgage activity that has been and should be strictly private, and cut down the Federal involvement in guarantees...
...Private builders have sold or rented thousands of dwellings to Negroes and whites without any serious problems...
...Roads and public works are financed by state or Federal authorities...
...Thus, the private mortgage market would make first-mortgage loans at 50 to 80 per cent of value (as it has done in the past and often does now...
...Unfortunately, neither the states nor the Federal Government have shown responsibility...
...All the resources of the agencies must be harnessed to common objectives instead of operating in separate compartments, each of which is the puppet of a particular pressure group...
...But the trouble with all generalizations, including these, is that they can too easily be corrupted when translated into legislation...
...These aimed at putting liquid funds into the hands of the lending institutions by buying up their sour mortgages, and at encouraging them to lend more freely, by insuring their new mortgages against loss...
...Worse still, the housing shortage is growing more critical...
...Improved educational and informational work would stimulate more applications from white families...
...The state agency would have power to acquire large areas, improve them with streets and utilities, and resell them for private development according to a prearranged plan...
...In the next 20 years, the highways built under the Highway Act of 1956 will have a mammoth effect on our metropolitan areas...
...To fulfil a cooperative venture, someone must have the initial capital, the experience and the final say...
...In either event, the Federal Government would have to supply capital for working funds and mortgage loans at reasonable rates...
...In short, there must be concrete proposals which the public must take the trouble to analyze or every new program will end up as a handout to the pressure groups just as before...
...pride of ownership, not fear of dispossession...
...The present socialization, institutionalization and homogeneity are debasing the public-housing program in the estimation of the public and the tenants...
...The tendency is to ignore social aspects...
...For example, site selection and clearance in concentrated Negro areas cements segregation...
...Applications for the subsidies would be processed by local housing authorities or other public agencies...
...Urban renewal, city and regional planning...
...In the pivotal areas of shelter, community and family life, we have not advanced but have fallen back...
...It would insure better use of the thousands of square miles scheduled for development...
...The Federal function, once limited to the enumerated powers, has been broadened by the courts to embrace almost anything thought to be in the "general welfare...
...Both linked crime, disease and delinquency to the condition of the old buildings and insisted on tearing them down...
...The cities are plagued today by over-concentration of low-income families, critical traffic problems, heavy financial burdens, shortage of land for expansion, and an actual or threatened obsolescence...
...Inflation became the great blanket for our blunders and the cover for our deceits...
...This operation could produce a British-type "new towns" movement in the United States...
...The racial problem varies according to the proportion of Negro population...
...3. The aim should be not for continuous public ownership but for sale of the apartments to cooperative corporations as and when the tenants improve their income...
...Loans would be made to the owner from funds borrowed at or near Government rates...
...We should therefore speed a return to the uninsured first-mortgage market supported by a new second-mortgage market made possible by Government financing...
...A public-housing program was set up to help the slum dweller and simultaneously encourage more building and thereby speed recovery...
...Though now the bread and butter of the planners, it was once part of the housing movement...
...A new emphasis on the neighborhood as the certificate of rank and dignity, as the ascending white masses now found a permanently identifiable class from which they could be distinguished and above which they could rise in the social estimates of themselves and their neighbors...
...Housing for special groups...
...To finance the rest, the builder or owner would borrow from individual lenders on second mortgage at a higher interest rate commensurate with the risk...
...Regional rationalization for the benefit of both city and outlying areas is long overdue...
...We are fundamentally a nation of private entrepreneurs accustomed to risk and stake, not bounties or paternalism...
...many want new houses close to the ground, not 13-story tenements...
...The Federal subsidy would vary with the family's requirements and would represent the major portion of the subsidy to the family...
...3. A sound mortgage structure...
...It is also time we realized that, despite our technological superiority in other respects, we remain an underdeveloped nation in housing...
...Families eligible for the subsidy could, however, apply also in approved buildings which have conventional financing...
...In time, however, the whole program was recast...
...The bank could also borrow in the open market on short term and repay part of the loan through speeded amortization payments or through receipt of mortgage principal...
...The FHA insurance system was justified in the 1930s as a primer of mortgage funds...
...A Federal second-mortgage fund would be set up to provide money for these second mortgages...
...7. A realistic slum-clearance program...
...As housing famine supplanted surplus, the migration should have made slum demolition obsolete as a cure for housing ills...
