our chances for repeal on the local level seem slim. Who can dare say rent control is not a political issue? The mayor and all members of the city council have been duly advised by me that Senator Taft, who had just been returned to the Senate over the most determined opposition of those forces usually alined against repeal of rent control and themselves constant supplicants for public favors; Senator Bricker and Congressman Vorys, both residents of Columbus, all voted in 1950 against extension of rent control. Our city officials seek election under the banner of the Republican Party, but in actual practice they more nearly follow the line of the Socialist Party. Another angle which is perhaps typical of conditions in other cities is the matter of publicity. Our newspapers have been generous in singing the praises of our public officials whose sole interest in taxpaying property owners seems to be to get their votes and thereafter hike the taxes, water rates, bus fares, wages of city employees, and what have you, but these same newspapers consistently lay aside news items offered by our association. This, of course, places income property owners at a great disadvantage. Further, we wish to point out that it is the small owners who experience the greatest difficulty with area rent office. Larger owners who have expert accountants, legal advisers, etc., at their elbows, are able to prepare their applications in a formal and regular manner and often know politicians who have influence, succeed in getting rent increases. The smaller owner of one, two and three units, lacks these advantages, is usually emphatic in his demands for his rights, but because of his lack of funds to hire expert and influential advisers he must continue to bear his cross, but with an ever-mounting bitterness toward the rent-control system. I meet many of these unfortunate landlords and, in some cases, have been able to advise them in a way that has afforded them a measure of relief. They comprise the vast percentage in numbers of rental property owners, but they do not believe in pressure groups and special privilege, and so are slow to band together for their mutual protection as is done in the field of labor, farmers, business, etc., and for their patriotic fervor they toil on with their rights hypothecated by those of you to whom they look for better-much better-things. As in other cities, the proponents of rent control cite the great harm that will befall tenants if controls are removed. Information, often originating or augmented by the area rent office, appears in the papers in support of such contentions. In Upper Arlington, a suburb of Columbus, the city council voted for decontrol several months ago. Right away we noted an article in the Columbius Dispatch which stated "complaint after complaint" had been registered with the city officials about excesive rent increases. I personally visited the city clerk of Upper Arlington and was given the name of the one and only landlord against whom a complaint had been filed. Then I contacted the owner, a widow, and was informed that she had raised her rents to her three tenants who, with herself, occupied her four-family building. She suspicioned that I was a stooge from the rent office, but did admit that she had raised the rents from $69 to $120, and stated that the tenants had been protected for the difference for a long time, that her's were better apartments, with full dining room instead of dinette, than adjacent properties renting at from $120 to $140 per month on a voluntary basis. The question is, should this lady, because she had furnished homes for these three families at about half price for many, many months, be obliged, out of her own purse, to continue to subsidize them indefinitely? As there are now many apartments for rent from $60 per month and up, these three families had the option of settling in one of them. I have 38 units, fully furnished, with heat, gas, water, and janitor service, and strictly modern, now renting at $75.60 per month. Tenants who pay even $65 per month could, with a modest down payment, use the same dollars to enjoy the independence and security of owning their own home. PUBLIC HOUSING RATES, INCREASED COSTS The Labor Union, a newspaper, under date of March 2, 1951, reports increases in Government housing rents of 28 percent at Oak Ridge, Tenn., and 41 percent at Richland, Wash. The before-and-after rental rates were not given. Thousands of the smaller income property owners have no income other than their rents. The cost of living increases hit them right between the eyes. Food is up 123 percent over 1940, building costs 119 percent, house furnishings 104 percent, clothing 93 percent, and all repair labor is up no less than 200 percent. How can we hope that these good citizens will be able to live and to maintain their properties in a decent state of repair? To live they must eat, so there is nothing else they can do but to let their properties go to pieces and slowly become slums. By and by no one will live in them at any price. Are we to assume that our Congress would deliberately promote such a dismal fate for millions of its constituents struggling mightily to shun the odium of living on doles? On the other hand, should Congress accord these owners even the same increases exacted by the United States Government, 