HD 
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mmp Plans 
 
 FOR CITIES 
 
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 the lack of 
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 NtE,W OFCLEA-TM^*, LA. 
 
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 ITHACA, N, Y. 14853 
 
 .J^ine Arts Library 
 '^'"Sibley HaU 
 
HOUSING PLANS 
 FOR CITIES 
 
 'Building is the expression of a Qtfs growth; 
 The Lack of Building is Its Stagnation 
 
 CQttvriffht_1920. bv_Thfi_Snutberr Pine Association 
 
HP 
 
 ^ 
 
IN APPRECIATION. 
 
 The Southern Pine Association is indebted for 
 most of the material in this booklet to the Chambers of 
 Commerce, Housing Corporations and manufacturing 
 institutions whose plans to increase the housing facili- 
 ties of their respective cities have met with such con- 
 spicuous success and are herein outlined. 
 
 These institutions have generously submitted their 
 plans and experiences for the benefit of other com- 
 munities. 
 
Cornell University 
 Library 
 
 The original of tiiis book is in 
 tine Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924016066056 
 
Foreword 
 
 ^ ]| ^liE "For Rent" sign has taken its place in 
 \_ many cities with the Dodo bird and other ex- 
 tinct features of a bygone age. With the departure 
 of the "For Rent" signs has come overcrowding of 
 cities, attended by the evils of bad housing and in- 
 dustrial unrest. 
 
 Every employer knows these conditions spell 
 costly labor turnover, reduced efficiency of workers 
 and increasing overhead charges. Production neces- 
 sarily is shortened and a train of industrial evils 
 follows. 
 
 A community of home owners is the ideal com- 
 munity. Such a happy condition makes for pros- 
 perity and contentment. The stability of the entire 
 social and industrial fabric of the country revolves 
 around the home. 
 
 Any causes which restrict the opportunity for 
 home owning strike at the foundations of modern 
 industrial life. Workers who are not home owners 
 are more easily subject to all the cross currents of 
 unrest and radicalism. They lack the stamina and 
 conservatism that home owning gives. They are 
 constantly shifting. Employers know what this 
 costs industry. 
 
 Unfortunately, present-day conditions have 
 tended to restrict home owning. Perhaps it would 
 be too much to say that inadequate housing is at 
 the bottom of the present industrial unrest, but no 
 one can doubt it has been a large, determining fac- 
 tor. 
 
 In this booklet the Southern Pine Association 
 hopes to be able to give enlightenment on the very 
 difficult and complex housing situation. 
 
Housing Plans for Cities 
 
 CHAPTER I. 
 
 Cities Have Acute Housing Problem 
 
 The question of providing adequate housing is one of the 
 most pressing and acute problems confronting hundreds of com- 
 munities. It is a problem not easy of solution or permitting of 
 postponement. Delay only increases the many obstacles to meet- 
 ing construction needs of the country. 
 
 War restrictions caused the number of homes to fall be- 
 hind the normal needs of a growing population. This condition 
 has been aggravated especially in cities which have undergone a 
 comparatively recent and great industrial development. 
 
 The housing problem in these cities is most acute. While 
 many communities have been active in getting new industries, 
 they have given little heed to adequate housing for the hun- 
 dreds of workers the industries brought to the community. 
 
 Cities took pride in the amount of capital invested in their 
 industries, giving slight concern to the fact that sufficient and 
 decent housing for the workers was also a very proper division 
 of the industrial capital. It was a very natural oversight. In 
 the past the matter of housing had been left largely to the in- 
 dividual. 
 
 Short a Million Homes. 
 
 Perhaps if the war had not so disturbed industrial and social 
 condition.s the housing problem could have taken care of itself. 
 But the war resulted in sub-normal construction. Even com- 
 munities which have shown only normal growth are facing a 
 house shortage. 
 
 It was estimated by the Department of Labor that at the 
 close of the war the United States needed a million homes. Just 
 how much this need has been decreased or increased is difficult 
 to determine, but from general indications it is reasonable to be- 
 lieve that the shortage in homes has been increased since the esti- 
 mate of the Department of Labor. 
 
8 Housing Plans for Cities 
 
 The restrictions placed by the Government on building dur- 
 ing the war reduced house construction to only 4 percent of 
 normal in November, 1918. There has been a marked increase in 
 building since that time, but not nearly enough to meet the needs. 
 
 Every strike, every artificial obstruction to building has 
 made the crying need for housing more pressing. 
 
 This widespread lack of homes has put a heavy burden on 
 renters. Rents in many communities have advanced from 50 to 
 100 percent in the last year, with every indication forecasting a 
 further increase. This has automatically given some impetus to 
 building, but the relief has been small. 
 
 The cry for more homes is going up all over the country. 
 The demand has become so imperative' that it no longer can be 
 left to individual effort for answer, but must be met by com- 
 munity or co-operative enterprise. The smaller communities 
 have smaller problems but just as acute as those confronting 
 larger industrial centers. 
 
 The great demand for homes comes from individuals who 
 have not sufficient accumulated capital to finance building. They 
 have sufficient incomes to meet the interest on the investment 
 and also monthly payments on the principal if they are stretched 
 over a long enough period. High wages have given them re- 
 cently a greatly increased earning power, but they are able to 
 make only a small initial payment. 
 
 Not Charity, but Business. 
 
 Any means of aid for this class of would-be home owners 
 rightly should not take the form of charity. They are able to 
 pay for a home and are willing to pay. There is only one feasible 
 way for them to buy or build a home, and that is on credit. 
 
 These people are of far greater industrial and social value 
 to thfe community if they are home owners. Home owners are 
 as a class better citizens, less affected by elements of unrest, and 
 therefore more efficient workers and employes. It follows na- 
 turally that it is to the interest of the community and of em- 
 ployers of labor that these individuals become home owners. 
 
 Many civic organizations and a few large industrial insti- 
 tutions already have taken measures to alleviate the present 
 situation. They have realized their growth and continued pros- 
 
Housing Plans for Cities 
 
 perity rest largely on maintaining a class of contented employes. 
 They have come to understand that adequate and attractive 
 homes for working men and their families must be considered a 
 part of the industrial capital of the community. Rightly it is re- 
 garded as such. Too frequently industrial concerns have made 
 large provisions for housing machinery and equipment but have 
 been concerned little with the proper housing of their employes. 
 
 Growing cities, however, are finding themselves so cramped 
 by lack of housing facilities that many industries are facing the 
 prospect of having to curb their normal expansion or make some 
 provision to extend credit for home owning. Quite a few com- 
 munities, unwilling to stand still, are undertaking ambitious 
 plans for increasing home building. Many others have plans 
 only in the "talking stage," while others are hoping that the 
 problem will somehow work out its own solution. 
 
 Believing that the experience of those communities and in- 
 dustrial concerns which already have undertaken housing plans 
 is of value to other communities, the Southern Pine Associa- 
 tion has made a survey of the housing condition in cities in every 
 part of the country in an effort to learn what measures are being 
 undertaken to alleviate the lack of housing. Before going into 
 the plans of these various communities in detail, it is well to 
 consider a plan that could be adopted with few changes by al- 
 most any community which has supported a building and loan 
 association. 
 
 This plan is proposed by Mr. K. V. Haymaker, formerly 
 financial adviser to the United States Housing Corporation, 
 which was a war industry of the United States Department of 
 Labor. 
 
 As Mr. Haymaker points out, these building associations al- 
 ready have tremendous financial resources available for home 
 building and an organization perfected for handling such an en- 
 terptise. It would be a great saving in labor and money if the 
 already existing institutions were utilized. 
 
10 Housing Plans for Cities 
 
 CHAPTER II. 
 
 A Plan for the Financing of Home Building 
 
 Through Building and Loan 
 
 Associations 
 
 By K. V. Haymaker, formerly Financial Adviser to the United 
 States Housing Corporation. 
 
 Experience has demonstrated that in a vast majority of cases 
 a party desiring to buy or build a home has not sufficient cash of 
 his own to pay for the same in full. In every such case, the 
 resources of the prospective home owner must be supplemented 
 by some form of credit. 
 
 This credit almost invariably takes the form of a mortgage. 
 The most common form of mortgage is what is usually called 
 a "Straight Mortgage," that is a loan of a definite sum, payable 
 at one time at maturity, usually at the end of three or five 
 years, with interest payable annually or semi-annually. 
 
 One very serious objection to this type of loan is the fact of 
 the entire debt falling due at one time, and that maturity date 
 being in so short a time as to make it practically certain that the 
 debtor cannot, within that time accumulate funds sufficient to 
 meet it. The result is that a Straight Mortgage is rarely paid at 
 maturity, but must be renewed, with all the usual charges for 
 commission or brokerage, searching the title, extending the 
 abstract, fees for drawing and recording new papers repeated. 
 It is common knowledge among the professions connected with 
 the mortgage loan business that mortgages of this type are fre- 
 quently renewed repeatedly, and at last the borrower dies, leav- 
 ing the debt as his largest legacy to his family. 
 
 The Amortization Plan Is Better. 
 The ideal type of loan for the ordinary home builder or home 
 buyer, is a long time loan repayable on the amortization plan by 
 making small payments at frequent intervals, each of a sum 
 
Housing Plans for Cities ii 
 
 sufficient to pay accrued interest and an amortization payment 
 which would liquidate the entire debt in from ten to twelve 
 years, reserving to the borrower the right to make payments of 
 greater sums than the stipulated minimum, at any time. 
 
 The one type of institution in this country which applies all 
 its resources and restricts its activities to making this kind of 
 loans for home buying or home building is the Building and 
 Loan Association. These are so widely spread and so generally 
 known and understood, that we will at this time devote no space 
 to describing them. They are found in every state and in most 
 progressive communities, being almost as numerous as are Na- 
 tional Banks, and the paid in cash capital of American Building 
 Associations exceeds by more than 50 percent the- combined 
 capital stock of all the National Banks in America. 
 
 Building Associations are doing a most helpful work in aid- 
 ing to procure homes, but they are in no sense of the word 
 charitable institutions. They are strictly business concerns, and 
 should always be conducted with the same strict regard for 
 safety and conservatism which is observed by other financial con- 
 cerns and by individuals in making mortgage loans. In line with 
 this policy, it will be found that Building Associations usually 
 restrict the amount which they will lend on any given piece of 
 property to what is regarded as a safe, conservative margin of its 
 value. This ranges from SO to 75 percent, the amount averaging 
 about 60 percent of the value of the mortgaged property. 
 
 Where the Association makes loans up to 60 percent, the 
 remaining 40 percent must come from other sources. It is not 
 unusual for the prospective home owner to have this 40 percent 
 at command, and in such cases the combination of the home 
 owner's cash and the Building Association loan affords a com- 
 plete solution of the problem. 
 
 Credit for 100 Percent Not Advisable. 
 
 It frequently occurs, however, that the party desiring to pro- 
 cure a home cannot supply the additional 40 percent, and in 
 such cases a new problem of bridging the gap arises. We some- 
 times hear the suggestion that a family without any cash or 
 property should be afforded means by which they cari at once 
 be furnished with a home and permitted to pay for the sarne on 
 long time and easy terms. Does not this suggestion violate the 
 
12 Housing Plans for Cities 
 
 primary rules of good business sense? Is there any way by 
 which a party in this situation can obtain a line of credit for any 
 other purpose? A boy cannot start as a newsboy or boot black 
 unless he has cash sufficient to buy his first paper or his brush 
 and blacking or has established a reputation for honesty and in- 
 dustry and thrift which will inspire some one to extend him 
 credit. Why then should it be expected that credit for the full 
 value of a home should be extended to a man who has not shown 
 the characteristics of saving and thrift, which would give promise 
 of his continuing such habits by paying for the home, and proven 
 his claim to such credit by having accumulated a substantial sum 
 to apply as an initial payment on the home ? It would seem that 
 the irreducible minimum which should be required for such a 
 prospective home owner to have accumulated as such initial pay- 
 ment should be at least 10 percent of its value. 
 
 Must Bridge a 30 Percent Gap. 
 
