FISCAL ASPECTS OF FEDERAL URBAN HOUSING PROGRAMS

375 Pages·020.148 MB·English

by  CASE, FREDERICK EWING

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Case, Frederick Ewing
FISCAL ASPECTS OF FEDERAL URBAN HOUSING PROGRAMS
Indiana University, Graduate School of Business D.C.S. 1951
University
Microfilms
International
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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 Indiana U niversity
INDIANA UNIVERSITY
1951
'"RT
ACCEPTANCE
This D issertation has been accepted in p a rtia l fu l­
fillm ent of the requirements for the Degree of Doctor of
Commercial Science in the School of Business of Indiana
U niversity.
Date W. / f j ' i
Dfearr, School of Business
Chairman
mber
Member
Member
i i
PREFACE
Economic action by the Government in a democracy has
more chance of affectin g the economy of the nation favorably
if the action is explained to and understood by the people.
The Federal Budget stands as the most sign ifican t statement
of what the Government intends to do and has done in a ll of
its a c tiv itie s 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 r iticizin g Budget procedures.
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ACKNOWLEDGMENT
The w riter ivishes 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 ra ries; Dean A. M.
Weimer, School of Business, Indiana U niversity, who supervised
and fa c ilita te d the completion of the study; and Professor
Edward E. Edwards, Indiana U niversity, who provided helpful
comments.
F. E. C.
iv
TABLE OP CONTENTS
Chapter Page
I . THE PROBLEM......................................................................................... 1
Statement of the P r o b le m .............................................. 1
Basis of the S t u d y .............................................................. 4
The Role of Budget D ocu m en ts..................................... 5
The Measurement of Costs of Urban Housing
Programs ................................................................................... 6
The Significance of Federal Urban Housing
Commitments.............................................................................. 12
Achievements Versus B enefits of Urban Housing
P ro g ra m s........................................ ....................................... 15
The Importance of the Budget process for Fed­
eral Urban Housing programs . . . . . . . . 17
Inadequacies of Budget Documents .......................... 20
Survey of Related Information .................................... 24
Procedure Used in Making the S t u d y ..................... 26
Sources of Information .................................................... 29
D elim itations and Lim itations of the Study . 30
Plan of the S tu d y ................................................................... 31
II. BUDGETARY REPORTS OF FEDERAL URBAN HOUSING PRO­
GRAMS AS A PART OF RELIEF AND RECOVERY . . . . 33
General Economic Conditions at the Beginning
of the P e r io d ......................................................................... 37
Economic Conditions of the Real Estate Market 38
The Federal Government Enters the Housing
M a r k e t........................................................................................ 39
The place of Grants and Subsidies in Federal
Housing P ro g ra m s........................................................ . 44
Objectives of the P ro g ra m s.......................................... 47
C haracteristics of Housing Provided by R elief
L e g isla tio n ................................................................... 48
Review of Budget Reports on Housing R elief
A c t i v i t i e s .............................................................................. 61
III. THE FEDERAL GOVERNMENT ASSISTS THE URBAN HOME
BUYER........................................................................................................ 63
Budget Reports on Housing Programs for Urban
Home B u y ers.............................. 64
L egislative Provisions for Home Buyers . . . 66
v
vi
III. THE FEDERAL GOVERNMENT ASSISTS THE URBAN HOME
BUYER (Continued)
F iscal Analysis of the Federal Home Loan
B an k s............................................................. VO
Federal Savings and Loan A ssociations . . . . 72
Federal Savings and Loan Insurance corpora­
tion ........................................................ 74
Federal Financial Support of the Home Owners’
Loan C o rp o ra tio n ............................................................... 75
Federal Financial Support of the Federal
National Mortgage A ssociation ............................... 78
Government Credit Commitments for the Federal
Housing Administration ............................................... 80
Special Purpose Housing Corporations . . . . 86
Critique of Budget Documents for the F iscal
Years 1932 through 1940 ............................................... 90
IV. THE FEDERAL GOVERNMENT SUPPLIES PUBLIC HOUSING • 92
Budget Reports on Public Housing Programs . . 92
Budget Commitments for Emergency R elief
Public Housing .................................................................... 95
F iscal C haracteristics of the Housing Act
of 1937 ........................................................................................ 98
Evaluation of Public Housing, 1937-1944 . . . 105
V. SUMMARY ANALYSIS OF GOVERNMENT HOUSING PROGRAMS,
1932-1940 107
The Contribution of Budget Documents . . . . 112
VI. FEDERAL URBAN HOUSING PROGRAMS AS A PART OF THE
WAR EFFORT . . ' ............................................................. 115
Problems of Measuring the F iscal Aspects of
War Housing Programs .................................................... 116
Conditions of the Housing Market which Con­
tributed to the F iscal Programs of Federal
War Housing P ro g ra m s......................................... 120
F iscal C haracteristics of Defense and War
Pious ing P ro g ra m s.....................................................................124
Termination of War Housing Programs and a
Summation of the Costs and Achievements of
the P ro g ra m s.............................. 140
Lessons from War Housing A ctiv ities and an
Evaluation of the Costs of These A ctiv ities 142
The Role of the Budget Documents in Reporting
on War H o u s in g ..........................................................................145
vii
Chapter Page
VII. GOVERNMENT PROGRAMS FOR POSTWAR PUBLIC HOUSING,
SLUM CLEARANCE, AND CITY REDEVELOPMENT . . . . 147
General Economic Conditions and the Real
Estate Market of the Postwar Period . . . . 151
Controversy over the WET and the TEW Housing
B i l l s ....................................................................................................156
Public Housing and the Housing Act of 1949 . 160
F iscal 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
Servicemen's Readjustment Act of 1944 . . . . 170
The Veterans' Emergency Housing Act of 1946 . 173
The Housing and Rent Act of 1947 175
Housing L egislation for 1948 176
The Housing Act of 1949 and the Home Buyer . 178
F iscal provisions of the Housing Act of 1950 180
Evaluation of the Postwar Period .......................... 181
Summary of Commitments to Aid the Private
Housing M a r k e t.................................................................. 185
The Emerging pattern . ........................................................186
IX. HOUSING EXPENDITURES IN THE POSTWAR BUDGET
DOCUMENTS....................................................................................................195
Information Available in Postwar Budget
D ocum ents..........................................................................................196
Total Budget Expenditures and Budget Expendi­
tures for Housing and Community F a c ilitie s 208
Trends in Postwar Housing Programs ..................... 211
An Evaluation of Postwar Budget Documents . . 213
X. FEDERAL URBAN HOUSING PROGRAMS AND THE ECONOMY
OF THE UNITED STATES.....................................................................218
The Importance of Urban Housing in the
Economy..............................................................................................219
Size and Trends of the House-building
I n d u s t r y .........................................................................................221
Government Influences on the Housing Industry 226
The Adequacy of the Federal Urban Housing
P ro g ra m s.........................................................................................231
viii
Chapter Page
XI. SUMMARY OF FINDINGS, CONCLUSIONS, AND IMPLICA­
TIONS OF THE STU D Y .........................................................................237
The Costs and Achievements of Federal Urban
Housing P ro g ra m s............................................... 242
The Emerging T r e n d ....................................................................244
Is the Budget Honest? .................................. . . . . . 245
Recommendations for Improving Budget Reports 247
Recommendations for Further Study .......................... 251
APPENDICES
A. SUPPORTING STATISTICAL TABLES ......................................... 254
B. CHARTS.......................................................................................................268
C. SIGNIFICANT HOUSING LEGISLATION ................................... 274
BIBLIOGRAPHY..............................................................................................................288