28 percent to 41 percent, perhaps an average of 35 percent, there would be no further need for rent control because this would make the rents competitive and the supply and demand rule would come into play and that would end it all. Surely Congress could do no less for these good folks who have suffered the yoke for 9 long years. When we witness the great concern of the Federal Government to insure the living standards of the farmer by the parity process, also their willingness, nay, even eagerness, to reach out to favor organized labor in its enthusiastic zeal to force up the wage rates, we wonder just what is wrong with the owner of a small piece of income property who is forbidden even to mingle with the crowds, but is forced aside by the same Government and must forego the benefits of prosperity which are so appealing to all the other elements of society. Why not work out a parity formula for the landlord? POLITICAL ASPECTS Rent control, if anything, ought to be a purely humanitarian institution with no political implications whatsoever. It may be fairly safe to assume that owners of controlled property are about equally divided between the two major political parties. Yet, when the last law was enacted, in June 1950, it was common knowledge that many votes were cast in favor of the bill because it was thought politically expedient to do so. Failure of enactment, it was said, foreshadowed the defeat of certain, at the time powerful, Members of the Congress. So, regardless of whether it was right or wrong to do so, the income property owner was again subjected to do the harsh and rugged boot of the Housing Expediter. But property owners were more articulate, come the November election, and I think the defeat of Senators Lucas, Meyers, Donnell, and to some extent Tydings and Thomas, was largely due to the influence of the property owners and their friends at the polling places. The facts speak for themselves. Law, as we view it, should mete out justice share and share alike to all citizens. Failing this, a so-called law becomes instead discrimination, forced subsidy, mockery, fraud, and abuse. No class of citizens can be granted even the slightest favor or advantage except at the cost or expense of other class or classes of citizens. In the case of rent control, what Congress has made "law" takes a part of the income property owner's property value away from him and hands it over, without even the suspicion of compensation, to a tenant. Tenants, in the main wage earners, have enjoyed at least four rounds of wage hikes since March 1942 aggregating some 125 percent or more, so where is the justice of a law which forces the landlord to furnish the tenant with a home at the 1942 price level? What other commodity can you buy today at March 1942 prices? You boys here in Congress have even provided the President with more wampum to make him more popular at the poker table; you have tapped the till yourselves, but the poor widowed landlady weeps over your neglect of her sad plight. Returning again to the political aspects of the case we are convinced that rent control would never carry in a Nation-wide poll. Consider the millions of property owners in America. Surely very few, if any, of them would favor rent control whether they are renting their property or not. They might wish to do so some day, and surely would prefer a free market. Further, my own inquiry of labor union members convinces me that there are as many owners as renters among them. Rent control makes a fine issue for labor bosses to show the rank and file of union members how their big hearts bleed for the lowly tenant who may, with cheap rent, better afford a television set, deep-freeze, or a new automobile. But the home owning labor union member does not fall for this philosophy. By and large, union members are fair and want to be as fair to other people as they want other people to be to them. There are no extra votes to be garnered from this group of citizens. Tenants are pretty much in the same class and are above trading their votes for the right to enslave their fellow men. would be better to forget rent control as a vote getter. It PASTEL MINK OPPORTUNITIES And now, gentlemen, I kindly invite your attention to exhibit B of this report. This is a copy of the annual report of Sherwell Realty Co., and was sent to me as the owner of some of their shares. While I was, of course, highly pleased to note the increase of $12,950 in the net income for the year, that feature just faded away the instant my vision rested upon the item: "Fee paid for rent increases, $3,682." What do you make of that item, gentlemen? Is it your understanding that an owner should pay somebody, even 5 percent, in order to get a rent increase? If your facts warrant a rent increase you should have it without paying anything to anybody; if your facts do not conform to the area rent office's notion of the regulation requirements, or if you have not been properly introduced by the right politician, you won't get an increase. This old boy must have had the "open sesame" because rents went up $22,842 over the preceding year. Not too bad at a cost of only $3,682. The original copy of this report was sent to Senator John W. Bricker, of Ohio, and so he is familiar with it. I am in no position to investigate the operations of the area rent office