...The FHA would stimulate the builder to earmark a portion of his project for rental units for this program...
...A major problem in private projects is not so much the fear of Negro occupancy as the lack of know-how by public officials and the relatively small number of Negroes who are financially able to apply for new housing...
...A heavier concentration of non-white families in public housing because of low incomes and displacement in slum clearance...
...Coordination by the planning agencies would then be more meaningful...
...If defaults become widespread, the Government- or FHA-insured loans would undoubtedly be used to bail out the mortgage-lenders to the extent of billions...
...In such a crisis, one would expect the Federal Government to be planning a housing program of major proportions...
...The most constructive blessing the home-owner received was the unanticipated gift of inflation...
...Housing can no more be curtailed than food or clothing...
...This means a more intensive program by state and local anti-discrimination commissions aimed at educating personnel managers, union officials and guidance counselors, improving apprenticeship-training programs and educational opportunities in skills...
...8„ A socially sound public-housing program...
...Meanwhile, the Urban Renewal Administration can push for more vacant land development within the cities and the use of underdeveloped land for more intensive improvements...
...Conceived as a demonstration, the program made many demonstrations...
...He took the risk until a buyer came along or his apartments were rented...
...some, like public housing, are slowly withering away...
...Families in the lower-income groups could no more afford new housing than they can today, and they dwelt in slums...
...Every family should have access to sound ownership on reasonable terms...
...VA-insured mortgages are second mortgages, and the FHA itself insures modernization loans on houses subject to first mortgages...
...When a highway is planned, for example, extra land can be acquired- for future housing and commercial developments'at the exit openings or at other strategic places...
...The most critical issue in housing today is the misuse of Federal credit...
...Since the home-buyer was the only participant not represented in Washington, it should have been no surprise that his share of the operation alone remained speculative and uninsured...
...HOUSING: A New Program By Charles Abrams Twelve years after the war and 23 years after the Federal Government first stepped into the housing picture, America is no nearer to solving its housing problem than when it began...
...They are equipped to manage but not to plan, organize and build...
...A program emphasizing demolition in a time of shortage and predicated on the existence of a permanently poor class to be relegated to an institutional environment was foreign to the American scene...
...The FHA and HHFA could be potent forces if they made aid conditional upon meaningful local plans...
...An increase in Negro income is indispensable...
...The plan would work as follows: Any eligible low-income family would qualify for tenancy in any new or substantially rehabilitated building which had been approved as to rental and standards...
...Curtailment of slum-clearance and urban-renewal operations in such Negro sections would reduce the heavy backlog of displaced Negro families who must turn to public housing...
...Housing for the elderly is still in embryo...
...It must demand legislation, deal with Congressional committees, and encourage the public-works agencies to take more responsibility for planning...
...The program also proved that a municipal agency could acquire large areas of land within a city and operate with little or no graft, that housing for the underprivileged and replanning of neighborhoods are public purposes, that housing-authority bonds are salable at very low interest rates, that our ulcerated urban terrains can be regenerated if the legal powers are defined and translated into workable legislation...
...But no sooner had slum clearance gotten under way than recovery set in, bringing a great migration of Negroes, Puerto Ricans and Mexicans to the cities...
...some, like the Federal National Mortgage Association and tho Veterans Administration mortgage program, are recent innovations whose main aim was to help out the big lending institutions...
...Building costs rose another 3 per cent in 1957...
...the cities are busy with too many other problems...
...The building entrepreneur supplied the equity money and borrowed the mortgage money he needed to finance his job...
...Among the current manifestations are suburban zoning ordinances designed to protect the status quo, wholesale evictions in cities with inadequate compensation, extension of Federal benefits to the more vocal in the economy, and perversions of granted powers and funds by local governments (e.g., zoning into racial zoning, slum clearance into Negro clearance, urban renewal into Negro removal, and police powers over housing into devices for keeping out "undesirables...
...A planning division with ample staff and powers should also be set up by the HHFA administrator...
...Today, an owner who fails to meet a single payment loses his home...
...We have reached the point where the housing problem involves much more than public housing...
...Each city tenant who establishes himself economically should have the right to buy his apartment by making a small down payment and giving back a mortgage on his individual apartment with an agreement to pay his proportion of the operating costs...
...Within the last 20 years, a revolution has occurred in planning and housing...
...A greater obligation for intercity planning may have to be assumed by the state and for interstate planning by the Federal Government...