 The 10 percent of the value furnished by the home owner 
 and the 60 percent loan from the Building Association would 
 still leave 30 percent of the value, as a gap to be bridged. To 
 meet such cases, various plans have been proposed. In many 
 communities, second mortgage companies have been organized, 
 to accept second mortgages to cover this missing sum. In most 
 cases these second mortgage companies have been organized for 
 purely speculative purposes. It is recognized that these second 
 mortgages are a lower grade security than first mortgages and 
 involve greater risk ; and for that reason organizations accepting 
 them either exact a higher rate of interest or accept them only at 
 a discount from their face value. Frequently both these features 
 are found in the second mortgage plan. 
 
 In some cases, public spirited liberal minded organizations 
 or individuals take an interest in solving this problem on more 
 generous terms; being more desirous of seeing the community 
 built up than of reaping individual profit. In either case, the 
 extending of this credit which home owners require in addition 
 to the sums which can be borrowed on first mortgage from a 
 Building Association involves an independent organization, ex- 
 pensive to operate and requiring much time and labor in vvork- 
 ing out the details of negotiating the second mortgages and in 
 
Housing Plans for Cities 13 
 
 the accounting system required and the collection of the pay- 
 ments thereon. 
 
 Assuming that the parties who wish to stimulate the build- 
 ing of homes by assisting to finance those who need an exten- 
 sion of credit greater than the B.uilding Association will accept 
 on first mortgage, have contributed to a fund to be used for this 
 purpose, the following is suggested as a practical plan to utilize 
 these funds : 
 
 1. Let this organization (which we will call the Home Aid 
 Company) deposit its funds in one or more of the existing Build- 
 ing Associations now operating in the community. This plan at 
 once places the funds of The Home Aid Company where they will 
 be applied to home building and also where the funds are par- 
 ticipating in the regular dividends which the Association pays to 
 its depositors. 
 
 2. When a case arises that an applicant for a loan requires 
 more money than the 60 percent which the Association will lend, 
 say he needs an additional 30 percent, the Association calls the 
 case to the attention of the Home Aid Company, which investi- 
 gates the facts and the party who wants the added credit. If 
 after this investigation the Home Aid Company decides to as- 
 sist the applicant, the Home Aid Company assigns to' the Asso- 
 ciation from the funds it has on deposit in the Association a sum 
 equal to the 30 percent required to be held by the Association as 
 a collateral to the borrower's mortgage. 
 
 3. The Association then takes a mortgage fiom the bor- 
 rower for 90 percent of the value of the borrower's property and 
 has as additional security the 30 percent of the value of the prop- 
 erty in the cash of the Home Aid Company which has been as- 
 signed to it. 
 
 4. When the semi-annual settlement day of the Associa- 
 tion arrives, the Association will release to the Home Aid 
 Society such part of the deposit it holds by assignment as equals 
 the net payment made by the borrower on his debt during the 
 fiscal period just ended. 
 
 5. This process is repeated until the borrower has re- 
 duced his debt by an amount equal to the 30 percent for which 
 the Home Aid Company has been his surety, when the sum as- 
 signed is fully released. 
 
14 Housing Plans for Cities 
 
 6. In the meantime the entire fund of the Home Aid Com- 
 pany has been participating in the regular dividend paid by the 
 Association and no part of it has at any time been idle. 
 
 7. In case the borrower defaults in his payments for any 
 cause, the Home Aid Company can protect itself in the same 
 way it could do if it held a second mortgage, either by taking 
 over the property or securing a new purchaser who will assume 
 the mortgage and continue the payments. 
 
 This plan has many advantages over the second mortgage 
 plan. 
 
 (a) The borrower has but one debt and one creditor to 
 look after. There is a psychological aversion to two mortgages 
 and two creditors which is far more oppressive than one mort- 
 gage and one creditor, even though the one debt amounts to as 
 much as the two combined. 
 
 (b) The expense of operating the Home Aid Company on 
 the plan above outlined will be a mere fraction of the cost of 
 running a second mortgage company. 
 
 (c) The second mortgage company would have much of 
 its fund idle at least part of the time, either before it has been 
 loaned or the partial payments as they are received, for the in- 
 terval until they have been again invested. 
 
 (d) All the net payments made by the borrower on his loan 
 are applied at each semi-annual settlement to release the fund 
 assigned by the Home Aid Company as collateral, so that the 
 Home Aid Company could have its assigned funds released at 
 least as quickly as though it held a second mortgage. 
 
 (e) The cost of drawing and recording two sets of mort- 
 gage papers is avoided, the entire-^bt being covered by the one 
 mortgage. 
 
 (f) It could not be expected that those interested in the 
 Home Aid Company would thus assume the responsibility in- 
 volved in providing collateral to the borrower's loan without 
 compensation. Borrowers would be willing to allow a reason- 
 able discount to the Home Aid Company for the credit which it 
 advances. This discount would be an additional profit to the 
 Home Aid Company above the regular dividend paid by the 
 Association on the deposit made by the Home Aid Company in 
 the Association. 
 
Housing Plans for Cities i§ 
 
 This discount and the dividend together would make the 
 profit to the Home Aid Company on its investment fully as great 
 as could be derived by a second mortgage company when the 
 allowance is made for the saving in the expense of operating 
 the Home Aid Company on this plan as compared with the cost 
 of operating a second mortgage company. 
 
 Every growing community should have one or more strong 
 financial institutions with aggregate resources sufficient to 
 finance the home building needs of its citizens. The most effi- 
 cient type of institution for this work that has ever been de- 
 vised, is a Building Association planned and operated on the 
 most modern, up-to-date ideas for these institutions. With these 
 institutions made popular in a community, which can be done 
 by organizing on a fair and equitable plan, and conducted by in- 
 telligent and efficient officers, they will attract the savings of 
 such a number of the wage-earners and working men as to af- 
 ford ample funds for this purpose. One Association at Columbus, 
 O., has over $20,000000 of assets. Another at Oklahoma City 
 has grown to $5,000,000 in its first six years' business. By sup- 
 plementing the work of the Associations by the plan above out- 
 lined the community can finance its home building with little 
 difficulty. 
 
j6 Housing Plans for Cities 
 
 CHAPTER III. 
 
 Industrial Housing Plans 
 
 Many large industrial institutions have recognized the ad- 
 visability of providing means for their employes to become home 
 owners. They have gone into this phase of business with no in- 
 tention of reaping a direct profit. The most they seek is to make 
 a legitimate interest on their investm,ent. 
 
 However, they do not look on their efforts as charity but 
 rather as a legitimate investment in obtaining a contented, effi- 
 cient and stable body of workers. The concerns feel that the 
 reduction in labor "turnover" and an increase in efficiency more 
 than offset the expense. They have approached the problem 
 from a practicable, workable basis. As their experience elimi- 
 nates all guess work as to proposed plans the Southern Pine As- 
 sociation believes the plans which they have undertaken suc- 
 cessfully will be of interest to other industrial concerns and 
 communities. 
 
 Goodyear Project is Ambitious. 
 
 One of the most ambitious housing plans has been under- 
 taken by the Goodyear Tire & Rubber Company to provide 
 homes for their employes at their Akron, O., plant. The Good- 
 year Company was not content to provide merely shelter or 
 meager abode for its employes. On the contrary, it went to great 
 pains and thought to provide homes of marked beauty with at- 
 tractive surroundings. The company was fortunate in obtain- 
 ing a large tract of land that lent itself readily to the skill of 
 the landscape artist. The architect and the landscape artist were 
 able to join their labors in developing the project as a whole. 
 
 All these homes were designed for the maximum of comfort 
 and convenience and are thoroughly adaptable to the modern 
 family needs. They are artistic in design, with a pleasing di- 
 versity of style as the builders of the project believed beauty was 
 a home essential. In designing the houses the topography was 
 considered, so as to obtain a harmonious relation. Solid worth 
 was given these homes by the excellence of construction. 
 
Housing Plans for Cities 17 
 
 The average lot is SO feet in width and 115 feet deep. They 
 vary considerably in shape so as to better conform to the 
 topography. The houses are built to fit the lot and the surround- 
 ings. Large living rooms,, modern plumbing, attractive lighting 
 fixtures and fireplaces are some of the features of the houses. 
 Most of them have six rooms and a bath. 
 
 Construction costs have been kept at a minimum by buying 
 material for several hundred houses at one time. It is delivered 
 to the contractor by trainload lots. This means a big saving to 
 the purchaser. 
 
 The Goodyear Company will sell to individuals outside its 
 organization as well as to its employes. However, more advanta- 
 geous terms are offered employes than outsiders, as the chief interest 
 of the company lies in providing attractive homes for its workers. 
 
 Two mortgages may be placed on the property. The first 
 mortgage is held by the Metropolitan Life Insurance Company of 
 New York. The second is given the Goodyear Company for the 
 balance of the principal. A minimum payment of 2 percent is 
 required on the principal. This is an unusually attractive term as 
 most housing plans require a down payment of at least 10 percent. 
 Only a private concern which had a special interest in building up 
 a permanent body of contented and efficient workers could be 
 expected to offer such generous inducements to home owners. 
 
 The semi-monthly payments will pay off the second mortgage 
 in ten years and the first mortgage in ten years more. Provision 
 is made to allow extra payments to be made and the balance due 
 may be paid at any time. 
 
 Two values are placed on the property — the Goodyear value, 
 which is the actual cost, and the real estate value, which is 25 
 percent higher than the cost value. To discourage speculation 
 and to prevent outsiders reaping the benefits offered the employes, 
 the property is sold to employes on the basis of the real estate 
 value. But if at the end of the fifth year the purchaser is still in 
 the employ of the company and still retains title to the property 
 and has made the payments as agreed, the difference between the 
 two values and the interest thereon is cancelled by crediting his 
 account with that amount. 
 
 Individuals outside the employ of the company may purchase 
 homes of the Goodyear Company on the basis only of real estate 
 value. The difference between these two values represents the 
 
i8 Housing Plans for Cities 
 
 legitimate profit that would go to any corporation for supervising 
 the construction, financing and handling the secorjd mortgage on 
 the basis of the usual discount rates. A warranty deed is given 
 the purchaser at the time of sale. 
 
 For its own protection the company carries tornado and fire 
 insurance on all residences. By special arrangement with the 
 •Metropolitan Life Insurance Company home buyers- may take out 
 a policy with diminishing premiums which in the case of death will 
 pay one or both of the mortgages depending on the amount of in- 
 surance taken. 
 
 The usual payment plan was adopted by the company with 
 the exception that payments are made semi-monthly instead of- every 
 30 days: The following table shows the reduction of the first and 
 second mortgages on a property costing $3,700 with a real estate 
 value of $4,625: 
 
 On the Basis of 2% Down Payment. 
 
 First Mortgage $1850.00 
 
 Principal Balance 
 
 At end of Reduced by Due 
 
 1st yr. (Paymt. $6.62 semi-monthly) $ 49.33 $1800.67 
 
 2nd yr. (Paymt. 6.62 semi-monthly) 52.41 1748.26 
 
 3rd yr. (Paymt. 6.62 semi-monthly) 55.65 1692.61 
 
 4th yr. (Paymt. 6.62 semi-monthly) 59.07 1633.54 
 
 5th yr. (Paymt. 6.62 semi-monthly) 62.72 1570.82 
 
 6th yr, (Paymt. 6.62 semi-monthly) 66.59 1504.23 
 
 7th yr. (Paymt. 6.62 semi-monthly) 70.72 1433.51 
 
 8th yr. (Paymt. 6.62 semi-monthly) 75.02 1358.49 
 
 9th yr. (Paymt: 6.62 semi-monthly) 79.65 1278.84 
 
 10th yr. (Paymt. 6.62 semi-monthly) 84.56 1194.28 
 
 11th yr. (Paymt. 6.62 semi-monthly) 89.78 1104.50 
 
 12th yr. (Paymt. 6.62 semi-monthly) 95.40 1009.10 
 
 13th yr. (Paymt. 6.62 semi-monthly) 101.25 907.85 
 
 14th yr. (Paymt. 6.62 semi-monthly) 107.47 800.38 
 
 15th yr. (Paymt. 6.62 semi-monthly) 114.11 686.27 
 
 16th yr. (Paymt. 6.62 semi-monthly) 121.15 565 12 
 
 17th yr. (Paymt. 6.62 semi-monthly) 128.65 43647 
 
 18tH yr. (Paymt. 6.62 semi-monthly) 136.57 29990 
 
 19th yr. (Paymt. 6.62 semi-monthly) 144.99 154 91 
 
 20th yr. (Paymt. 6.62 semi-monthly) 154.91 Paid up 00 
 
Housing Plans for Cities 
 
 J9 
 
 At end of 
 1st yr. (Paymt. 
 2nd yr. (Paymt. 
 3rd yr. (Paymt. 
 4th yr. (Paymt. 
 5th yr. (Paymt. 
 
