Fiscal aspects of federal urban housing programs

309 Pages·23.257 MB·English

by  Case, Fred E

FISCAL ASPECTS OF FEDERAL URBAN HOUSING PROGRAMS
BY
FREDERICK EWING CASE
A D issertation Submitted in P artial Fulfillm ent of
the Requirements for the Degree of Doctor of
Commercial Science in the School of
Business of Indian® University
INDIANA UNIVERSITY
1951
ProQuest Number: 10296471
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ACCEPTANCE
Ihls D issertation has bean accepted in p artial fu l­
fillm ent of the requirements for the Degree of Doctor of
Commerei&l Science In the School of Business of Indiana
D niverslty.
Date
Dean T oohbolof Business
cKaTrman
Member
Member
II
PREFACE
Economic action by the Government in a democracy has
more chance of affecting the economy of the nation favorably
if the action is explained to and understood by the people.
The Federal Budget stands as the most significant statement
of wh&t the Government Intends to do and has done in a ll of
its activ ities including urban housing programs. This study
was undertaken for the purpose of evaluating the budgetary
aspects of federal urban housing programs and of reviewing
and c riticisin g Budget procedure®•
ill
ACMOWLBDGMMT
The w riter wishes to express his appreciation of the
assistance given him by Dr# John K* Langum, Professor of
Business Adm inistration, Indiana U niversity, and formerly
Vice President of the Federal Reserve Bank of Chicago, who
provided the original inspiration for th is research and who
assisted in the development of the Ideas; Mr* John Reeves,
Bureau of the Budget, who provided m aterials which further
explained portions of the Budget documents and which were not
generally available; former Congressman James Noland, Repre­
sentative from Indiana, who supplied many out-of-print mate­
ria ls which could not be found in the lib raries; Bean A. M.
Weimer, School of Business, Indiana U niversity, who supervised
and fac ilitated the completion of the study; Professor
Edward E. Edwards, Indiana U niversity, who provided helpful
comments.
F* E. C.
iv
table of contents
Chapter Page
I, THE PROBLEM . ........................... * * 1
Statement of the problem . * . * ................. 1
Basis of the S tu d y ...................* ......................... 4
The Hoi© of Budget Documents ................................. 5
The Measurement of Costs of Urban Housing
p ro g ram s...................................................♦ . . . . 6
The Significance of Federal urban Housing
Commitments.......................• . . . . ............... 12
Achievements Versus Benefits of Urban Housing
programs ................................ * . . • • • • » * 15
The Importance of the Budget Process for Fed­
eral Urban Housing program s............................... 17
Inadequacies of Budget D ocum ents * 20
Survey of Belated information . . . . . . . . 24
procedure Used in Making the Study........................ 26
Sources of Information ...................... 29
Delimitation® and Lim itations of the study * 30
Plan of the Study . « • • # • • « # • • • . . 31
II# BUDGETARY REPORTS OF FEDERAL URBAN HOUSING PRO­
GRAMS AS A PART OF BELIEF AMD RECOVERY . . . . 33
General Economic Conditions at the Beginning
of the period................................................................... 37
Economic Conditions of the Real Estate Market 38
The Federal Government Enters th© Housing
Market .................................... 39
Th© Place of Grants and Subsidies In Federal
Housing Programs ....................... 44
Objectives of th© P ro g ram s...................... . . • 47
C haracteristics of Housing Provided by Belief
Legislation . . . . . . . . . . 48
Review of Budget Reports on Housing Belief
A ctivities . . * . . . . , . . . . . . . 0 61
III. THE FEDERAL GOVERNMENT ASSISTS THE URBAN HOME
BUYER ................................... 63
Budget Reports on Housing Programs for Urban
Home Buyers 64
Legislative Provisions for Home Buyers . . . 66
v
vi
Pag©
Chapter
III# THE FEDERAL GOVERNMENT ASSISTS THE URBAN HOME
BUYER (Continued)
Fiscal Analysis of the Federal Home Loan
Banks • ♦ • • • • ♦ # # ♦ • » • • * • * • • 70
Federal Savings and Loan Associations . » . . 78
Federal savings and Loan Insurance Corpora**
tion * • * * « • • • * # • # • • • * • # * 74
Federal Financial support of the Home Owners*
Loan Corporation * # . • • • • # * . * « « 75
Federal Financial Support of the Federal
• National' Mortgage Association . « » » » • • 78
Government Credit commitments for the Federal
Housing A d m inistration ..................* » • . « 80
Special Purpose Housing Corporations • » . • 86
Critique of Budget Documents for th© Fiscal
Years 1938 through 1940 • * » * » » » • « # 90
IV. TIE FEDERAL GOVERNMENT SUPPLIES PUBLIC HOUSING ©8
Budget Reports on Public Housing Program® * . 92
Budget Commitments for Emergency Relief
public Housing • • • • # « # • • • • • . • 95
Fiscal C haracteristics of the Housing Act
