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3. Therefore the housing shortage in Columbus is no more acute than it was in 1940—2 years before controls—and the rent increases that would follow decontrol in Columbus should not be so high nor so widespread as those following decontrol in other cities.
ExhIRIT B Sherwell Realty Co., Chicago, comparison of income and expense years ended Sept. 30,
1949 and 1950
Salaries and wages.
Total operating expenses..
Property taxes (estimated).
1948 and 1949 were $49,913.42 and $50,162.82, respectively).
Total other expenses.
Net income before depreciation.
STATEMENT BY J. F. McCaw LEY, INDIANA STATE PRESIDENT, PROPERTY OWNERS
OF AMERICA, INC., INDIANAPOLIS, Ind. Mr. Chairman and honorable committee, my name is J. F. McCawley. I reside at Indianapolis, Ind., and maintain offices at 512 Odd Fellow Building of that city.
I am the Indiana State president and official spokesman for the Property Owners of America, Inc., which is the trade association for the rental housing industry of our State of Indiana.
I wish to present for consideration the recommendations of our officers, directors, and members. These recommendations are submitted in the capacity of well-qualified witnesses for the rental housing business. Utmost pains have been taken to document our statements; our conclusions are based on actual facts revealed from authentic sources and without prejudice, but with a great desire to regain the constitutional freedom as guaranteed in the Constitution and Bill of Rights to every American citizen. Equal justice for all, which would include property owners also-and we further endeavor to prevent the total destruction of the rental housing industry of this Nation.
All American citizens rejoice in the fact of being free-born American citizens with all the freedom to enjoy which God has ordained that man should have and enjoy all the days of his life; upon these great principles this Nation was born, and for it to stay alive and continue to exist we must acknowledge, respect, and protect these principles of freedom.
The rental housing industry is an important part of the structure of every community and should be considered, treated and respected in that manner. The business of providing rental housing was conceived in the same manner as every other business of this Nation. The need was recognized which in many cases are temporary homes or that the tenant isn't financially able to purchase a house. This business is the same as all other businesses in as much as it has to operate with a profit sufficient to continue, but most of all other businesses many thousands of our people have entered into this business and have a few small rentals of houses or apartments and with this they have had faith and hopes that they would be able to provide their own social security in the retiring part of their life. These are the people which should be commended. However, they have and are being the most disregarded, disgraced and treated with less respect than many of the gangsters and criminals who were recently investigated by the Kefauver committee. There has been and now is judiciary authority exercised in many of the local rent control offices by the investigators, expediters and even some office help, this should and must be stopped.
EACH YEAR FAITH IS DESTROYED
Each year we are told this will be the last year for any rent control, “I'll never vote for it again,” but there is always some special excuse-just anything to keep the yoke of bondage on the Property Owners of America. We want to have faith in what our law-making body tells us and want this false representing stopped and we trust that we have elected such gentlemen to this high office who will be faithful to the principles of the Constitution of these United States and end this thing.
RENT CONTROL PLANAMERICAN DESTRUCTION The United States is now completing its ninth year of Federal rent control. As in the past, the Housing Expediter again requests that it be renewed, expanded and strengthened.
1951 finds this country facing serious problems and it is time we stop and carefully consider the history and effect of this un-American so-called war emergency legislation.
FACE FACTS IN WORLD WAR I
First, let's look at what happened during World War I when the economy of the country operated without the interference of controls or rationing. According to the United States Bureau of Labor Statistics, we find that for the years 1913-16 the general price structure, including rent, was gradually rising. We entered the war in April of 1917 and by December 1917, rent throughout the United States had dropped to where all of the gain of the previous 4 years had been wiped out, while the price of everything else in the economy had continued to rise.
This drop in rents came about due to the added vacancies that occurred. These vacancies came about because of the expansion of the Armed Forces which automatically reduced the civilian population. During World War I, as in World War II, the people had a great increase in dollar income, but their spending was not controlled or channeled. When left to their own choosing, they directed nearly all of their excess money to consumer goods rather than to housing. From the beginning to the end of the war the progressive expansion of the amount of spendable money had increased the all-item price index 39 percent. Of course, this greatly added to the landlords' costs; nevertheless, the index on rent only had risen less than 3 percent during this period.
KNOW THE TRUTH IN WORLD WAR II
It is very important to remember that there was never a national housing shortage in the United States prior to rent control, and, that the shortage developed within 1 year after rent control was inaugurated.