 Second Mortgage $2682.50 
 
 
 
 Principal 
 
 Balance 
 
 
 Reduced by 
 
 Due 
 
 $11.30 semi-monthly). .. 
 
 ...$113.57 
 
 $2568.43 
 
 11.30 semi-monthly) . . . 
 
 ... 120.56 
 
 2447.87 
 
 11.30 semi-monthly) . . . 
 
 ... 128.04 
 
 2319.83 
 
 11.30 semi-monthly) . . . 
 
 ... 135.92 
 
 2183.91 
 
 11.30 semi-monthly) . . . 
 
 ... 144.32 
 
 2039.59 
 
 Less. 
 
 
 925.00 
 
 and 
 
 Int. 
 
 250.78 
 
 
 1175.78 
 
 863.81 
 
 6th yr. (Paymt. $8.33 semi-monthly) 152.48 711.33 
 
 7th yr. (Paymt. 8.33 semi-monthly) 161.87 549.46 
 
 8th yr. (Paymt. 8.33 semi-monthly) 171.88 377.58 
 
 9th yr. (Paymt. 8.33 semi-monthly) 182.52 195.06 
 
 10th vr. (Paymt. 8.33 semi-monthly) 195.06 Pd. up 
 
 These payments covering a total of twenty years are about 
 as easily met by the purchaser as if he were paying rent, and at 
 the end of that time he owns his own home. At the end of five 
 years he already has a profit of about a thousand dollars on his 
 investment. This is an especially attractive inducement. 
 
 Firestone Aids Its Employes. 
 
 The Firestone Tire & Rubber Company, also located at Akron, 
 O., has developed a housing plan through its subsidiary, the Coven- 
 try Land and Improvement Company, very similar to the one un- 
 dertaken by the Goodyear Company. Its project, known as Fire- 
 stone Park, a suburban tract, was chosen for its natural beauty 
 and its nearness to working centers. As materials for scores of 
 houses were contracted for at one time, the company was able to 
 sell attractive homes to its employes for prices below the average 
 cost of such homes. 
 
 The tract was developed so as to aiiford spaciousness and plenty 
 of fresh air and sunshine. Large grounds were set aside for 
 schools, and a recreation park laid out. 
 
 The houses were first sold on a minimum initial payment of 
 5 percent and monthly payments of 1 percent of the balance. 
 
20 Housing Plans for Cities 
 
 The minimum payment was increased later to 10 percent, as it 
 was believed that all those who had a real and permanent desire 
 for a home. would have shown sufficient thrift to be able to make 
 at least a 10 percent payment. 
 
 The monthly payments cover a term of from 12 to 14 years. 
 Practically all the homes are sold on a land contract, purchaser 
 assuming a first mortgage. There is no life insurance feature, as 
 in the Goodyear project, and there are no re-sale limitations. The 
 response give by the employes of the company is indicated by the 
 demand for the houses, which is greater than the supply. All the 
 houses are modern, attractive both in interior and exterior, and 
 designed to give the maximum of comfort and convenience. 
 
 General Motors Pays $800.00 on Homes. 
 
 Flint and Pontiac, Michigan, because of the war restriction 
 placed on home building by the Government, fell so far behind in 
 their housing that they seemed to be' hopelessly outdistanced by 
 the needs of their rapidly growing industries. It reached the point 
 where building could not be left to individual effort if these industries 
 were to maintain their maximum output and to continue expansion. 
 
 The General Motors Corporation took hold of the problem. It 
 had two objects to obtain, the first to provide adequate housing for 
 sufficient workers to permit plans for expansion and second to 
 maintain a reasonably permanent body of contented workers. Labor 
 turnovers each year are costly for any industry and the General 
 Motors Corporation believed it could cut this cost by making its 
 employes a body of home owners. The company proposed to con- 
 tribute $800.00 towards the cost of any employe's home, provided 
 it was worth $3500.00 to $8500.00. 
 
 The company emphasized to its employes that it did not con- 
 sider this donation of $800.00 a matter of charity but a cold busi- 
 ness proposition. It was good business, it believed, to invest $800.00 
 with certain reasonable restrictions, in a contented, more efficient 
 workman. 
 
 The Modern Housing Corporation was formed to build resi- 
 dences selling for $3,500.00 to $8,500.00. By building on a large 
 scale the cost was kept as low as possible. The company offered 
 assistance to its employes on this basis. 
 
 Each employee buying his home from the Modern Housing 
 Corporation costing anywhere from $3,500 to $8,500 will have 
 
Hoitsing Plans for Cities 2j 
 
 paid for him by the General Motors Corporation, to be used as 
 part of his first payment, $800.00. He will not be charged any 
 interest. This money will not be charity to the employe, nor will 
 there by any philanthropy about it. It will simply be a cold clear- 
 cut business proposition in which employer and employe both bene- 
 fit, as should be the case in every sound commercial transaction. 
 As a compensation for this advance, the General Motors Corpora- 
 tion asks each buyer to agree in case that he resigns or is dis; 
 charged from its employ, or dies within five years from his con- 
 tract of purchase, that the company, within thirty days after learn- 
 ing of his death, or after the happening of either of the other 
 events, has the privilege of buying his home and of paying for it 
 by crediting him with all payments made (not including the $800 
 advanced by the company) for principal, interest, taxes, assess- 
 ments, insurance, and charging him with a sum equal to rent at 
 the rate of 10 percent per annum on the selling price mentioned 
 in the contract, from the date of the contract, no deductions being 
 made for depreciation and no interest being allowed on either side 
 of the statement, the balance being paid to whichever party is 
 entitled to it. The result will be that the buyer will simply have 
 paid rent during the period of his occupancy of the home, which is 
 what he would have done had he made no contract of purchase. 
 He is just relieved of his contract. 
 
 The General Motors Corporation goes still further. It will 
 advance $800 to any employe desirous of buying a home for his 
 own occupancy in either Flint or Pontiac, provided it is worth 
 from $3,500 to $8,500. The reservations regarding the money ad- 
 vanced in the second case are practically the same as under the 
 first proposal, with the exception that a third party must be con- 
 sidered and his rights in the deal also protected. 
 
 If an employe has special plans drawn for himself and can 
 arrange with outside contractors to build his home, the General 
 Motors Corporation is willing to advance the $800 if the plans 
 and cost of the home meet the company's approval. He is re- 
 quired to submit bids from at least two independent contractors. 
 The company reserves the right to purchase the home under the 
 some contingencies as outlined in the first proposal. The company 
 also offers the same financial assistance where the Housing Corpora- 
 tion builds the home, according to the owner's special plans. 
 
Housing Plans for Cities 
 
 If the employe remains in continuous employment five years 
 from the date of his contract to purchase, he will no longer be under 
 obligation to sell the home to the company. Neither will he have to 
 return the $800 or pay any interest on it. 
 
 Reduction in Labor Turnover Pays. 
 
 What a reduction of the labor turnover means in dollars and 
 cents is evidenced by the company's liberal offer of $800 reward 
 for five years continuous service. That there might be no strings 
 on the offer, and to permit an employe to reap a profit on his in- 
 vestment if the opportunity to do so presents itself and if he desires 
 to leave the company before the end of the five-year period, he 
 may be freed of his obligation to resell to the company by paying 
 the $800.00 advanced, plus the balance due on the contract. 
 
 The purchaser of a home from the Modern Housing Corpora- 
 tion is required to make a minimum cash payment or at least 5 
 percent of the purchase price. The buyer also is required to devote 
 25 percent of his earnings each year to payments of principal, 
 interest, taxes and fire insurance on his home until it is entirely 
 paid for. After deducting the estimated cost of insurance and 
 taxes, the balance of the 25 percent is divided into twelve 
 equal parts which represent the twelve monthly installments. 
 
 Each of these installments pays the interest on the total indebted- 
 ness and also a prartion of the principal. As time passes the in- 
 terest diminishes as the principal is reduced and the difference is 
 applied to a more rapid reduction of the principal. In most cases 
 the monthly payments will be only slightly in excess of the rent the 
 owner would have had to pay for a similar home. It has been 
 estimated that the average buyer will pay for his home in ten years. 
 He has the privilege, if his salary is increased or his income 
 expanded in any way, to pay off his indebedness more rapidly. If 
 the buyer continues the fixed rate of payment, he can know exactly 
 when he may expect to have the home entirely paid for. 
 
 The houses are of several types. The smallest, a four-room 
 bungalow or house, has two bedrooms, living room, kitchen and 
 bathroom. The largest with eight rooms has five bedrooms, liv- 
 ing room, dining room, kitchen and bathroom. The houses are 
 of various construction. Some are all-frame, some with one- 
 story stucco on tile, some all-stucco on tile, some with one story of 
 
Housing Plans for Cities 2^ 
 
 brick veneer, second story of shingles and some with solid brick 
 walls. 
 
 ^ The aim of the builders and architect has been homes of en- 
 during construction, attractive in appearance and giving the maxi- 
 mum of comfort and convenience. The homes are in beautiful 
 surroundings and were designed to harmonize with the settings. 
 The first building plan of the General Motors Corporation was for 
 1,000 homes in Flint and 500 in Pontiac. 
 
 The total investment by the company in these homes represented 
 a large amount, but the company regarded it as well spent if it 
 gave a reasonable assurance that the labor turnover would be cut 
 down materially for at least a five-year period. Other dividends 
 would come in the greatly increased efficiency of labor and a check 
 to radical tendencies. 
 
Housing Plans for Cities 
 
 CHAPTER IV. 
 
 Cities Make Elbow Room 
 
 Akron, O., finding that its growing industries were in danger 
 of being cramped and restricted in their development launched early 
 in 1919 one of the most ambitious and far-sighted housing plans 
 ever undertaken in this country. 
 
 The campaign for increased housing followed a careful survey 
 of the needs of the industries, the existing housing situation and 
 the demand for new houses. Akron was fortunate in having in its 
 community two of the best planned and most successfully worked out 
 housing developments in the Goodyear and Firestone projects. First 
 hand evidence of the value of better housing for employes was 
 obtainable. The proposed housing plan was j>art of a city plan 
 undertaken by Akron. 
 
 The backers of the housing plan took the large view that the 
 investment in housing should be regarded by all the manufacturers 
 and the community at large as part of the total investment for car- 
 rying on business. In the case of Akron it was estimated that the 
 total capitalization of manufacturing amounted to $150,000,000. Go- 
 ing on that basis it was figured that the total cost of housing for 
 all wage earners would probably not amount to more than $10,- 
 000,000. Of course much of that had already been cared for by the 
 existing housing facilities. However, there remained the immediate 
 additional housing needs which had to be cared for and also adequate 
 provision for the needs of the rapidly growing industries. 
 
 The large industries decided they could not sit still. They saw 
 what bad and inadequate housing was costing them in restricted 
 growth and costly labor turnovers. It was determined to convert 
 the great forces operating through regular business channels to 
 the production of good housing and to do it by getting the co- 
 operation of the large industrial units which would profit most by 
 the new condition. 
 