Of 1957 98
Evaluation of Public Housingf 1857-1944 * . » 105
V. SUMMARY ANALYSIS OF GOVERNMENT HOUSING PROGRAMS
1958-1940 # ♦ • . ...................... . 107
Th© Contribution of Budget Documents • • • . 112
VI# .FEDERAL URBAN HOUSING PROGRAMS AS A PART OF THE
WAR EFFORT............................... . . # 115
Problems of Measuring the Fiscal Aspects of
War Housing P rogram s........................... » . » , 116
Conditions of the Housing Market which Con­
tributed to the Fiscal programs of Federal
War Housing programs 120
Fiscal C haracteristics of Defense and War
Housing Program® • . 0 # „ a , * 0 ♦ * * , 124
Termination of War Housing Programs and a
Summation of the Costs and Achievements of
th© Programs . * ...........................# # • • • # • 140
Lessons from War Housing A ctivities and an
Evaluation of th© Costs of These A ctivities 142
The Role of th© Budget Documents in Reporting
on War Housing 145
vli
Chapter Page
v ii♦ government programs for postwar, public housing,
SLUM CLEARANCE, AND CITY REDEVELOPMENT . . • . 14?
General Economic Conditions and the Real
■ Estate Market of the postwar Period . . . * 161
Controversy over the WET and the TEW Housing
B ills . . . . . . ........................................... 156
Public Housing and the Housing Act of 1949 • 160
Fiscal Analysis of Low-Rent Housing Programs 165
The Role of the Budget Documents . . . . . . 168
V III. THE POSTWAR PATTERN OF FEDERAL URBAN HOUSING
PROGRAMS FOR THE HOME BUYER . . . . 170
Servicemen1s Readjustment Act of 1944 • • • • 170
The Veteranst Emergency Housing Act of 1940 « 175
The Housing and Rent Act of 1947 . . . . . . 175
Housing Legislation for 1S48 • • • « . * * • 176
The Housing Act of 1949 and th© Home Buyer . 178
Fiscal Provisions of the Housing Act of 1850 180
Evaluation of the postwar Period ....................... 181
Summary of Commitments to Aid the Private
Housing Market 185
The Emerging Pattern . . • • • • • • • • • • 186
IX. HOUSING EXPENDITURES IN THE POSTWAR BUDGET
DOCUMENTS.......................... 195
Information Available in Postwar Budget
Documents 196
Total Budget Expenditures and Budget Expendi­
tures for Housing and. community F acilities 208
Trends In Postwar Housing programs . . . . . 211
An Evaluation of Postwar Budget Documents • . 215
X. FEDERAL URBAN HOLDING PROGRAMS AND THE ECONOMY
OF THE UNITED STATES . . . . . . 218
The Importance of Urban Housing in th©
Economy 219
Sis® and Trends of the House-building
Industry . . . . . . . . . . . 221
Government Influences on the Housing Industry 226
The Adequacy of th© Federal Urban Housing
Programs . . . . . . . . . . 231
v iii
Chapter Page
XI, SUMMARY' OF FINDINGS, CONCLUSIONS, AND IMPLICA­
TIONS OF THE STUDY............................ 237
The Costa and Achievements of Federal Urban
Housing Programs . . • • ..................................... 242
The Emerging Trend ................... » . . « • • • • 244
Is the Budget Honest?...................................................... 245
Recommendations for Improving Budget Reports 247
Reoommen&at1ono for Further Study. . . . . . 851
APPENDICES
A, SUPPORTING STATISTICAL TABLES ...................... . . . 254
B. CHARTS . . . . . . . . . . . . . 268
0, SIGNIFICANT HOUSING LEGISLATION . . . . . . . . 274
BIBLIOGRAPHY....................................................................... 288
LIST OF TABLES
Table Fag©
1* Budget Expenditures for Housing and Community
Development, Fiscal Years 1959-1952 * • » • • • » 8
2* C redit Commitments for Housing and community De­
velopment by Agencies, Annually 1952-1950 » » * » 10
5« Summary of Budget A uthorisations for Housing and
Community Development for th® Fiscal Years 1950,
1951, and 1952 . * . • * ..................................... • • * 19
4« Appropriations and A llocations for Housing from
B elief Funds * . * » * • « ................... « . » • * « 45
5. Reconstruction Finance Corporation, Securities
Owned by the United states Government « • . , * , 56
6# Reconstruction Finance Corporation, A llocations
and Loans to Other Governmental Agencies at the
D irection of congress .......................................... 57
7. RFC Obligations canceled at th® D irection of Con­
gress, Fiscal Years 1958-1949 60
8* Membership of the Federal Horn® Loan Bank System,
December 51, 1955-1950 . . . . . . . . . . . . . 68
9* Federal Horn© Loan Bank Stock owned by the United
States Government, Fiscal Years 1939-1950 * * • . 75
10* Home Owners * Loan corporation, Securities Owned
by the United States Government, Fiscal Years
1935-1950 ........................ * . * * . * . 77
11, Federal Rational Mortgage A ssociation, Securities
Owned by th® United states Government, Fiscal
Years 1958-1950 ............................... , 79
12, FIMA Home-Financing A ctivitys Annually, 1938-
1960 81
13* Mortgage Insurance W ritten by FHA Under T itles II,
VI, and V III, 1934-1960 . . » . « * * , 85
ix