in Chicago, but I wish I were. Can you picture, say 1,000 owners in this bracket, each paying $3,682 to get some rent increases? That would make a sum of $3,682,000. And we all know that there are several thousands of similar income properties in the Chicago area, some larger, many smaller. But if there is some way of hiring somebody to work things out for you, both the big and the little fellows in that locality, judging from my operating experiences there, soon get wise. Then, running an area rent office would become a pretty big business. It is my understanding that you deal with a middleman, sometimes a former rent office employee, who is familiar with the proceedings and also knows the folks at the rent office; in fact he may be very close to one or more of them. With a set-up like that granting and receiving rent increases could get to be quite "ducky." They may even have some pastel minks out there. Well, a dumb sucker like me who has no more sense than to pay for what I get at least once, sometimes more than once, as you will learn if you have occasion to employ a plasterer, electrician, or a plumber, can only gaze upon an item like the $3,682 fee and wonder. What do you gentlemen, whose sensibilities may by now be less subject to shock than mine, what do you make of it? CONCLUSIONS Our conclusions, in the broad sense, apply to the local situation in Columbus, and with equal force to the national scene. 1. Rent control ought to be strictly nonpolitical and nonpartisan. Attempts to use it as a vote-getting instrument have resulted in disaster for the politicians. 2. Owners have endured this unfair burden since March 1942, and have sacrificed billions of dollars to tenants, who during the same time have not only been allowed, but encouraged and assisted by the Federal Government to increase their own incomes 200 percent or more. These owners, generally thrifty, patriotic, taxpaying citizens of the highest moral type, are entitled to be relieved of this inequality by this Congress. 3. The Korean "police action," which is so often used as an emergency justification for rent control is, in truth. exactly the opposite. Working people are now all employed at high wages. Why, then, should widows and aged folks who have saved some of their earnings to buy income property be treated less fairly than the laborer, the farmer, the butcher, or the baker? Landlords have to eat in war as well as in peace times. 4. Tenants who live in homes with frozen rents often will not move just because the rent is so cheap they can't afford to. Meanwhile, they live in rapidly depreciating property which the owner cannot keep in good repair from the low rent. So the tenant stays on until the place becomes so shabby and run down he is ashamed to be seen near it. Then he moves. The house has become a slum. Tenants, on the whole, would rather pay more rent and have good housing. 5. Taxpayers are entitled to be relieved of this extravagance. The defense program should have the benefit of every dollar of the taxpayer's money not urgently and immediately needed elsewhere. Rent controllers serve no useful purpose, but do much harm. Surely it is harmful to promote antagonisms between citizens who would, but for them, be the best of friends. Let's save the expense and restore landlords and tenants to their former happy estate. 6. Municipalities, most of whom are always whooping it up for better living conditions, fine parks and boulevards, elimination of slum areas, etc., would find the owners of low-cost housing doing a great deal to help them beautify their cities if rent control were removed and these owners permitted to charge fair rents sufficient to enable them to paint, repair, and renovate the properties which have been so sorely neglected since March 1942. 7. Labor, through their perennial bosses, have always advocated rent control. Don't they know that rent to a landlord is just what wages are to a union workman? On the one hand they seek to tie the hands of the landlord, while on the other they shout from the housetops their own constitutional right to have no limitations on their own eternal struggle for ever and ever higher wages. But the individual members of labor unions are home owners and they want just as much freedom for themselves as property owners as they do for themselves as wage earners. Counting noses, you will find that labor is not for rent control, they are willing for the small property owner to have equal freedom with themselves over control of their private incomes. 8. The public will be better served by the end of rent control. Positive proof of this is the testimony of officials from cities and States where decontrol has been effected. Rents level off, the tenant has a choice of selection, and everybody goes about his business happy in the knowledge that nobody is forced to do anything. The public good will be served by ending rent control everywhere. It has been our purpose to briefly point out the effect of rent control on the various interests involved. For several years now this one control has been renewed, but over an ever-decreasing portion of the income property owners of the Nation. Of some 40,000,000 rental units in the Nation on the freeze date, only 18,000,000 were frozen. That number has since dwindled to less than 3,900,000. In these hearings, year after