 To attain the desired result the Akron Home Owners Invest- 
 ment Company, with a capitalization of $.S,000,000, was organized 
 in May, 1919. It planned to lend money on first and second 
 
Housing Plans for Cities ^5 
 
 mortgages to lot owners desiring to erect their own homes and also 
 to erect houses of the semi-detached or terraced type for renting. 
 As was to be expected, most of the capital was subscribed by the 
 large industries. 
 
 The directors of the housing company decided that it must 
 be able to meet the needs of the working men who receive from 
 $20 to $40 a week if it were to be of wide benefit. They estimated 
 that a $20 a week man could afford to pay $20 a month rent, the 
 total investment in the house and lot not to exceed $2,500. That 
 would allow $500 for the lot and $2,000 for the house. If regular 
 payments were contemplated towards the purchase of the home, a 
 higher average wage would be necessary. 
 
 On that basis it was estimated the investment would yield 10 
 percent gross or from 5 to 6 percent net. While this was not 
 a big return on the investment the stockholders in the corporation 
 counted on the building up of a more efficient and contented body 
 of workers and the development of a better community to yield 
 the greatest dividends. 
 
 The loans were made on the following basis : 
 
 Maximum loan $8,000. 
 
 Minimum initial payment of 10 percent of the value of the 
 lot plus the cost of the construction of the building. 
 
 Monthly payments at the rate of 1 percent a month to care 
 for the interest and the retiring of the principal, requiring about 
 ten and one-half years to pay off the entire loan. 
 
 The first mortgage is for 50 percent of the appraised value 
 of the lot, plus the cost of construction. The interest is 6 percent. 
 
 The second mortgage is for the balance. Interest on second 
 mortgage is 7 percent. 
 
 In event of sale or transfer, second mortgage required paid. 
 
 The loan which is granted is based to a certain extent on the 
 amount of the borrower's income. No monthly payment is allowed 
 to exceed one-third of the applicant's income. 
 
 The company has two methods of operation. It finances in- 
 dividuals who desire to build homes. It also finances contractors 
 who desire to build several houses. It has an agreement with them 
 in regard to the sale price and the amount of profit. 
 
 In the first eight months of operation, the Akron Home Own- 
 ers' Investment Company financed 427 homes. About 127 houses 
 were built on the group construction plan. 
 
26 Housing Plans for Cities 
 
 The plan followed in Akron is the basis for similar under- 
 takings in other communities. The home owner has only one or- 
 ganization to which he makes payments. He is spared the extra 
 burden of the cost of discounting his second mortgage as the 
 corporation has sufficient capital to finance the loan without dis- 
 posing of the second mortgage at a discount. 
 
 The housing corporation operates on a strictly business basis. 
 :It does not offer philanthropy or charity. On the face of their 
 investment the stockholders receive a fair rate of interest. It is 
 an advantageous proposition for the stockholders, the home owners 
 and the community. 
 
 Detroit's Great Need 
 
 Detroit is another city suffering from the ills of a phenomenal 
 growth in industries and population and a shortage in homes. Even 
 before the war the needs of its rapidly growing industries were out- 
 stripping its housing facilities. The expansion of its industries was 
 already astonishing. During the war these industries were speeded 
 up as never before. This caused an even greater concentration of 
 population. No added housing facilities could be provided, for the 
 Government had put a ban on the building of residences. Temp- 
 orarily the existing housing facilities had to suffice. 
 
 Then, suddenly, the war stopped and the great industrial ma- 
 chine geared to war-time necessity swung with hardly a lessening 
 of speed into the production of peace-time necessities. The de- 
 mands of the country which had been held back for two years put 
 a' heavy "strain on the industries. 
 
 If the same speed was to be maintained with the intense motive 
 of patriotism now lacking, a high productivity of labor would have 
 to be maintained. The first essential for this condition was an 
 efficient, contented body of workers with a minimum of labor 
 turnover. This could not be attained unless adequate, attractive 
 homes were, available at reasonable cost. Any great body of in- 
 dustrial workers with little or no property ties are affected to a 
 more or less extent by radical cross currents. That means costly 
 labor turnoyers. Home owning is the best antidote to radicalism. 
 
 Detroit approached the problem from the right direction. The 
 leaders of its industries realized they could not wait for the problem 
 to be solved by individual effort but should co-operate the forces of 
 
Housing Plans for Cities 2y 
 
 the city's industrial greatness for remedying the situation. Finances 
 were needed to provide more homes so capital was made available 
 for home owners whose thrift already indicated their industry and 
 stability. 
 
 The House Fiancing Corporation with a capital of $3,000,000 
 was formed. Subscriptions to this stock were obtained mostly from 
 the larger industries. The industries and the business men sub- 
 scribed on the following basis of employees: 
 
 The first 500 or any part at $25 per employe 
 
 From 501 to 1,000 at 20 per employe 
 
 From 1,001 to 5,000 at 15 per employe 
 
 From 5,001 to 20,000 at 12.50 per employe 
 
 Over 20,000 at 10 per employe 
 
 The Housing Corporation considers loans to applicants within 
 the Greater Detroit metropolitan area. The Corporation does not 
 finance the completion of houses already under course of con- 
 struction, nor will it grant loans unless it controls or supervises the 
 building operation. Loans are confined to an amount not to exceed 
 $6,000 for a single residence. All interest charges are at the rate 
 of 6 percent. The corporation operates under these plans : 
 
 The Banking Plan, 
 
 The Operation Plan, 
 
 The Contractors' Financing Plan. 
 
 The Banking Plan is intended to take care of those applicants 
 who already own a lot or who desire to buy a lot in some particular 
 location. The applicant is permitted to submit plans of his own 
 and if it is shown the desired house may be built for the amount 
 of money the company is authorized to lend, the loin is granted. 
 If it is apparent the house cannot be built for the prescribed amount, 
 the company presents one of its own plans to the applicant. It 
 knows the cost of construction following any one of its plans. 
 
 The Corporation lends up to 80 percent of the cost of the lot 
 and the house. The applicant is required to make either a 20 per- 
 cent initial payment or have an equity in a lot equal to 20 percent 
 of the total cost of the investment. 
 
 A loan is made by the Corporation only after it has determined 
 that payments will not be too great a burden for him. The amount 
 of the loan being agreed upon, the applicant then deeds his lot to 
 the corporation. The loan is made and a contract of sale or a land 
 contract is made between the applicant and the corporation, for 
 
^8 Housing Plans for Cities 
 
 an amount covering both the value of the lot and the building to be 
 placed thereon, applicant being credited with the appraised value of 
 his lot and any additional cash he may have paid. 
 
 The company is able to sell identical houses cheaper than a 
 contractor because the latter must add numerous charges to take 
 care of the heavy second mortgage discount, profit on land contract, 
 profit on building operations and to permit easy liquefaction of 
 his assets in the property. The saving has amounted to as high as 
 $1,200 to $1,500 on a $6,000 operation, the company has found. 
 
 There are certain legitimate costs of operation that must be 
 charged to the applicant under the corporation's plan. (Thesle 
 items are based on the actual costs of services. The client pays 
 for these expenses at the rate of $67.50 per thousand dollars on 
 the cost of the completed house. This sum must be paid within 
 the first year by monthly payments or at one time. If paid in 
 advance a 5 percent discount is allowed. 
 
 The Operation Plan. 
 
 To promote more rapid building the corporation buys lots or 
 large blocks of land near industrial plants and street car lines. 
 On such lots or tracts the corporation erects houses. The cost is 
 reduced by quantity production and also because minimum prices 
 are obtained on all materials, as the credit of the corporation is 
 behind all transactions. 
 
 The houses are practicable in every sense. They are designed 
 for comfort, attractiveness and for the needs of the average family. 
 The average price, including lot, is $3,500 to $4,500. Under the 
 Operation Plan it has been found possible to sell houses on slightly 
 lower monthly payments. 
 
 Contractors' Financing Plan. 
 
 Financial assistance is also given contractors by what is known 
 as the Contractors' Financing Plan. The corporation directors 
 realized that the Savings Banks and Trust Companies could sup- 
 ply only partly the working capital needed by contractors if they 
 should attempt to meet the housing needs of the city by erecting 
 houses to be sold on monthly payments. The contractor of neces- 
 sity must keep his capital as a revolving fund so he can main- 
 tain operations. To do this he must market his mortgages and 
 land contracts as soon as his houses are sold. The cost of these 
 
Housing Plans for Cities 2g 
 
 operations hinders construction, when they are to be undertaken 
 on a scale sufficient to give reHef to a rapidly growing industrial 
 city. 
 
 The Contractors' Financing Plan made possible such opera- 
 tions. The Corporation makes loans to contractors on new opera- 
 tions subject to the following restrictions: 
 
 Buildings must comply with all municipal requirements and 
 be acceptable to the corporation. 
 
 Buildings must be subject to corporation's inspection and ex- 
 amination. 
 
 No loan will be made on a single house and lot where sale 
 price is in excess of $6,000. 
 
 The basis for all loans shall be made from company's ap- 
 praisals as to value of house and lot, which shall be considered 
 in connection with the cost figures of each as produced by the 
 contractor and to which shall be added a profit of approximately 
 15 percent, this total constituting the sale price of the property. 
 
 The Corporation lends on contractors' collateral notes for 
 three years : 
 
 65% on the sale price of the property when 10% to 15% down 
 payments are made. 
 
 70% on the sale price of the proyerty when 15% to 20% down 
 payments are made. 
 
 75% on the sale price of the property when 20% to 25% down 
 payments are made. 
 
 Interest at the rate of 6% per annum, payable semi-annually. 
 
 Deed and Land Contract covering the sale of the property to 
 be assigned to and deposited with company as collateral for loan. 
 
 Monthly payments not less than 1 per cent of the sale price, 
 less the down payment, to be made to the Corporation, which will 
 be applied each month as credit against the contractor's notes. 
 
 At the time of the closing of the transaction the contractor 
 will pay all legal department charges for papers, examinations, a 
 mortgage tax of one-half of 1 percent, fire insurance, and a 
 service and carrying charge of a small percentage of the amount 
 lent on each individual property. 
 
 When the note obligation is discharged by being paid in full, 
 with accrued interest, either at or before maturity, the land con- 
 tract and deed held as collateral will be returned to the signer of 
 the note. 
 
JO Housing Plans for Cities 
 
 This plan permits the contractor to proceed with their oper- 
 ations as they have formerly. They buy lots of their own selection, 
 they build the type of house with which they are the most familiar 
 and dispose of the houses and lots just as they would under the 
 usual conditions. It is necessary for the contractor to obtain the 
 approval of the corporation as to his site and building plans if he 
 is to obtain full benefits of the aid offered him. He is permitted 
 to make only a reasonable profit. 
 
 Many building contractors in Detroit took advantage of this 
 plan and availed themselves of the capital ofiFered to carry on f urthei 
 operations. The directors of the House Financing Corporation 
 feel that the results of their efforts came up to their expectations 
 They have made possible much more housing and by efficiency of 
 methods have made homes cost the buyers less. 
 
 Will Keep St. Louisans Home Owners 
 
 On the theory that a city can be no larger than its homes, St. 
 Louis grappled with its house shortage problem. A Chamber of 
 Commerce Committee made a survey of the city and found that 
 there were practically no "For Rent" signs. Renters were finding 
 it more and more difficult to get homes. 
 
 The committee found that St. Louis was not alone in this 
 situation but that its problems were the same as those which faced 
 Kansas City, Detroit, Chicago, Philadelphia and practically every 
 other large industrial center. It found that the addition of new 
 industries and the expansion of old ones, highly necessary because 
 of increasing needs, was dependent for the most part on supplying 
 additional workmen with adequate and attractive homes. 
 
 St. Louis long had boasted of its excellent housing conditions. 
 It was estimated that 37 percent of St. Louisans were home own- 
 ers. Leading business men believed that St. Louis was at the 
 start of the greatest development of its history, if it were not checked 
 by its inability to provide adequa:te housing for its workers. 
 
