That “One Third of a Nation”

by EDITH ELMER WOOD, An Article in Survey Graphic, February 1, 1940.

Editor’s Note:  Edith Elmer Wood  (1871–1945) housing reformer; born in Portsmouth, N.H. After graduating from Smith College (1890), she wrote fiction, undertook settlement house work, and married before launching her influential, life-long career in housing reforms. As lobbyist, writer, and government consultant, she helped define New Deal housing policy.

EQUAL OPPORTUNITY WHICH LIES AT THE HEART OF DEMOCRACY implies for every man, woman and child at least a sporting chance to attain health, decency and a normal family life. It was because the cards were stacked against a third of the nation that there had to be a new deal in housing.

From another angle, no democratic nation can expect to survive in a world of totalitarian competition unless its citizenry, at all economic levels, are preponderantly sound in body, mind and character.

Those twin principles are the foundation on which our public housing rests. As we are using the new phrase in the United States, public housing is what is built, owned and operated by the newly created public housing authorities, national or local.

Subsidized housing is paid for in part by the taxpayers instead of by the occupants, whether by means of a capital annual grant, or tax exemption. Loans from whatever source, which are repaid, principal and interest, are not subsidy.

At present our public housing is also subsidized. The combination offers the only way to arrive at what we are trying to do—provide fit housing for families of the ill-housed and get rid of worn out housing.

In the early stages of our history, settlers built their own homes, good or bad, with their own hands and some help from their neighbors. Much of our farm and rural housing is still in this stage. When we came to town building and industrialization, private business enterprise took over the job. It has had no competition until recently, and the result is a larger acreage of worse looking slums than can be found in any other allegedly civilized country. Private enterprise rise can offer no alibi. That is simply what happened as a result of laissez faire and the free working of supply and demand.

Really, the result ought not to surprise anyone, and private enterprise is not to blame. It cannot be expected to function where there is no prospect of profit. The relation between the cost of producing a family dwelling unit and the incomes of families is such that only the upper third of our families can afford to buy or rent a new house with profit to builder or landlord. The middle group get the pick of the secondhand market. The bottom third get the culls. And this is not merely true of the depression period, but was true at the height of post war prosperity.

Houses are capital goods, not consumption goods. You don’t eat them up, and it takes a great many years to wear them out to the collapsing point.

Houses are also like factories. Their output is children—the citizens of tomorrow. The full time workers are the mothers and homemakers. Fathers, in the normal order, are part time helpers. Industrial plants are constantly being modernized. Machinery is scrapped long before it wears out. The health and safety of industrial workers is guarded by law. Shall a nation do less to assure optimum quality in its citizens of tomorrow than a manufacturer does to produce high grade teakettles? Shall it throw less protection around the working conditions of those who raise its children than of those who produce its paper bags?

Building codes and tenement house laws do, of course, endeavor to prevent or ameliorate the worst housing evils. But private builders and landlords cannot be compelled to do business at a loss, and restrictive laws cannot be enforced if doing so would leave a whole class of tenants homeless. Only when public housing provides otherwise for these tenants does it become possible to say: “Make those houses fit or tear them down.”

How Much Bad Housing Is There?

AT LEAST A THIRD OF OUR HOUSING IS BAD ENOUGH TO BE A health hazard, but not all in the same way or to the same degree. The coverage of moral hazard is less than that of physical hazard, which is fortunate, as its effects are worse.

About two fifths of our housing is rural, divided more or less evenly between farm and non-farm. The Farm Housing Survey made in 1934 shows an appalling lack of modern sanitation and conveniences, except in a few favored regions. To call 80 percent of our farmhouses substandard is an understatement. Non-farm rural homes we know about only by sample. The 1940 census will probably show that they rank somewhere between farm and urban housing. The abundance of blue sky, green grass, sunlight, fresh air and wholesome influences which usually (not always) accompany rural housing atone for some (by no means all) of its shortcomings.

In respect to the homes of the urban three fifths of the population, we can speak with more exactness, as they have been subjected to abundant surveys during the period 1934-1936. The structural condition of these urban homes appears to be:

Good . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39. percent
Needing minor repairs. . . . . . . . . . . . . . . . . . . . . . . . . . . . .44.8 percent
Bad . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.2 percent

Further:
4.4 percent of dwelling units have neither gas nor electric lighting.
14.6 percent lack a private indoor push toilet. (It is outdoors or shared.)
19.9 percent have no bathtub or shower.
17.4 percent of occupied dwellings are crowded or overcrowded. “Crowded” implies more adult occupants than rooms; “overcrowded” more than twice as many.