year, we have listened to the repeated, heart-breaking appeals of labor bosses and charity workers, all well served by the landlords of the Nation, declare in dreadful tones the fate that would befall the lowly tenants if rent control were repealed. And year in and year out, by modification of the law by the Congress and by local actions, dozens of these communities have been decontrolled, and only good has resulted. Owners and tenants are a necessary combination and they must, in the main, get along with each other and serve each other. Any other argument is pure piffle. With but 20 percent of the original total units still frozen, it is time to remove this eyesore from the landscape and restore it to its pristine beauty. Landlords ask for no special privilege. All in the wide world these good folks ask of you is that you return to them the liberty you took away from them in March 1942, and which you took away from no other class of the citizenry. They have done no wrong. They look to the present Congress to set them free. Gentlemen, I have finished. Thank you and good-by. THE PROPERTY OWNERS ASSOCIATION EXHIBIT A (Copy of a report of a vacancy survey made by Property Owners Association of Franklin County, Ohio, prepared by Roy Wenzlick & Co., St. Louis, Mo.) Has the housing shortage in Columbus been satisfied? THE VACANCY SURVEY 1. Who made it? The Property Owners Association of Franklin County. 2. Why was it made? control hearings. 3. How was it made? 4. When was it made? To comply with Federal law to submit evidence for de House-to-house canvas. From September 1, 1949 to December 31, 1949. Where was it made? Scattered over nearly 50 percent of the residential units within the city limits of Columbus, Ohio. 5. What did it reveal? This is what it revealed: 39,106 dwelling units surveyed; 19,322 owner-occupied; 19,784 tenant-occupied or vacant; of these 19,784 rentable units, 983 were vacant, in other words 5 percent of the rentable units were vacant. But how does this compare with 1940? In the city of Columbus there was a vacancy of 5.2 percent among rental units. So when this survey was made the vacancy among rentable units was virtually the same as it was in 1940. Furthermore, since this survey was completed more than 350 new dwelling units have been started in the Columbus area. But where are all these vacancies found? They were found in all sections of the city: 25 percent were found in the lowest rent districts, 14 percent were found in the next lowest rent districts, 30 percent were found in the medium rent districts, and 31 percent were found in high rent districts. No one What would happen to rents in Columbus if they were decontrolled? knows, but we do know that experience of 100 cities where rents have been decontrolled. What has happened to rents in these cities, for example, what percentage of the tenants received increases? Only between 25 and 30 percent of the units freed of control raised their rents. * * How much did rents go up? The over-all rent level in decontrolled cities rose 6 percent * of those units that were increased the average rise was between 20 and 25 percent. Is there more specific information? Yes. The Bureau of Labor Statistics has reports on seven major cities that have been decontrolled. What percent of tenants received rent increases in these cities? Knoxville, Tenn., 57 percent received increases; Dallas, Tex., 59 percent received increases; Houston, Tex., 33 percent received increases; Jacksonville, Fla., 52 percent received increases; Topeka, Kans., 36 percent received increases; Spokane, Wash., 46 percent received increases; Salt Lake City, Utah. 44 percent received increases. In other words, in most of these large cities less than one-half of the units free to rise received rent increases. But how much did the rents that were raised go up? The average dollar per month increases were Knoxville, between $5 and $9.50; Dallas, between $11 and $18; Houston, between $10 and $14; Jacksonville, between $6 and $13; Topeka, between $7 and $11; Spokane, between $5 and $6; Salt Lake City, between $6 and $6.50. Some of these seem high. What was the vacancy percentage when decontrol took effect in these cities? Figures are not available in all of them but those we have show that generally higher raises went with the low vacancy percentages. But in Columbus the vacancy in rentable units is 5 percent or more. None of the cities mentioned had so favorable a percentage of vacancy when they decontrolled their rents. How would various rent increases affect different income groups? Or how much would their cost of living go up? A rent increase of― 10 percent. 20 percent 30 percent 40 percent. Would raise the cost of living budget The smaller percentage increase applies to the cost of living budget of those families whose annual income is $5,000 or more. The larger percentage increase applies to the cost-of-living budget of those families whose annual income is $2,000 or less. Families whose annual incomes lie between these two extremes will have their cost of living budget affected proportionately. What conclusions may be drawn from this survey? 1. The vacancy percentage in Columbus is now virtually the same as it was in 1940. 2. This vacancy percentage is higher than that in nearly 90 percent of other major cities that have already been decontrolled. |