 On the basis of the investigations which they had carried on, 
 the Chamber of Commerce and the Commercial Club undertook a 
 two million dollar Housing Corporation, as a means for getting 
 partial relief and to stimulate building. A total of $1 034 000 al- 
 ready has been subscribed to the capital funds and the campaign will 
 be pushed to obtain the full amount. 
 
Housing Plans for Cities 3t 
 
 The purchase of sites for the proposed homes has already 
 begun. Several thousand feet have been purchased and options 
 on several thousand feet more have also been obtained. The sites 
 selected are scattered so as to meet the needs of the community. By 
 standardizing the structural elements and by purchasing in whole- 
 sale lots, the Housing Corporation expects to reduce the cost of 
 these houses to the minimum. A small part of the purchased prop- 
 erty will be utilized for flats, but the remainder will be devoted to 
 one-family houses. 
 
 The houses are being designed under the supervision of a com- 
 mittee of architects and builders. Most of the houses will be of 
 four, five or six rooms. The cost of the buildings will run from 
 $4,000 to $6,500. The homes will have all modern conveniences, in- 
 cluding modern bathrooms, with hot and cold water connections, 
 furnace and basement with granitoid floors. 
 
 The building program of the Housing Corporation calls for 
 two hundred homes this year. The starting of one house a day 
 from April 1 to November 1 is scheduled. Contracts are being 
 made so as to take advantage of every possible economy in con- 
 struction. They are let in large quantities and paid for with cash 
 so as to insure the lowest possible price to the consumer. 
 
 The investment in the Housing Corporation is expected to yield 
 not more than 6 percent. The requirements of purchase are 
 that the purchaser make a payment of at least 10 percent of the 
 purchase price at the time the deed to the property is turned over 
 to him and then make monthly payments on the balance of the 
 principal which will completely repay the amount of the investment 
 in 10, 12 or IS years. All deferred payments carry an interest 
 charge of 6 percent payable monthly. The purchaser had the 
 privilege of paying a greater amount any month. 
 
 Great care is being given to the designing of attractive homes 
 adapted to the needs of the average family. Sufficient space is left 
 between houses to insure plenty of fresh air and sunshine. There 
 are ample yards for gardens and places for children to play. The 
 aim of the Housing Corporation is to build real homes that will 
 make for comfort and contentment. Their durability is increased 
 by the best of a construction. 
 
 The Housing Corporation was formed not as a charitable 
 institution but to perform a civic purpose and it is on this basis that 
 
Housing Plans for Cities 
 
 it operates. The founders are guided by no small purposes but arc 
 building for a greater industrial community. 
 
 Dallas Had Early Housing Plan 
 
 Dallas was one of the first cities in the country to undertake 
 a comprehensive house financing plan. Dallas was confronted with 
 the problem which faces most communities. War restrictions on 
 building had caused house construction to drop behind even norrnal 
 needs. Added to that was the stimulus given Dallas by the in- 
 creasing development of the oil industry of the Southwest. 
 
 The housing facilities were so far short of industrial needs 
 that the business men of the city decided the only way to gain relief 
 was by organized and co-operative effort. The Dallas Housing 
 Company was formed in the spring of 1919. The stock in the 
 company was subscribed by two hundred of the leading business 
 men of the city. Shares were $200 each and might be paid in ten 
 monthly installments. 
 
 The first house was started April 28, 1919, and its new owner 
 occupied it July 1. Most of the houses sell from $3,900 to $4,700. 
 The company builds a grea.): variety of sizes and styles of houses 
 but most of its operations are confined to five and six-room houses, 
 as the directors of the company felt that they would suit the average 
 family's needs and financial resources best. The houses were erected 
 on lots convenient to car lines. 
 
 The proposal that a housing company be formed caused much 
 speculation as to the effect such a large scale operation would have 
 on the plans of individuals and private contractors. Contrary to 
 the belief of many, it served to stimulate the erection of homes by 
 contractors and their subsequent purchase. It was the start of a 
 real building boom. 
 
 The Housing Company has no definite rules for the purchase 
 of a home. A small initial payment is required. The homes are 
 sold on monthly payments which pay the interest and gradually re- 
 tire the principal. The personal element enters largely into determ- 
 ing the amount of the first" payment and other terms. 
 
 Several large Dallas employers are assisting their workers in 
 various ways to take advantage of the offer of the Housing Com- 
 pany. Many of the homes have been sold to newcomers showing 
 the necessity of this organized effort if Dallas was to care for a 
 
Housing Plans for Cities 
 
 growth in population that was attracted by industrial opportunities. 
 The Dallas plan has attracted much attention from other com- 
 munities because Dallas was one of the first to make an organized 
 effort to relieve the housing shortage. It has been of two-fold 
 benefit to the city. It has given Dallas elbow room to grow and 
 industrial leaders have felt the effect in stabilizing labor conditions. 
 That was the aim of the promoters of the plan. It is operated on 
 sound business principles and yields a fair return on the investment. 
 The business men of Dallas had a vision and they feel that the re- 
 sults justify the efforts. 
 
 Small and Large Cities Are Short 
 on Homes 
 
 Many other cities have undertaken or are planning to start on 
 housing plans. Most of them are following the lines of the plans 
 already set forth. The basis of all of them is a means to bridge 
 the gap between the first mortgage and the comparatively small 
 initial payment that the average wage earner can pay. The larger 
 cities have' larger problems but in many cases the financing of a 
 housing plan has been easier for them than in the case of smaller 
 communities. 
 
 Charlotte, Mich., met its difficulty in furnishing adequate hous- 
 ing for its people with the Home Building Company. It was 
 capitalized for $100,000. Stock subscriptions called for a 10 per- 
 cent down payment and 10 percent monthly payments. Most of the 
 subscriptions were received one night at a mass meeting called for 
 that purpose. The stock was issued in certificates of $100 or 
 multiples thereof. The stock subscriptions ranged from $100 to 
 $2,500 with the average around $300. 
 
 No promises of big returns were made to the stockholders as 
 they were told their investment could not be expected to yield more 
 than 6 percent, although it may go a little higher. It is difficult 
 to tell just what the investment will earn, as the plan has been in 
 operation only a short time. 
 
 The selling plan is to add a small profit to the actual cost of 
 the houses which, produced in quantities and on standardized plans, 
 can be sold for less than it would cost an individual to produce one. 
 A minimum initial payment of 10 percent is required. The monthly 
 payments amount to 1 percent. The loan draws 7 percent in- 
 
j^ Housing Plans for Cities 
 
 terest. On that basis the purchaser gets his house paid for in 12 
 years and nine months. Insurance for three years is included in 
 the original price of the house. 
 
 The local banks agreed to lend the company up to 66 2/3 per- 
 cent on the price of a house if necessary to extend the operations 
 of the company. There is no first or second mortgage arrange- 
 ment, the houses in all cases being sold on a contract, unless the 
 purchaser desires to make a full cash payment. 
 
 The plan of operation of the company is simple. The seven 
 directors, consisting of leading merchants, manufacturers and the 
 representatives of each of the banks, meet each Tuesday afternoon 
 to consider such business as may have come up. They serve with- 
 out compensation. One of the directors who is a banker acts as 
 secretary-treasurer. The examination of property is handled through 
 a committee which reports its findings to the board. 
 
 There are no price limitations, but the directors will not en- 
 courage the purchase of a home by a person who apparently does 
 not have sufficient income to justify the obligation. 
 
 Carthage, Mo., a city of 13,000 inhabitants, found this year 
 that its housing facilities had not kept pace with the increase of 
 population brought to the city by new industries. It has undertaken 
 to form a home-building association to finance the construction of 
 100 four and five-room cottages. A down payment of at least 10 
 percent will be required. Monthly installments will take care of the 
 interest and pay off the principal. It is expected the investment will 
 yield the stockholders 5 or 6 percent. 
 
 Champaign, 111., Launches Housing Plan 
 
 A housing company with a capitalization of $100,000 is being 
 formed in Champaign, III. The company is backed by the business 
 men of CTiampaign. The plan contemplates the building of 200 
 homes for wage earners in Champaign to be sold on such easy 
 terms that the buyers will find it practically as cheap to become 
 home owners as to remain renters. 
 
 Behind the movement is the ever increasing demand for houses 
 and the inability of the city to meet the demand. The undertaking 
 ilw K,?r TP^.*^'^ ^? ^ competitor in the commercial real estati 
 trneelsff'chamS;^^' ^""^ '^^^'"^""^"^ *° '''' '^^ -''' 
 
Housing Plans for Cities 35 
 
 The purpose of the organization is to encourage wage earners 
 of the city to own homes. By adopting standarized plans of houses 
 with a pleasing variety of exterior designs a saving of 15 to 20 per- 
 cent on building costs can be obtained, building expierts estimate. 
 
 The plan of organization is to obtain subscriptions for enough 
 stock to make $100,000. One-tenth of the amount subscribed is to 
 be issued when the charter is obtained. One-half of this stock must 
 be paid in cash. Later as additional funds are needed the board 
 of directors will call for a pro rata portion of the unissued stock. 
 No person can have issued to him less than one share — $50 — at 
 any time. 
 
 The management of the company will be in the hands of nine 
 directors chosen by the stockholders. The investment is expected 
 to yield 6 percent. The company plans to build houses and to lend 
 money to individuals who desire to build their own homes. 
 
 Decatur, 111., May Expand Operations 
 
 The success of a Home Financing Company in Decatur, 111., 
 backed by the business men of the town, has encouraged the stock- 
 holders to plan even wider operations by increasing the capital 
 stock. When, the company was first formed it had at its disposal 
 $35,000 to lend to individuals desiring to build homes and to be 
 secured by a second mortgage on the property. The company plans 
 only to bridge the gap between the first mortgage and the minimum 
 down payment of 10 percent. Banks have agreed to make loans 
 of at least 50 percent of the total cost of the house and lot while 
 building and loan associations will make a 60 percent loan. 
 
 The greatest amount of indebtedness approved on any building 
 where a loan is made is $4,500. Monthly payments are fixed at ap- 
 proximately 1 percent of the total indebtedness. These install- 
 ments will take care of the interest and retire part of the principal. 
 
 Second mortgages are expected to be paid completely in six 
 or eight years. The second mortgage loan supplied by the company 
 is advanced by the Trustee and is secured by a mortgage on the 
 premises. When the first loan is made by a building and loan 
 association, payments of interest and installments of principal are 
 made to that association or if first loan is made by banks, collections 
 are made by them to cover second mortgage loan and accrued interest. 
 
jd Housing Plans for Cities 
 
 Plans are under way to encourage building on a larger scale. 
 Instead of leaving the initiative to the borrower in each case as at 
 present, requiring him to purchase his lot, adopt plans, engage a 
 contractor and negotiate loans, it is proposed to supervise all work 
 of cong:ruction, offering completed houses to prospective purchasers, 
 requiring of them only execution of necessary securities. The pres- 
 ent plans contemplate a pledge fund of approximately $250,000 to 
 permit such an expansion of operation. 
 
 Dunkirk, N. Y., to Hold Workers 
 With Homes 
 
 The Board of Commerce of Dunkirk, N. Y., made a survey cf 
 the housing situation of the city and found that practically every 
 habitable house in the city was occupied and that many workers 
 were forced to find homes in neighboring villages. The demand 
 for homes was increasing and becoming more difficult to meet be- 
 cause the expansion of industries was bringing more workers to 
 the city. It was evident that in the interests of the city, the em- 
 ployers and employes, greater housing facilities were imperatively 
 and immediately demanded. 
 
 Hence the Dunkirk Home Builders, Inc., was organized under 
 the laws of New York with a capitalization of $200,000 in shares 
 of $100 each. It was proposed that the solicitation of subscriptions 
 for stock be made at the rate of approximately two-thirds from the 
 manufacturers and one-third from the retail merchants and pro- 
 fessional men, the manufacturers to be asked to subscribe at the 
 rate of $25 per employe, based on the maximum pay roll of the last 
 two years. Subscribers of stock were to pay 25 percent on call 
 no calls thereafter to be more than 15 percent or oftener than 
 once a month. 
 