The Real Property Inventories, from which all of the above data are taken, made no record of dark or airless rooms or of cellar dwellings. But we know from other sources of their prevalence in many cities, and we know that they are particularly injurious to health.

To call a third of the nation or a third of those who live in urban communities “ill-housed” can hardly be an exaggeration.

How Much Low Income Is There, and Where?

ACCORDING TO THE BEST AND LATEST OF OUR SAMPLE Surreys, the results of which are set forth in “Consumer Incomes in the United States,” just published by the National Resources Committee, the distribution of families by income level may be summarized in round numbers as follows:

American Family Incomes: 1935-36

Under $1000 . . . . . . . . . . . . . . . . . . . . 42 percent

$1000-$2000. . . . . . . . . . . . . . . . . . . . 37 percent

$2000-$3000. . . . . . . . . . . . . . . . . . . . 13 percent

Over $3000 . . . . . . . . . . . . . . . . . . . . . . 8 percent

The first thing to note is that these figures cover all families in the United States and that the distribution is weighted downward by the extremely low incomes- of farm and other rural families. Where the Consumer Incomes study classifies urban incomes apart from rural, it shows a less discouraging picture. Moreover, it shows a smaller percentage of very low incomes in large cities than in small ones, and decided differences according to geographic section. So the national average distribution was far from representing the situation in New York City or in Seattle even in 1935-36.

The next point is that family incomes and their distribution vary from year to year and sometimes very sharply. We know that the national income has substantially increased and unemployment substantially decreased since 1935-36.

My personal guess is that at the beginning of 1940 there are not more than one third of all American families with incomes under $1000 and not more than another third with incomes between $1000 and $2000. And the boundary figures would have to be lifted appreciably for the cities or for the northern or Pacific Coast sections. Anybody else is welcome to guess otherwise.

No one, however, is justified in assuming that the income distribution of four years ago is even approximately true for today or that it is going to be true ten years from now. We have traveled a long way toward recovery, and the immediate trend is upward.

Houses have more stability than incomes. If we should run into an industrial boom next year and all our employables get jobs, that famous third of the nation would no longer be either ill-fed or ill-clothed, but it would still be ill-housed-as it was back in the prosperous 1920s Some fresh paint would be used here and there, some leaky roofs would be patched, and rents would go up There would still be no hope except in public housing.

Effects of Bad Housing and Bad Neighborhoods

WE KNOW BEYOND A PERADVENTURE THAT AREAS WITH HIGH deathrates and high sickness rates, especially for diseases dependent on contact infection, approximately coincide with areas of bad housing. General deathrates and infant mortality in slums are likely to be twice the city average, tuberculosis and pneumonia rates perhaps four times as high. Of course there are other causes, such as lack of medical care, poverty, ignorance, hereditary defect. But physical environment, which is predominantly housing, remains a major factor in the complex.

Not all bad housing areas have a high rate of delinquency or crime, but all areas with high rates of delinquency and crime appear to be areas of bad housing. It is often said that the neighborhood is more important than the house as a factor in producing delinquency. This is probably true, but the statement needs clarifying. To the city planner, “neighborhood” means buildings and open spaces. To the social worker, it means human associates. Both play their part in influencing the growing child, but we need to keep our thinking and our language clear.

The lack of play space for young children inside the crowded home and of yard space immediately outside it force them onto the street at an age when they ought to be still under close maternal care.

The typical near-in slum is a jumble of factories, ware. houses, junkyards and tenements, interspersed with saloons, dives and hangouts. Neighborhood children must rub elbows daily with vice and crime. Moral contact infection appears to be more perilous than physical, for there is a wider spread between the juvenile delinquency rates in such a slum area and that in a neighborhood of l pleasant homes with house yards than between the corresponding infant mortality rates. Parents, schools, churches, settlements carry on a gallant fight against unwholesome influences. Most slum children do not become criminals. But the casualty rate is much too high.

Still another set of studies in recent rears has shown for a number of cities low much the taxpayers are now spending to maintain their slums as slums. In dollars and cents for hospitals and clinics, police, courts, reformatories and jails, made necessary by the excess illness and death, and the excess delinquency and crime, as well as extra costs in fire protection and garbage collection, the taxpayers are now paying out just about as much as it would take to do away with the slums and rehouse their inhabitants.