...Many still do without challenging the social status of their neighbors...
...We know little of community facilities...
...Moreover, with individual mortgages on each apartment rather than a blanket mortgage on the building, each cooperator could feel secure in the ownership of his apartment without facing foreclosure when his neighbors default...
...A house costing $8,000 in 1941 is priced at $20,000 today...
...To make this possible, a supplemental rental subsidy should be given to stimulate the building of rental housing and reduce the cost to the tenant...
...Cooperative housing has lagged in the United States because no experienced, well-financed cooperatives have ever been set up to assemble the cooperators, buy the land and build the housing...
...Many want to be owners instead of tenants...
...The problem must be dealt with if public housing is not to degenerate into a medium for neighborhood and school segregation...
...A dichotomy has thus been created between planning in theory and planning in action...
...Every tenant should be looked upon as a prospect for a non-subsidized apartment, not a permanent charity case whose ascent from poverty would be a violation of the bond...
...Unless it is resolved, public housing and urban renewal will be blocked and neighborhood stability will continue to be threatened...
...These aims should be: 1. A housing program within the framework of our institutions...
...Despite billions in Federal commitments, we are still a nation of home-hungry people: a nation of the great un-housed, mis-housed or dis-housed, yearning to be re-housed...
...This means planning that will define its goals, salvage our cities, nourish neighborhood growth in cities and regions, and make our cities and suburbs more interesting to live in...
...Private builders receiving FHA assistance would be required to include a specified number of such Federally financed low-interest dwellings in each development...
...But there is a Newton's law in politics as in physics, and a reform set in motion continues in motion...
...It makes no provision for such non-mythical and non-average types as transients, elderly persons, single persons, working mothers, workers at home, widowers with small children, and large families...
...The quota system originated as part of ah immigration policy to exclude certain minorities, not include them...
...These established facts bear restatement: • Before the great migrations, Negroes lived in the same areas and often in the same blocks with whites...
...By 1975, according to John T. Howard, the built-up parts of our metropolitan areas will cover almost twice as much land as they do now—almost 10,000 square miles that are now rural or vacant...
...4. A housing inventory offering reasonable freedom of choice...
...To most of them, the idea of legislative or political action has been taboo...
...Organization has too often depended upon the spontaneous germination of a small group, usually disparate folk with conflicting ideas, hopes and wives...
...some took forms like urban renewal...
...Much could be done administratively if the state and Federal agencies that initiate construction were more aware of their opportunities...
...There has been increasing disregard for the rights or benefits which should accrue to the mass of the people...
...The HHFA should be provided with an initial appropriation of $2 billion for direct loans to low-income families at interest rates ranging from zero to the market rate, depending on family income...
...A little headway might be made by education, but more will be achieved by the use of inducements or law...
...This means an end to social isolation in neighborhoods, of housing famine, of arbitrary zoning laws and other restrictions that check free access to areas of better opportunity...
...Yet, a planning movement has failed to keep pace with the vast expansion of the power to plan...
...the lenders are concerned with Government insurance and interest rates...
...While the reformer made a target of the slum, the real-estate lobby made a target of public housing...
...We need 2 million houses a year but are building less than a million...
...There is nothing a mass clearance policy can accomplish that cannot be accomplished just as well by an earthquake...
...Almost none of the housing, whether or not built with Government .aid, is available to migrants, minorities, low-income families, the elderly and" the millions of others who need housing most...
...Capitalism has produced mutual non-profit organizations like the mutual insurance company and the savings bank...
...This would be equivalent to a 90-per-cent first mortgage at just under 4.1/2 per cent...
...We provide separate retreats for the child, the mother and the father, rather than for the family as a unit...
...The public's power to buy land for "public use" has been expanded from "use by the public" to "public benefit," which means that its acquisition powers are almost limitless...
...The houses would be built by both private builders and local housing authorities...
...Families displaced by "urban renewal," i.e., subsidized slum clearance by private builders, would be eligible for the subsidy and would now have access to private rather than institutional public-housing projects in economically balanced communities...
...This requires housing for non-average as well as average families under a varied system of tenures including tenancy and cooperatives as well as ownership...
...But, except for the New York cooperatives, no similar instruments exist for building cooperative housing...
...Freedom of movement...
...Mother needs bridge, father needs poker, baby needs a sitter...