 As the primary object of the corporation is to build houses to 
 meet the requirements of employes of the various industries of 
 Dunkirk It is arranged that the stockholders be consulted regard- 
 ing the location of houses to be built, in proportion to the amount of 
 their stock subscription to the corporation 
 
 As many houses will be built as the capital of the company will 
 allow. Some of these will be contracted for before building; others 
 will be erected and sold as rapidly as possible. The majority of the 
 
Housing Plans for Cities 
 
 houses will cost from $3,000 to $4,000. More expensive houses 
 will be constructed under special agreements. 
 
 The purchasers are required to make an initial payment of 15 
 percent to the Dunkirk Home Builders, Inc. First mortgage loans 
 are to be negotiated with banks, trust companies, building and loan 
 associations or private individuals, for approximately 60 percent of 
 the value of the property. The building company takes a second 
 mortgage to cover the balance. The purchaser pays the interest 
 on the first mortgage semi-annually. He pays the taxes and in- 
 surance. He also pays monthly to the building company an amount 
 which will cover interest on second mortgage and which will re- 
 tire it in six years. 
 
 The directors of the Dunkirk Home Builders, Inc., estimated that 
 a total cost to the purchaser of $36.40 a month will provide a $4,- 
 000 home for the owner and retire the second mortgage in six 
 years. That is only slightly more than the owner would have had 
 to pay in rent. 
 
 Elmira, N. Y., Revives Old Housing Plan 
 
 A home financing plan was first undertaken by Elmira, N. Y., 
 in 1914. At that time Elmira was experiencing a house shortage 
 and to meet that situation the Elmira Chamber of Commerce Home 
 Building Corporation was organized with a capital stock of $200,- 
 000. About $100,000 of this was subscribed. A tract of land was 
 bought and fifty houses were build and sold on easy payments. 
 There was no absolute rule under this plan as to initial payments. 
 The amount was left largely to the company manager, who was gov- 
 erned by the circumstances of the individual case. The monthly pay- 
 ments were 1 percent of the balance, which took care of the in- 
 terest and retired a small part of the principal. The houses were 
 all sold on this basis. 
 
 Elmira is again facing a house shortage, only the present 
 condition is more acute. The Chamber of Commerce Home. Build- 
 ing Corporation is again offering assistance to home builders. The 
 Building and Loan Associations are giving fine co-operation by 
 lending up to 70 percent of the cost of the home. If a prospective 
 purchaser can make an initial payment of 10 percent of the total 
 cost or has that amount already paid towards the cost of the lot, 
 the Building Corporation will lend the rest. A second mortgage 
 
j8 Hoitsing Plans for Cities 
 
 company may be formed to assist purchasers who are unable to 
 get a first mortgage loan of 70 percent, as many financial institutions 
 are averse to lending such a large percent. 
 
 Grand Rapids, Mich., Raised $400,000 
 
 The Association of Commerce of Grand Rapids, Mich., took 
 the lead early in the summer of 1919 in a movement to alleviate 
 the housing situation in Grand Rapids. A committee was sent to 
 investigate the housing conditions in the towns of Northern Mich- 
 igan and Ohio and to report on the methods by which these cities 
 were meeting their problems. 
 
 As a result of the efforts of this committee, the Home Building 
 As'sociation of Grand Rapids was organized, with a capitalization 
 of $400,000. This company now has under construction 100 work- 
 ingmen's homes and is buying lots for the erection of the second 
 block of 100. 
 
 These houses will be sold on minimum down payments of 10 
 percent, 5 percent paid with the application and 5 percent when 
 the home is completed. A first mortgage of 60 percent is placed 
 on the property. This makes it necessary for the Home Building 
 Company to finance the proposition up to 30 percent. This 30 per- 
 cent is carried on a land contract. As soon as the home is paid for 
 up to the amount of the mortgage, it is transferred to the holder of 
 the mortgage, which in this case is one of the large Eastern life 
 insurance companies. 
 
 The capital stock of the Home Building Company was raised 
 by the manufacturers largely. Their subscriptions were based on a 
 per capita tax of $30 per employe. 
 
 Goshen, Ind., Makes First Payment High 
 
 Business interests in Goshen, Ind., have subscribed $125,000 as 
 capital stock m the Goshen Housing Corporation. The formation 
 of this company was undertaken to relieve the shortage in homes by 
 assisting home builders with loans. The Housing Corporation re- 
 quires a rather high initial payment of 20 percent of the total cost 
 of the home. This may be paid in cash or may represent an equity 
 in a lot. The Housing Corporation will then finance the remaining 
 80 percent by lending that amount to the purchaser at 7 percent 
 
Housing Plans for Cities 39 
 
 interest: The purchaser also agrees to pay 30 percent more in 
 monthly installments extended over three years. 
 
 When half of the purchase price has been paid the purchaser 
 receives a deed to the property and gives back a first mortgage 
 payable in five years and bearing 7 percent interest. 
 
 While this is not as generous an arrangement for purchasing a 
 home as housing corporations in some other cities offer, it does 
 make possible home owning for many persons who otherwise would 
 be unable ever to acquire a home. However, it must be kept in 
 mind that the extension of this credit is not a matter of charity but 
 it is based on firm business principles. The terms of credit must 
 fit the needs and special conditions of the community. Each com- 
 munity contemplating the forming of a housing corporation has 
 this problem to solve for itself and one community cannot be judged 
 by another. 
 
 Hartford, Conn., Has $1,500,000 Fund 
 
 The Housing Committee of the Hartford, Conn., Chamber of 
 Commerce adopted in December, 1919, a plan for meeting the hous- 
 ing needs of Hartford for the next few years. Hartford industries 
 under the stimulus first of war activities and then the demands of 
 peace had far outstripped Hartford's housing facilities. This short- 
 age in homes threatened to hinder the industrial development of 
 the city. 
 
 The Housing Committee recommended the formation of a Hous- 
 ing Corporation with a capital of not less than $1,000,000 and not 
 more than $2,000,000. Following that report a housing corporation 
 with a capital of $1,500,000 was formed with $1,000,000 paid in. 
 Subscriptions to this fund were solicited from employers on the 
 basis of the number of their, employes. Preference will be given 
 employes of these concerns in the matter of receiving loans. 
 
 The Corporation will give assistance to these employes in select- 
 ing the lots and determining a fair price for the property. If a home 
 builder selects his own architect and contractor, building experts of 
 the company will examine all estimates and plans with a view to 
 determining if the estimates are reasonable or if some change in 
 plans might not work to a considerable saving. The maximum price 
 to be approved by the Corporation for a single house is $5,000 ; for 
 
40 Housing Plans for Cities 
 
 a two-family house $8,000; a three-family house $11,000; except 
 on the request of a subscriber who is willing to furnish the ad- 
 ditional capital. 
 
 The Corporation will employ a competent architect and builder 
 to assist in letting contract, if home builder desires, to supervise 
 construction and to protect the owner's interests. The Corporation 
 will advance required payments to contractor, taking as security a 
 temporary mortgage from owner of lot at 6 percent interest. The 
 Corporation will purchase building materials at wholesale and resell 
 to the contractor where substantial saving can be made by so doing. 
 
 The home builder will be aided by the Corporation in obtaining 
 first mortgage loans from banks or insurance companies and the 
 corporation will advance balance of cost of lot and building on 
 second mortgage at 6 percent interest at least 10 percent of the 
 total cost, that amount to be furnished by the borrower as an 
 initial payment. Each borrower will pay at least nine-tenths of 1 
 percent of the total cost to the corporation monthly, such amount to 
 be applied by the corporation to the payment of taxes, insurance, 
 interest on first mortgage, interest on second mortgage and re- 
 duction of second mortgage until second mortgage is paid in full. 
 
 On request of borrower the corporation will build a house on a 
 lot of the borrower's choosing. The terms of financing will be the 
 same as outlined in the foregoing plan. The corporation also plans 
 to buy lots and erect houses on them to be sold also on similar 
 terms. 
 
 These are most liberal terms as proposed by the corporation. 
 In no case are the interest charges high and the initial down pay- 
 ment is small. They provide means for any worker to own a home 
 if he will practice reasonable thrift. The employers and employes 
 are beneficiaries under such a plan. 
 
 Lockport, N. Y., Increased Housing Plan 
 
 The Board of Commerce of Lockport, N. Y., took the lead in 
 solving the housing situation in Lockport. It launched a movement 
 to form a housing company, stock subscriptions to be obtained mostly 
 from the large employers of labor on the basis of $50 per employe. 
 The result of this effort was the formation of the Lockport Homes 
 Company, Inc., with a capital of $70,000, in April, 1917. 
 
Housing Plans for Cities 41 
 
 With this money the -directors of the Homes Company built 88 
 five and six-room houses costing complete at that time $2,400 and 
 $2,700, respectively. These houses were placed on the market at 
 $2,650 and $2,950. The local savings banks granted loans of $1,100 
 a.nd $1,300 on these houses. The houses were sold on an initial 
 payment of $200 with a payment of $18 monthly on the five-room 
 and $20 monthly on the six-room house. 
 
 The purchaser received a deed from the Homes Company on 
 making the $200 payment and he gave back a second mortgage of 
 $1,350 on the five-room house and $1,450 on the six-room house. 
 Monthly installments were applied to payment of the interest and to 
 the retirement of the second mortgage, which would pay it off in 
 about eleven years. It is the belief of the company directors that 
 it would be more advisable to reduce this time to about nine years, 
 or possibly eight. 
 
 The first mortgage is a 5 percent loan and the second mort- 
 gage is a 6 percent loan. The company is holding the second 
 mortgage. None of the purchasers has default on his payments. 
 Care was exercised to see that the purchasers were reliable people. 
 
 The industrial and financial interests of Lockport were so en- 
 couraged by the success of the undertaking that the capital stock 
 of the company was increased to $600,000 in November, 1919, and 
 a campaign was launched to sell the stock to the public. A quota 
 of $250,000 was assigned to the manufacturers and $250,000 to the 
 merchants, professional men and property holders. The manu- 
 facturers subscribed $231,000 of their quota, while the merchants, 
 professional men and property owners exceeded theirs by subscrib- 
 ing $275,000. That put the campaign for $500,000 over the goal. 
 
 The directors' of the company contemplate the construction of 
 100 houses as soon as possible. Most of them will be of five or 
 six rooms. 
 
 Newark, N. J., Studies Plans of Cities 
 
 A Housing Corporation is in process of formation in Newark, 
 N. J., the Board of Trade being instrumental in bringing the busi- 
 ness men into a co-operative plan to provide adequate homes for the 
 working people of Newark. Like many other industrial centers, 
 Newark found that its growth and industries were in danger of be- 
 
4-2 Housing Plans for Cities 
 
 ing restricted unless homes were available for the hundreds of per- 
 sons who desired them. 
 
 The plans worked out by Detroit and other cities are being 
 studied to determine the plan of operation best suited for the needs 
 of Newark. 
 
 Portland, Ore., Plans Halted 
 
 Large plans for home construction for Portland, Ore., which 
 were launched in 1918, were halted when the armistice was signed 
 and have not been revived. Portland is facing not only a large 
 shortage in residences but also of business buildings. 
 
 The home development in Portland at present is being carried 
 on by private companies. They are building and selling houses on 
 the usual monthly payment plan. The minimum down payment 
 usually is 20 percent. A first mortgage is placed on the home for 
 50 percent ; a second mortgage takes care of the balance. 
 
 The building company ordinarily discounts the second mort- 
 gage 10 to 20 percent. Of course this amount must be added to 
 the cost of the house and makes an additional burden for the owners 
 to bear. 
 
 The Portland Chamber of Commerce reports there is a tre- 
 mendous demand for houses in the city which is showing evidence 
 of large growth. Portland is confronted by problems similar to 
 those faced by other cities which are not making an organized co- 
 operative effort to increase their housing facilities. 
 
 Seek Million Dollars for Poughkeepsie 
 
 An increase in population of Poughkeepsie produced by normal 
 growth and the location there of several new industries has caused 
 an acute housing situation. Conservative figures place the number 
 of houses needed at more than 1,000. 
 