Public Housing Around the Country

WHAT HAVE WE TO SHOW for public housing so far in the United States?

It began in the summer of 1933. The National Industrial Recovery Act opened a crack of the door by naming the clearing of slums and the building of low rent houses among the purposes for which the new Public Works Administration could make loans and grants to public agencies. But there were no public housing authorities in those days, and no local ones could be created without state legislation. The only way to produce results quickly was for the housing division of the Public Works Administration to clear slums and build houses itself, which it proceeded to do.

The housing division had to formulate its objectives, set its standards, train its own staff and educate the general public as it went along—no easy task. It had to face misunderstanding and bitter hostility. In view of the obstacles overcome, its demonstration program was an achievement to be proud of, trough only a first step on a long road.

Fifty-one projects were built in thirty-six communities, containing 21,700 family dwelling units. More than half are on cleared slum sites. Nearly half are occupied by Negro tenants. Whether four-story apartments in New York or one-story bungalows in Miami, all have an abundance of sunlight, air, blue sky and green trees. All eve safe play spaces for large and small children. All have the essentials for health and for normal family living.

The first PWA project opened its doors to tenants in Atlanta, in 1936. The last ones were completed after they had been taken over by USHA. Tenants everywhere seem well and happy. Community spirit is high. Maintenance is excellent. Projects are sources of real local pride, pointed out to strangers.

Meanwhile, however, the states had been passing enabling acts under which local housing authorities were being appointed, and the demand grew for permanent using legislation and for decentralization. Slums and using are local problems, which ought to be dealt with locally. National financial aid was, however, still obviously necessary if anything important was to be accomplished.

The United States Housing Act of 1937 was the result. Under it, the local housing authority initiates, makes plans, acquires sites, builds, owns and operates projects. It may borrow up to 90 percent of the cost of a project from the United States Housing Authority, which administers the act, and it may receive annual grants from the same source to make possible rents low enough for the groups rehoused. Ten percent of capital costs, and subsidy at least equal to one fifth of the national contribution, must be contributed locally. This last generally takes the form of partial exemption from local real estate taxes.

The USHA was set up on November 1, 1937, and took over the work, records and staff of the PWA housing division. Congress allowed it to make loans to a total of $500 million (increased in 1938 to $800 million) and to make annual grants to $20 million (increased to $28 million). It has the duty of establishing procedure, setting standards and exercising some degree of supervision, as well as being a fiscal agent. Presumably as time passes, local autonomy will increase and central control diminish.

Two years after its creation, thirty-eight states had enabling acts and 264 housing authorities had been appointed. The number of local projects under loan contract was 297 in 135 communities, for which the national government was in process of advancing $521,317,000. The number of projects under construction at that date was 107, containing 44,436 dwelling units. The first half dozen projects were already receiving tenants.

Under the financial limits so far set by Congress, a total of about 160,000 family units will result. Permission to continue the program awaits congressional action. It sounds well to say that the PWA program would house a town the size of Lincoln, Neb., and that the USHA program would take care of a city the size of San Francisco. But compared with our ill-housed millions or compared with the accomplishments of certain other countries, it is evident that we have made only the merest beginning.

The local authorities of England and Wales have built with aid from the national government about 1,200,000 family dwelling units in the past twenty years. We should have to do three times as much to equal their achievement in proportion to population. It is only fair to point out, however, that they built hundreds of thousands of small “additional” dwellings for rank-and-file working people before they undertook the much more difficult job of demolishing slums and rehousing the families in them. We started, without previous experience, at the most difficult point. And at the time we started, we were at the bottom of an unprecedented depression with an army of unemployed and no social security system to keep their heads above water.

With few exceptions, PWA projects were filled with tenants of fairly low income who had previously lived in substandard housing. It was not possible, however, under the PWA legal setup, to get rents as low as desired. Considerably lower rents are being achieved under USHA, partly because construction costs have been reduced, but also because the 1937 act permits a larger subsidy. Therefore families of much lower income are able to live in the newest projects. Suppose we take a concrete example.

Buffalo had one of the highest rent scales among the PWA projects, and came in for much local criticism on the basis of not reaching the class of tenants who needed public housing. The Buffalo Municipal Housing Authority has two of the earliest projects under the new dispensation. It has already made figures public on tenant income. The average income of the first 147 families who moved into the two projects was $930; $896.72 for Negro families at Willert Park, and $957.87 for white families at Lakeview. The lowest family average (for two-person families) was $779.25 at Lakeview.