...The family would receive an annual subsidy based upon its capacity to pay...
...The cooperative corporations should be directed at first by public-spirited citizens and ultimately by the cooperators themselves...
...The formula should be modified...
...Is it segregation to provide small supervised projects of 30-50 units which are occupied entirely by the elderly when they are located in a varied neighborhood...
...Family income under such a plan would be re-examined every three years and the interest rate adjusted accordingly...
...every Federal agency concerned with minorities...
...others go on relief because it doesn't pay to work...
...Within cities, the local housing authorities should build smaller projects that blend with existing neighborhood patterns...
...Increased scarcity of low-cost housing and more partitioning of private dwellings into one-room family units because of the curtailment in public-housing construction...
...For example, a $10,000 house with an uninsured $6,000 first mortgage at 5 per cent would have a second mortgage of $3,000 at 3 per cent...
...Since the housing movement has been responsible for maj or planning operations as a by-product of its own work, and since housing and planning are interrelated, the housing movement must push city and regional planning as one of its chief functions...
...Although Government aid at the start would be essential, the cooperatives should plan to become self-supporting...
...But they don't...
...The Federal Government was now taking over the mortgage risk, permitting builders to bail out without investment, and supplying a happy dumping ground for all mortgages that soured...
...Land essential for schools, parks and other public uses would be preserved...
...Instead, its policies seem directed toward reducing the dwelling supply and intensifying the shortage...
...Condemnation of shims, building of public housing for middle-income families, resale of land for private construction, subsidies to private enterprises and zoning for esthetic uses have all been upheld...
...The formulas set up for home construction and lending are simply not set up for the lower-income family, the middle-income family, the large family, the migrant, the slum dweller, the elderlyin fact, for any of the folk who need housing most...
...This poses a new dilemma, both horns of which have been dodged by the public and by civic agencies...
...Most civic and civil-rights groups have opposed the "quota system" as a device for effecting integration, and with good reason...
...The National Housing Conference, which is the spokesman of the movement, must recruit all of the groups concerned with better cities and better neighborhoods...
...If it can raise the necessary support and rise to the task, the housing movement can become the spokesman for the better-city movement in the United States...
...Families in public housing require hope, not charity...
...Public housing was spawned when vacancies were plentiful and the main aim was to prime us out of depression...
...A recast public-housing program can find a vital place...
...When a certain percentage—say, 80 per cent—of the building becomes cooperative, tenants who have not bought their apartments could be rehoused in another section of the project...
...If the builder proposed only low-interest houses, he would be required to include some higher-cost houses to make a balanced development...
...in fact, the rates on uninsured first mortgages have often been no higher than the insured rate and sometimes they are even lower...
...Only a third of the mortgages made today are Government-insured, while the rest are conventional, nor is there any proof that FHA insurance has reduced interest rates...
...6. Effective city planning...
...State land-renewal agencies...
...Funds and staffs for planning should therefore be urged upon the public-works, urban-renewal, housing and other agencies...
...Slums persist as our slum dwellings are being cut up into single rooms into which whole families are herded...
...The tenant who earns more money should pay a higher rent and cease to be subsidized...
...Some parts disappeared...
...New rental housing is virtually at a standstill...
...Its case today can rest only on the argument that it is essential to insure lenders to induce them to lend at reasonable rates...
...In communities with a small Negro population, there should be no problem unless fear and hostility invite it by compelling Negroes to live in prescribed areas...
...What had happened was that a lobby composed of builders and lenders had reshaped the program to suit their own interests...
...A lobby campaign scuttled public housing as "socialism" and turned slum clearance into a scheme for evicting the Negro, the migrant and the poor from their footholds...
...An increased percentage of Negroes, Mexicans or Puerto Ricans in the slum core...
...Diversion of the FHA credit mechanisms to the exclusive benefit of institutions has limited competition in the mortgage market, pegged interest rates at high levels and frozen out a large segment of the people...
...This calls for widening the market for private builders so as to include low- and moderate-income families, a high and stable level of construction, and an improved product...
...Yet, a real potential for settlement lies in the executive and administrative areas, where leadership, research and demonstration could yield spectacular gains...
...Rising housing costs and interest rates, coupled with a dearth of mortgage funds, have frustrated the hopes of moderate-income families...
...In the rush to destroy and rebuild, little effort has been made to salvage the deeply rooted values of some urban neighborhoods...