 The board of directors of the Chamber of Commerce, realizing 
 the urgency of the situation, has definitely gone on record as ap- 
 proving the creation of a million dollar housing corporation. It is 
 proposed that the capital be solicited from the manufacturing and 
 business interests on the basis of $25 per eriiploye. 
 
 The plan suggested for the corporation is to make it largely a 
 loan company but should the prospective home owners of Pough- 
 
Housing Plans for Cities 43 
 
 keepsie fail to take advantage of the offer it is proposed that the 
 corporation shall build houses until all its funds are employed 
 profitably. Preference under this plan will be given by the directors 
 to those home owners who, desiring to build their own homes, seek 
 financial assistance from the company. 
 
 The funds of the company are to be loaned on mortgages bear- 
 ing 6 percent interest — a first mortgage of 60 percent and a second 
 mortgage of 30 percent. All payments on account of interest and 
 principal under this plan will be in equal monthly payments of not 
 less than .072 of the appraised value of the property. The owner 
 will also pay insurance, taxes and upkeep of the property. It is 
 expected these payments will amortize the second mortgage in 
 eleven years and nine months. 
 
 Houses also will be sold under a contract to convey (a deed 
 to be given the purchaser when 40 percent of the purchase price 
 shall have been paid) to those who cannot make an initial pay- 
 ment of 10 percent or more. This plan will not become opera- 
 tive except when surplus funds not employed under the first 
 plan are available for such purpose. Payments equal to 11 per- 
 cent per annum of the appraised value of the property will be 
 made in equal monthly installments. 
 
 A third plan proposes the renting of homes until they can be 
 disposed of under one of the foregoing plans. 
 
 Housing Company Builds in She- 
 boygan, Wis. 
 
 Manufacturing and other business interests in Sheboygan, 
 Wis., organized the Sheboygan Housing Company several 
 months ago to increase the housing facilities of the city. The 
 various business institutions were asked to subscribe to the capi- 
 tal stock on the basis of ten dollars per employe of the insti- 
 tution. 
 
 The first operation undertaken by the Housing Company 
 was the building of 25 houses. The cost of the houses, it was 
 estimated, would not exceed $4,500 each, although they are thor- 
 oughly modern in every detail. The company will construct and 
 pay for these houses and offer them for sale. 
 
 Home financing in Sheboygan has been made much easier 
 by the Building and Loan Association. It has a capital of six 
 
^^ Housing Plans for Cities 
 
 million dollars and has taken an active part for many years in the 
 development of the city. The Housing Company has arranged 
 with the Loan Association to lend up to 75 percent of the cost 
 of the homes it is building. This is a more liberal loan than can 
 be obtained on a first mortgage from most financial institutions. 
 
 The Housing Company is making no plans to bridge the gap 
 between the first mortgage and the total cost because the direc- 
 tors believe most purchasers will be able to finance this 25 per- 
 cent themselves. This should not be difficult if they can make 
 even a fair initial payment. 
 
 The Housing Company has not been organized for profit so 
 the question of interest on the investment has not been deter- 
 mined. The chief aim of the company is to stimulate hdme own- 
 ing in Sheboygan. That it is of service to the community is 
 shown by the fact that it had applicants for practically all the 
 homes even before the plans and specifications had been made 
 public. 
 
 Twin Towns Back Corporation 
 
 The Housing Corporation of the Tonawandas was formed 
 to increase the housing facilities of the twin cities, Tonawanda 
 and North Tonawanda, N. Y. These two cities found after a 
 survey they had outgrown their housing facilities. 
 
 The Housing Corporation was organized to build homes to 
 sell to workers on easy payments. A minimum down payment 
 of 10 percent of the total cost is required. A first mortgage takes 
 care of 60 percent and the Housing Corporation out of its own 
 fund's will furnish the remaining 30 percent secured by a second 
 mortgage on the property. 
 
 Monthly payments of approximately 1 percent of the total 
 take care of the interest and retire the second mortgage. The 
 houses will cost from $4,000 to $5,500. 
 
 It is expected that the Housing Corporation stock will earn 
 approximately 6 percent. 
 
 Worcester, Mass., Short Hundreds 
 of Homes 
 
 A survey carried on a year ago by the Chamber of Com- 
 merce of Worcester, Mass., showed that an actual shortage of 
 about 2,200 homes or apartments existed in that city. That fact 
 
lionising Plans for Cities 45 
 
 was presented to the manufacturers and they were shown it was 
 an impossibility to obtain further help for the enlargement of 
 their industries unless some relief was offered in the way of pro- 
 viding homes for families who desired to go there. 
 
 A meeting of the heads of financial institutions and indus- 
 trial plants was called. They worked out a plan whereby funds 
 could be provided for building homes that could be sold or 
 rented. The city of Worcester is noted for its three-apartment 
 houses. They are a type peculiar to New England and prove to 
 be good investment properties. 
 
 Out of the conference between the manufacturers and bank- 
 ers came, the Worcester Housing Corporation with a potential 
 capital of several million dollars. As an initial movement a guar- 
 antee fund of $250,000 was asked. This was oversubscribed. The 
 banks agreed to accept a 60 percent mortgage on the building. 
 The manufacturers were to furnish the balance of the money 
 needed for the second mortgage and the purchase of the land. 
 The minimum amount to be accepted in payment for these homes 
 was 10 percent. 
 
 The first unit of 23 houses made 69 apartments. These were 
 offered for sale and there were 156 applicants for them at prices 
 ranging from $13,500 to $16,000 each. The average amounts 
 which the applicants could pay was $1,711. 
 
 Since the first unit was built the Corporation has halted its 
 activities because it felt it was unable to provide such buildings 
 at a reasonably small cost. However, it plans to erect single 
 homes which may be sold to working men, as there is still a 
 large need for such homes. 
 
 Portsmouth, O., Starts Fund 
 
 The Portsmouth, O., Chamber of Commerce recently pro- 
 posed a Housing Corporation to be formed under the laws of the 
 State of Ohio with a capitalization of $300,000. Of this amount 
 $100,000 is to be common stock, $100 per share, par value, and 
 the entire issue is to be subscribed by the manufacturers of the 
 city, $200,000 is to be preferred stock, bearing 6 percent in- 
 terest, payable semi-annually, and is to be subscribed by the 
 business interests of Portsmouth; namely, all of her public- 
 
/I.6 Housing Plans for Cities 
 
 spirited citizens. $100,000 has already been subscribed and 
 a campaign to sell the preferred stock will be put on in the near 
 future. It is planned to sell the houses which are constructed, 
 the sales price to be cost plus 1-0 percent. It is thought that 
 this can be done, and still sell homes to the workingmen 30 per- 
 cent cheaper than the individual builder. It is stated that from 
 surveys made in other cities, an initial payment of 10 percent to 
 20 percent seems to be the amount that meets the requirements, 
 and that as this coincides with surveys made in their own city, 
 to pay a minimum of 10 percent initial payment should be made 
 the rule. Concerning disposition of mortgages on houses sold, it 
 is stated that the Metropolitan Life Insurance Company of New 
 York stands ready and willing to take up all first mortgages, if 
 not issued for over SO percent of the valuation of the property, 
 including house and lot, on a 6 percent basis. The Housing 
 Corporation will make like disposition of second mortgages on a 
 7 per cent basis. 
 
 Other Cities Get Busy 
 
 The Louisville, Ky., Board of Trade has worked out in de- 
 tail a plan for organizing and financing an agency to relieve the 
 shortage of housing in Louisville. The plan is based upon that of 
 the St. Louis Home and Housing Association. 
 
 Through the initiative of the Adrian, Mich., Chamber of 
 Commerce the Adrian Homes Company was organized to con- 
 struct houses for sale. 
 
 In Hamilton, O., fifty houses constructed in 1919 by the 
 Hamilton Home Building Company are selling quite rapidly. 
 
 Through the initiative of the Janesville, Wis., Chamber of 
 Commerce, a Housing Corporation with capital stock authorized, 
 $300,000 divided into three thousand shares of $100 each, was 
 organized in 1919. This corporation was organized to build 
 houses for sale, the sales plan to include a 10 per cent payment. 
 
 In the fall of 1919, the General Motors Corporation ac- 
 quired all the stock of the Janesville Housing Corporation, re- 
 turning to the stockholders the amount of their investment, with 
 interest to date. This action was taken on account of the neces- 
 sity of at once constructing sufficient houses to take care of the 
 rapid growth of the Samson Tractor Company. Plans for the 
 erection of five hundred new houses have been made. 
 
Housing Plans for Cities 47 
 
 Chicago to Raise 15 Million 
 
 The Chicago Association of Commerce, in co-operation with 
 the Real Estate Boards, is forming a Housing Corporation. Ac- 
 cording to the plan, nominal capital stock will be issued to in- 
 dividuals who will be the underwriters of collateral trust bonds 
 to the extent of 15 million dollars. The bonds are to be secured 
 by loans to be deposited with the Chicago Title and Trust Com- 
 pany as trustee. The interest rate will be 6 percent. The bor- 
 rower shall pay the loan at the rate of 10 percent per thousand 
 per month, including interest. The term of the loan shall not 
 exceed five years, but at the expiration of the five-year term the 
 company will agree to extend the term of any loan in good stand- 
 ing for three or five years. 
 
 Richmond Has $1,000,000 Fund 
 
 At a meeting held under the auspices of the local Chamber of 
 Commerce, Richmond, Va., formed what is called the Richmond 
 Sanitary Housing Corporation, with an authorized capital of 
 $1,000,000. The organization is independent of the Chamber of 
 Commerce as under the rules governing that body, no stock 
 subscriptions can be solicited. 
 
 Subscribe $100,000 in LaPorte, 
 Indiana 
 
 The La Porte, Ind„ Chamber of Commerce has organized a 
 concern known as the La Porte Housing Corporation, and has 
 issued 1,000 shares of non-assessable capital stock at $100 per 
 share. It will purchase mortgages, sell real estate, build homes, 
 furnish an inspector and perform clerical work for purchasers at 
 cost. While construction is to be standardized, no contiguous 
 houses are to be built alike. 
 
 It is stipulated that all homes undertaken must be com- 
 pleted by 1921 and that they shall be sold at prices to yield stock- 
 holders not less than 4 percent nor more than 6 percent interest 
 on their investment. A 20 percent cash payment is required and 
 
4-8 Housing Plans for Cities 
 
 the balance in 100 monthly payments which will pay off the 
 principal, interest at 6 percent, as shown by the following: 
 Purchase Initial Payment Monthly 
 
 Price. 20 Percent Payment 
 
 $2,000 $400 $20.37 
 
 2,500 500 . 25.59 
 
 3,000 60O 30.55 
 
 3,500 700 35.65 
 
 4,000 800 40.74 
 
 Bankers of the city agree to lend money to the corporation 
 up to one-half of total cost of house and lot and purchasers will 
 make their payments to the bank advancing the money. 
 
 Aid Home Owning in Niles, Ohio 
 
 The Board of Directors of the Niles, O., Chamber of Com- 
 merce has approved the recommendation of the Chamber's hous- 
 ing committee that a housing corporation be formd in Niles. Plans 
 call for an authorized capital of $100,000. The housing cor- 
 poration will build houses to sell, and also undertake the building 
 of homes at a stated price for present lot owners or future lot 
 owners. If an applicant for a home does not own a lot, a 10 per- 
 cent cash deposit of the cost of the house will be required. 
 Dividends on capital stock will be limited to 6 percent. The im- 
 mediate construction of at least 100 houses is contemplated. 
 