In my considered judgment, for a city the size of Buffalo in the northeastern section of the country, those are quite as low tenant incomes as the present program should aim at serving. (Incomes run much lower in the new projects in the South.) Further economies in construction costs or in the cost of management should be applied to reducing—and therefore spreading—the subsidy. For the movement is futile unless continued on a very large scale, and in order that it should be so continued, the burden to the taxpayers must be held to a minimum.

Whom Are We Trying to House, Anyhow?

THE GENERAL OBJECTIVE, OF COURSE, IS AN America in which every family is properly housed. But that will take many years—twenty-five or thirty at least. So it becomes of considerable importance who has priority. We know quite well that in housing by private enterprise the family with the highest income is served first. We know that public housing is different. Does it therefore follow that the family with lowest income or with no income should be served first? Should indigence give priority? A great many people seem to think so, including some social workers who are good friends of housing. But that answer is much too simple.

Such a policy would turn public housing projects into asylums for problem cases, while low paid workers who support their families would still be raising their children in the slums.

If public housing were an emergency relief measure, it might be logical to succor the most unfortunate first. Since it is a long range public health measure, the course should be followed which will pay largest dividends in terms of public health. That means children first.

The Wagner-Steagall Act says that public housing for which it provides annual grants must either be built on cleared slum sites, or equivalent elimination of unfit housing must take place elsewhere. Tenants must be families unable to secure “decent, safe and sanitary housing.” They must also be “in the lowest income group.” Hearings in the House of Representatives showed that members of Congress responsible for that phrase intended it to mean the ill-housed third.

Within these limits it would seem to be the part of prudence to perfect the technique of providing wholesome housing for steadily employed workers, with minimum use of subsidy, proceeding from there downward to include other more difficult groups.

Government Competition with Private Enterprise

IS SUBSIDIZED PUBLIC HOUSING IN FACT COMPETITIVE WITH private enterprise? And is such competition always an evil to be shunned? This is a point where clear thinking by the public is necessary.

Subsidized public housing is in competition with slum housing, which it aims to put out of business as fast as it can replace it. It has no apologies to offer on that score. Housing which endangers public health, safety or morals isn recognized as belonging to the same category as rotten meat or decayed fruit.

It is recognized that public housing should not compete with private enterprise where the latter is functioning or has been in the habit of functioning with even reasonable success. That means the top economic third. The middle third may be debatable ground, but so far as the Wagner-Steagall Act is concerned, and the housing built with its aid, families in the middle third are also taboo. In view of the large subsidy permissible under the act and the need of securing maximum health results from its expenditure, as well as reassuring the construction industry and real estate, limitation of tenants to the ill-housed third is sound. Also sound is the statutory establishment of rent-income ratio to make sure that low rent housing does not go to families able to pay more. Raising the ratio of permissible income to rent to six-to-one instead of five-to-one where there are three or more minor dependents, recognizes to that extent the special needs of large families. Taken in connection with the established procedure which assigns dwellings according to size of family, allowing neither overcrowding nor superfluous space, it establishes a logical sliding income scale for each project according to size of family.

No one objects to the idea that private enterprise should extend downward the economic boundaries of the class it serves by lowering the cost, while preserving the quality of its product. But it has no right to be a dog in the manger and insist that ten or eleven million families shall go without service indefinitely until it is ready to supply them.

Who Will Back Subsidized Public Housing?

1. Statesmen and others who believe in democracy. (Democracy and slums cannot live together.)
2. People interested in public health.
3. People interested in reducing delinquency and crime.
4. All interested in child welfare.
5. Teachers and church leaders who realize the hopelessness of trying to counteract the influence of the slums through teaching
or preaching alone.
6. Social workers who realize the part played by bad housing in the problems they have to deal with.
7. Economists interested in saving our cities from bankruptcy, as they decay progressively at the center and pile up
new expenses around the edges.
8. City planners hunting ways to redeem our unplanned slap. dash towns for a better future.
9. Architects who accept the challenge to their profession of finding a way to rehouse all the people.
10. Conservative persons who are afraid of a proletarian revolution and who realize that the bitterness and frustration bred in slums are the stuff of which revolutions are made. (This is not a large group yet, but it will grow as the logic percolates.)
11. Real estate men who realize that private enterprise is powerless to deal with the existing mess, but that it can profit by following upward trends started by public housing. (There are only a few in this class, so far,
but they are leaders. Tomorrow there will be more.)
12. Contractors and makers of building materials who scent business prospects.
13, Building trade workers similarly motivated.
14. All union labor on general principles. (Support 90 far has been from a few leaders rather than rank and file. It will grow.)
15. The people who live in the bad housing. (They are only beginning to wake up to the possibilities. This is destined to be the most important group of all. It must be kept very well informed to save it from wasting its energies on something impossible. Votes cannot make 2 and 2 equal 8. —E.E.W.