...As we now face a deflation of our hopes, it becomes plain that, even if the Eisenhower Administration came to realize that cutting down housing starts means a spiraling of rents and home prices and even if we saw building zooming and mortgage money plentiful, the families who need housing most would not be getting it...
...The Federally inspired "housing boom" has all but collapsed...
...Lawrence Seaway went ahead, the effects on the surrounding area could have been planned and the necessary land acquired and improved or sold in accordance with a prepared plan of development...
...Minorities and integration...
...It is argued that second mortgages are an unsound form of financing...
...A public-housing program which in 1937 promised to eliminate every slum in the United States has been virtually abandoned —last year, only 35,000 units were authorized for the whole country, and of these only 1,610 had been placed under contract by June...
...The subsidy should not be payable on old buildings, because a primary aim would be to encourage more and better construction of new houses...
...Race-relations experts should be hired not only in the housing agencies but also in...
...Urban renewal unfortunately has so far followed the public-housing formula and confined itself within urban boundaries...
...The transfigurement of the old building-and-loan associations into the current crop of savings-and-loan associations which shun building has deprived the nation of an important source of cooperative housing...
...Financing of minority housing continues to . be a main barrier...
...Middle-income families unable to pay the going rate would be aided by a reduced rate for second mortgages...
...This is the depressing picture in American housing today, and it is time we took a fresh look at what we have done, what we are doing, why we have failed and what we can do about it...
...5. A more effective building industry...
...The slum-clearance and public-housing formulas had been borrowed from England, a tenant country with a more static working class...
...The millions of Negroes and other minorities pouring into our cities are being forced to pay the highest rents for the shabbiest dwellings, and the competition for housing is increasing neighborhood tensions in a growing number of areas...
...There is not a single state planning law that is workable...
...Many public projects have integrated Negroes and whites successfully...
...Above all, an enlarged public and private housing program would reduce the pressure of Negro applications for public housing...
...Little suburban governments rule tyrannically over the region and, though speaking for a few thousand in their locality, bar the expansion of cities involved with the destinies of millions...
...When the family pays the market interest rate, the Government would sell the mortgage on the private market, thereby effecting a mortgage desocialization...
...New York State enacted a law in 1956 barring FHA- and YA-aided projects from discriminating...
...an African mud hut is far superior to a one-room Harlem flat into which a whole family has been herded...
...Rental housing should be an important part of the housing inventory, serving those unprepared or unwilling to buy...
...Theoretical thinking has been isolated among foundations, universities and a few professionals and their trade journals...
...The builders want as few restraints as possible...
...In 1935, the Federal Government therefore stepped into the housing and mortgage pictures to help prime an economic upturn...
...If we accept the fundamental principle that the Government should not underwrite risks which the private market will assume, we can find any number of ways to implement the proposal...
...Many of our swelling cities have been facing these conditions: ^ • An irreducible slum core, as slum clearance was slowed by the increasing difficulty of relocating displaced families...
...The human stakes and the vast social and economic stakes are too great to be tackled piecemeal or with antiquated theories...
...its implications have been underestimated...
...It is time, therefore, that a program was planned for the long range and fulfilled irrespective of private pressures and vested interests...
...These proposals must therefore include: A Reorientation of the Housing & Home Finance Agency...
...State or county authorities should be formed that can buy land outside cities...
...The American program incorporated some of the British myths and added a few of our own, e.g., that the poor will continue poor, that the poor will always be tenants, that the poor deserve only minimum accommodations...
...The poorest village in India or Africa has at least the advantages of ownership, a more clement climate, trees and a community...
...One would be to set up a Government mortgage bank with the same discount facilities as national banks...
...The Government now insures risks, condemns land for many uses and spends money for an infinite number of purposes, good and bad...
...A 45-year amortization and a nominal interest rate would enable poorer families to buy in cities or suburbs...
...When a family improves its income, it should not be penalized by being forced to pull the children out of school, give up neighborhood associations and move back to a slum...
...If integration of neighborhoods, schools and public undertakings is to be attained "with deliberate speed," there must be attention to the evolving occupancy pattern...
...Revision of public housing...
...Housing with special facilities for child care and housecleaning would save many working mothers from despair— and save many cities from unnecessary relief costs...
...Motive, however, is as important in race relations as in civil rights...
...Another way is for the Government to charter state cooperative corporations with directors initially appointed by the Governors...