 Hoopeston, 111., Speeds Up Building 
 
 After making a survey to determine the need of new houses, 
 the type of house desired, and the number of persons desiring 
 different types of houses, the Hoopeston, 111., Chamber of Com- 
 merce organized a housing corporation with a capital of $100,000, 
 of which $50,000 was issued at once and later subscribed. Realiz- 
 ing that it would take two or three months to complete the in- 
 corporation and as there was a pressing need for more houses, ten 
 business men guaranteed a contract for the first ten houses with 
 the understanding that the housing corporation would take over 
 these houses. A committee was appointed to purchase lots and 
 the building work started. The method of sale is 10 percent 
 
Housing Plans for Cities 49 
 
 down and 1 percent per month. Out of this 1 percent the hous- 
 ing corporation will pay the insurance, interest, taxes and will 
 apply the balance on the reduction of the principal. It will take 
 about eleven years for a purchaser to pay out on a house. Re- 
 turn to investors in the housing corporations will be S or 6 per- 
 cent. In the future the corporation will build houses only after 
 the purchaser has paid down 10 percent. The purchaser may 
 select his own house plan. When he makes the required payment, 
 the corporation will advertise for bids on the house and award 
 the contract to the lowest bidder. 
 
 Gloversville, N. Y., Plans for Growth 
 
 The report of the survey committee on the Gloversville, 
 N. Y., Chamber of Commerce has resulted in the formation of the 
 Gloversville Homes Corporation, capitalized at $100,000. Stock is 
 being subscribed at $100 a share. It is stated that proper hous- 
 ing should increase the population 5,000 in the next three 3-ears 
 
 Build Duplexes in Waltham, Mass. 
 
 A Housing Corporation, capitalized at $100000 in all com- 
 mon stock, was organized in Waltham, Mass., through initiative 
 of Chamber of Commerce, to build houses for sale. Initial build- 
 ing plans called for two-flat houses, having about five rooms in 
 each flat. The plans of the corporation are not to have large 
 building operations in any one section, but to confine efforts to 
 units of five or six houses. The corporation hopes to place on 
 each house a first mortgage with one of the local banks which 
 would be to some degree permanent. Upon sale of the house the 
 corporation will assume a second mortgage for the balance be- 
 tween the first mortgage and the amount which the purchaser 
 is able to pay. The purchaser is expected to make a deposit at 
 least large enough to protect the corporation from loss. It is not 
 expected that the corporation will be able to make any profit on 
 the sales of the houses. So far as possible houses will be sold at 
 the actual cost of erection, and by erecting in groups it is hoped 
 to bring the cost down below the figure possible for an}^ 
 individual. 
 
jO Housing Plans for Cities 
 
 Long Test in Bridgeport, Conn. 
 
 A successful community housing plan which has been tested 
 by time is that initiated by the Bridgeport, Conn., Chamber of 
 Commerce. As result of this organization's activities in 1916 
 there was organized the Bridgeport Housing Corporation, capi- 
 talized at $1,000„000 and with the purpose of building working- 
 men's dwellings. This company is operated without profit, all 
 dividends being limited to 6 percent. The stock was subscribed 
 to largely, if not entirely, by local manufacturers. 
 
 Build At Profit in Washington 
 
 One of the most successful limited dividend housing corpora- 
 tions in this country is the Washington Sanitary Improvement Co. 
 of Washington, D. C. This company has built about three hun- 
 dred houses, has succeeded in paying its dividends and in addi- 
 tion has accumulated a large surplus. The project has involved 
 the organization of two corporations ; dividends of the first cor- 
 poration which was organized being limited to 5 percent. 
 
 Grawfordsville, Ind., Adopts Plan 
 
 As a result of the activities of the Crawfordsville, Ind., Cham- 
 ber of Commerce, a Housing Company was organized with a 
 capital of $50,000. It is planned to have building activities begin 
 at earliest possible time. The selling prices of houses erected 
 will be somewhere between two and three thousand dollars. 
 
 A Stimulus to Wilkesbarre, Pa. 
 
 The Greater Wilkes-Barre Chamber of Commerce of Wilkes- 
 Barre, Pa., recently brought about the formation of a Community 
 Housing Corporation capitalized at $250,000. Half of the stock 
 was sold to merchants and manufacturers of the community, while 
 $125,000 was taken by the banks as first mortgage! The fifty 
 homes, which are to be built along modern lines, will be upon a 
 seven-acre plot of land. The campaign has had the desired effect 
 of stimulating general home building, as the formation of the 
 Housing Corporation has already resulted in 500 additional homes 
 being started or planned by individuals and corporations. The 
 plan of the Housing Corporation is to sell the homes at cost as 
 soon as they are completed. 
 
Housing Flans for Cities 5/ 
 
 Halt Work in Seattle 
 
 During the war and as a part of its emergency housing prob- 
 lem, the Seattle, Wash., Chamber of Commerce organized a sec- 
 ond mortgage company designed to furnish the owner of a lot 
 with sufificient capital to complete the construction of a permanent 
 home. While this company was not called upon on account of 
 the signing of the armistice, it is held intact to enter the field 
 whenever the need arises. It was financed with comparative 
 ease. The capital subscribed was $200,000. Subscriptions were 
 limited to amounts of $5,000 and over, in order that there would 
 be no serious difficulty if the company lost a little money. 
 
 St. Paul Stretches Fund Five- Fold 
 
 The St. Paul Association of St. Paul, Minn., has organized 
 an "Own Your Home Financing Corporation." Loans will be 
 made to wage earners desiring to build homes, and up to 80 per- 
 cent of the appraised value of the house and lot. The property 
 will be deeded to the company and a contract for sale issued, 
 payable in monthly payments of 1 percent of the value of the 
 property, which will make the loan mature in about eleven years. 
 The company proposes to issue debentures up to 60 percent of 
 the amount of the contracts in hand. These debentures will bear 
 6 percent interest and the maturities will be arranged to corre- 
 spond with the amounts maturing on the estimated receipts from 
 the contracts securing them. Borrowers may anticipate payment 
 of the loans if desired. On a basis of $250,000 paid in capital, 
 loans may be made up to $1,250,000 by issuing debentures of 
 $750,000, which would be 60 percent of the amount of the con- 
 tracts that can be made without further stock being paid in. 
 
 The Own Your Home Financing Corporation has made 
 arrangements with a local bank to handle the business for them. 
 The company will charge a commission of 5 percent on the gross 
 value of the property. One percent will be retained to cover 
 possible defaults in payment and 4 percent will be paid to the 
 bank, for which they agree to appraise the real estate, examine 
 title to the property, draw all legal papers, figure plans and esti- 
 mate value of the house to be built, employ practical builders to 
 inspect house constantly while construction is in progress, collect 
 monthly installments due on contracts, and agree to underwrite 
 
Housing Plans for Cities 
 
 up to $750,000 of 6 percent debentures ; also look after taxes and 
 insurance, etc. 
 
 A purchaser selects his own land, contractor and design, and 
 makes application to the corporation for a loan. A joint com- 
 mittee of the bank and corporation examines the specifications, 
 passes on architect and contractor, furnishes an inspector to 
 supervise the work and pays the bills. For this service the bank 
 charges 5 percent. Purchasers agree to a down payment of 20 
 percent and monthly payments of 1 percent of total cost until 
 loan is paid. This takes care of interest and principal. AH pa}- 
 ments are made to the bank and arrangements are made whereby 
 these may be anticipated and the loan paid off in part or in whole 
 on the first of any month. 
 
 Niagara Falls Forms Company 
 
 The Niagara Falls, N. Y., Chamber of Commerce has also de- 
 cided to organize a second mortgage company. This company 
 is called the Home Finance Corporation of Niagara Falls, N. Y., 
 and is organized "to give financial assistance to persons who wish 
 to erect houses and own their own homes." 
 
 The Corporation will have an authorized capital of $1,000,000. 
 $500,000 of which will be subscribed for immediately, subject to 
 call by the Board of Directors on reasonable notice. The Cor- 
 poration will be governed by a board of fifteen directors, to be 
 elected by the stockholders and serving without salary. Sub- 
 scribers to the extent of 10 percent of the stock will be entitled 
 to at least one director. The directors are authorized to employ 
 a salaried manager and a salaried accountant. A home builder 
 applying for the assistanc of the Corporation must have in cash, 
 land or its equivalent an amount not less than 10 percent of the 
 total cost of the building and land. The Corporation will then 
 assist him in placing with a savings bank, loan association or 
 other institution or individual, subject to approval by the board, 
 a first mortgage to an amount of at least 60 percent of the total 
 cost of the property. 
 
 The Corporation will assume a second mortgage to cover 
 the balance, which will in no case exceed 30 percent of the total 
 
Housing Plans for Cities 55 
 
 cost and in the case of a loan association may be as low as 15 
 percent. This second mortgage will be liquidated by installment 
 payments, either to retire the second mortgage or to reduce the 
 first mortgage to a point where it will absorb the second mort- 
 gage, thus releasing the funds of the Corporation as quickly for 
 reinvestment in the new building projects. Permanent invest- 
 ments will thus be avoided. Unless otherwise authorized by a 
 two-thirds vote of the directors, investments will be made only 
 on new houses, and the total cost of the property will be limited 
 to $6,000. In placing of investments preferences will be given to 
 application from stockholders and their employees. 
 
 The gross income of the Corporation is estimated to be 6 
 per cent of its invested capital, or $30,000 on a paid in capital of 
 $500,000. The expenses of the Corporation will be limited to 
 salaries of its manager, accountant, office rent and incidental 
 expenses, and are estimated not to exceed $10,000 per annum. 
 The net income of the Corporation, with its capital fully invested, 
 is estimated to be 4 percent. 
 
 Gives Labor A Voice 
 
 A company was recently incorporated in New London, Conn., 
 to encourage workmen to build their own homes. The company 
 is capitalized at $25,000 and is under the management of nine 
 directors, three of whom must be from the ranks of labor. 
 
 To all who can pay in cash 10 percent of the cost of the 
 house and lot, the banks will lend 60 percent on a first mortgage. 
 The difference between this and the cash payment will be ad- 
 vanced by the financing company, which will take as collateral 
 a land contract. The builder agrees to pay each month 1 per- 
 cent of the cost of the house, and is given a deed to the prop- 
 erty as soon as his payments cancel the amount of the land. 
 
 The bankers of New London have agreed to make to the 
 company up to 75 percent of the land contract offered as security. 
 Thus, the funds of the company tied up in any one property 
 need never exceed 10 percent of its value. 
 
54 Housing Plans for Cities 
 
 Harrisburg, Pa., Aids Builders 
 
 Through initiative of the Harrisburg, Pa., Chamber of Com- 
 mei;ce^a housing corporation capitalized at $50,000 will be formed 
 (more than $32,000 had been subscribed in January, 1920) with 
 provision for increasing this amount. Dividends on stock are lim- 
 ited to 6 percent. Money thus secured will be lent at fair rate to 
 homeseekers who have not enough funds to purchase a home with 
 the assistance of a building and loan company, trust company 
 or other agency. The loan designed to fill gap between amount 
 home-seekers have on hand, and amount they can borrow on 
 first mortgage. Such security as its board of dirctors deems 
 adquate will be accepted for money loaned by housing corpora- 
 tion. 
 
Housing Plans for Cities 55 
 
 CONCLUSION. 
 
 No attempt has been made in this booklet to enumerate all 
 the towns and cities of the country which have an acute hous- 
 ing problem. The same condition exists practically everywhere. 
 Cities which have experienced an increase in population or a 
 marked industrial development are feeling the pinch of the lack 
 of homes for their workers. 
 
 A few cities and industrial organizations are pioneering in 
 an attempt to obtain elbow room for growth. They are deter- 
 mined to retain the benefits that their industrial achievements 
 and advantages of location have given them^ They realize they 
 cannot maintain a normal expansion unless adequate and at- 
 tractive housing is provided their employes. 
 
 They have not attempted to dodge the situation by hoping 
 the problem would find its own solution but have met it squarely. 
 They are co-operating the great forces of finance and industry in 
 a determined effort to provide homes. 
 
 The Southern Pine Association has in this booklet presented 
 a brief outline of their plans and achievements because it be- 
 lieves the experience of any one community in successfully meet- 
 ing the acute housing problem will be of value to other cities 
 confronted with a similar situation. 
 
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Cornell University Library 
 HD 7293.S724 
 
 Housing plans for cities. 
 
 3 1924 016 066 056