Let us admit that the moving of lower income families into pleasant, well planned communities of modern housing is likely to arouse a divine discontent among the somewhat-better-off families of the middle group who find themselves living in older, less convenient, less attractive homes in incipiently blighted areas.

That such stimulus produced by public housing does actually help rather than hinder private enterprise is demonstrated in British experience. The situation was like ours in 1920, only much worse. A very large subsidized public housing program was launched. Since the private building industry took the lead in 1928 it has enjoyed the greatest prosperity in its history. Every third family in England and Wales lives in a house built since the World War.

Comparative Costs of Public and Private Housing

WE MUST FIRST BE SURE WHETHER WE ARE TALKING ABOUT construction cost or “over-all” development costs (including land, improvements and landscaping) and also whether we are talking about cost to the builder or to the purchaser, between which lies the item of profit.

The formalities which are properly required in spending public money inevitably add to cost. Those involved in building by an agency of the national government are especially onerous. They are embodied in acts of Congress of general application and carry rigid requirements, which, however appropriate for large public buildings, add disproportionately to the cost of small homes.

Large scale building, whether public or private, makes possible some economies, while it adds inevitably to over head. A carpenter-builder who throws in much of his own time, takes short cuts and snatches bargains, may produce a few houses at a lower cost than anyone else.

Public housing eliminates the final profit of the entrepreneur. Back of that lie the same series of profits as in private building for contractor and subcontractor, architect, laborer, maker and distributor of building materials and site owner. A number of these profits could be reduced or cut out if it were considered desirable.

One of the most important economies in public housing is through long term financing at or close to the low interest rate of government bonds. The annual cost of interest and amortization comes directly out of rents. The rate may be as important as the amount, in which development cost is reflected.

Early USHA projects reaching the construction con. tract stage showed an average per-family-unit cost of $2830 against $3840 for the building permits of private enterprise in the same cities—a 35 percent differential.

Where Shall We Put Our Public Housing?

IF LIFE COULD BE REDUCED TO A SIMPLE EQUATION WITH ONE unknown quantity, we might give the answer. But, alas, it’s a quadratic with a whole tangled complex of unknown quantities!

There is no one answer to the housing problem. We must not put our public servants in legal straitjackets by imposing statutory obligations to solve their local housing problems precisely in this way or that. The general in the field should be left free to be an opportunist within the limits of his main objective—to push ahead where he sees an opening, to occupy a height by surprise in a quiet sector, to use now one sort of attack, now another. Slums will never disappear unless their break-up is begun at the public expense. But there should be no “bailing out” of owners of unprofitable property.

All this hooks up with the city and regional plan. It requires a long view ahead.

How much public housing must we plan for? That at once suggests “How long must we plan for?” Obviously a long range program is required. To be efficient and effective, it must be continuous.

We do not know what solutions private enterprise may evolve over a term of years. We do not know how much social security, minimum wage, collective bargaining, and the economic situation may change and (one may hope) improve the distribution of income at the lower levels. We are not yet sure what form the undoubtedly needed help to farm and rural housing ought to take. But we may quite safely adopt the recent estimate of Nathan Straus for the subsidized public housing program of 300,000 family units a year for fifteen years, or a total of 4,500,000. That is a large order, but not an impossible one. It leaves plenty of room, not only for private business enterprise but for possible developments in unsubsidized limited-dividend or cooperative housing for the middle third. Its fulfillment depends on Congress, but even more on all of us. Which is just another way of saying that, in a democracy, public housing will go as far and be as sound as the public opinion behind it.

Source:  Wood, Edith Elmer, “That “One Third of a Nation,” Survey Graphic, Vol. 29, No. 2, p. 83 (February 1, 1940), http://newdeal.feri.org/survey/40a04.htm. New Deal Network, http://newdeal.feri.org (June 10, 2014).

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