...Projects could include multiple housing as well as free-standing houses...
...some, like the FHA and the Home Loan Bank, expanded beyond the dreams of the sponsors...
...Simultaneously, the outlying areas have been beset with vexations in the form of unplanned growth, financial embarrassments, school shortages, inability to pay for needed utilities, and an ever-lengthening journey to work for their residents...
...Yet, if housing funds are to be used for those who need them most, the public must learn to assess these dull formulae as well as the eloquent promises...
...There was no coherent long-term plan to solve the housing problem but a series of experiments, demonstrations and innovations...
...This type of scheme would be a proper use of the Federal insurance function and would make both the ownership and mortgage structures more sound...
...As the Duchess told Alice, "Everything's got a moral if you only can find it," and perhaps Gibbon the historian suggested that moral when he said, "All that's human must retrograde if it does not advance...
...We increased the proportion of home-ownership—but spiraled the price and the debt...
...Amendment of the Federal urban-renewal law to authorize subsidies for the state agencies would lead to enactment of state laws and spur this vital planning program throughout the nation...
...This means a competitive market for those who can pay the going interest rates and, for others, mortgage funds on terms within their means...
...We should lean toward the last...
...Meanwhile, more and more public housing should be built so that we can simultaneously expand the housing supply and desocialize the ownership...
...The state and Federal governments would contribute the essential subsidies for acquisition and improvement, and the land would be resold at market value...
...The Home Loan Bank System could, for example, charter building-and-loan cooperatives that would accept deposits and build cooperative ventures as European cooperatives do...
...Despite the imperative need for planning, no group speaks for it in Washington today...
...The only market being tapped is the higher-income group...
...In practice, the poor—at least the white poor—have shown an extraordinary tendency to move up...
...2. The emphasis of the program should be shifted from clearing slums to increasing the housing inventory...
...The racial problem has been treated as if it did not exist...
...State land-renewal agencies should be organized for the main function of acquiring vacant land outside city boundaries...
...Its urban-renewal policy is evicting tens of thousands of poor families...
...Not only could the subsequent developments then be planned along with the road improvement but the public instead of the land speculator could cash in on the increment in value...
...The Government also insured deposits to encourage greater deposits of savings into the mortgage-lending institutions...
...the suburbs are bent on protecting their little vested interests...
...The mis-assumption of public housing has been that there will always be a stratified class in the United States and that stratified projects must be their permanent habitat...
...A Home Bank Loan System enabled them to borrow on their mortgages, which gave them greater liquidity...
...Not that the housing program achieved no gains at all, but each gain had its offset...
...The current housing program is geared to a mythical average family of husband, wife and two children...
...A nation of too many standard houses will become a nation of too many substandard houses...
...The main potentials for planning are not in general planning laws that separate planning from function, or in planning commissions—rather, they are corollaries of physical improvements and of the agencies that make them...
...Because of rising building costs, many in the middle-income group could no longer afford new housing and lived in used dwellings...
...The Government's tight-money policy continues to stifle the mortgage market and has made interest rates zoom...
...Is placement of the aging in public housing unsegregated, or is it really non-segregated living in a project which is segregated by income...
...The 10-per-cent stake of the home-buyer was now the sole remnant of risk-taking...
...This does not mean that the public-housing program should be scrapped...
...We have no real knowledge of their numbers, their requirements, their distribution...
...More overcrowding and less privacy in the slum core as low-income families kept pouring in...
...Since the present policy is geared to the welfare of the greater pressures instead of the greater number, it seems clear that we need a re-examination of our basic aims and a program to achieve them...
...This implies a nation of socially sound communities in place of the homogeneous formations with their tensions and threats to neighborhood stability...
...Steel decided to build a new plant in Pennsylvania or the St...
...Housing particularly lends itself to such corruption because of the complexity of its financing formulae...
...The planning "movement" that is desperately needed in the present chaos is at best a spasm, too often expressed in local zoning activities, in policies rigged up by the local private-pressure groups, and in idealistic intramural elocution that rarely echoes through to those responsible for putting the improvements into effect...
...2. A sound home-ownership structure...
...Effective action need not be arbitrary...
...A vast potential market exists for homes on reasonable terms for the growing number of new families, for replacements due to demolition by public works, for migrants into the cities and for overcrowded families...
Vol. 41 • January 1958 • No. 62