The law, as originally passed, was intended to keep rents from skyrocketing in industrial war centers where great increases in population were contemplated. Disregarding the clear intent of the law, its purpose was quickly expanded to the control of nearly every rental dwelling in the United States regardless of its connection with the war industry or any increase in population.
A DOUBLE PURPOSE-AN EXCUSE TO CONTINUE RENT CONTROL AND PUBLIC HOUSING
After the war's end, Federal rent control was extended, first, because of the housing shortage, next to stop inflation, next, because of a rental housing shortage (there was no shortage of homes for sale), and the last time it was because the Expediter claimed there was a shortage of rental units for the low and middle income groups.
Regardless of statements made by the Expediter, labor groups or social workers, the only authentic figures accurately revealing the true housing situation are those issued by the United States Bureau of Census.
The recent booklets issued by the United States Bureau of Census completely cover every person and dwelling in the United States for 1950. Using these figures along with those of 1940 we see the effect rent control has had on our housing situation throughout the Nation. It will surprise many to find that
(a) The number of dwellings increased 23.6 percent.
(b). The population increased only 14.5 percent (the second smallest percentage gain in the Nation's history).
(c) The number of vacant dwellings increased from 2.5 million to 3.4 million. (d) The number of dwellings occupied by owners increased 8.2 million.
(e) The number of dwellings occupied by tenants decreased 0.5 million. (This decrease in occupied rental dwellings added to the hundreds of thousands of vacant dwellings for rent in 1940 reveals the tremendous loss of rental dwellings available.)
(f) The increase in the number of dwellings exceeded by 2 million the increase in families.
In 1950 there was the astounding total of 3.9 million dwellings occupied by only one person.
This represents an increase of over 45 percent. (These singleoccupancy dwellings are heavily concentrated in the large cities still under rent control.) We now have a total of 7.3 million dwellings vacant or occupied by only one person.
CONSIDER A SIMPLE PROBLEM
These Government figures are hard to believe unless we are shown exactly what happened. To aid in understanding this paradox let's first consider a simple mathematical problem. When over 10,000,000 persons are taken out of their homes and put in servicemen's camps or sent overseas, as was done during World War II, is there an increase or decrease in the housing for the balance of the people? In a free economy there can be only one logical answer. We increase the housing for the balance of the people. How then was it possible to develop an apparent national housing shortage so quickly during World War II? We started with a considerable number of vacancies and logically we should have increased this number as we did during World War I.
The answer is that this shortage came about only because of a controlled economy. We froze rent at a low level in 1942 and almost simultaneously forced up wages to nearly double their former rate. We also added more workers per household which increased the purchasing power of many families.
With the large surplus of money, the le sought to buy things they desired, but we stopped the manufacture and sale of most of these items and rationed nearly everything else of importance. The one important thing we did not ration was rental housing and, therefore, the Government actually channeled this excess money into rental housing. In only a matter of months the people spread out and took up all of the rental housing available. Working girls, bachelors, widows, widowers, and divorced people who shared occupancy and divided rent, each took his own individual dwelling. Married couples without children also spread out into larger apartments. By 1943 we had created a progressively false national housing shortage--the more that went to war, the more the remaining civilians could and did spread out. With increased costs and frozen rents, the owners
found it more practical, because of wear and tear, to rent to the least number of persons every time a vacancy occurred. This added further to the false shortage.
Prior to rent control, great numbers of single dwelling structures were rental units. When rents were frozen on these dwellings it was not long before owners found it more profitable to sell them. Individual homes were the one type of rental units that buyers could get possession of by forcing out the renter. Hundreds of thousands of these rental homes were progressively sold and taken out of the rental market. Occupants renting them were evicted by the owner. In many cases, the evicted renters, in turn, bought a dwelling and evicted another renter.
This progressive buying, singly and by joint ownership of two- or three-unit apartment buildings, continues to take many rental units out of the market.
PROVISIONS FOR HOARDING HOUSING
Having seen how this great maldistribution occurred, it is readily understood that the most important figure to consider is the national figure of 3.9 million dwellings occupied by only one person. Surely this startling 3.9 million dwellings occupied by only one person was not due to their purchase of a dwelling. The tremendous increase in single occupancy was the result of single persons replacing families in dwellings. It is obvious that only under the protection of rent control have these individuals been able to spread out and cause this maldistribution of housing. These single people used to share apartments or private rooms and would quickly do so again in a free market. They are actually hoarding housing with Government protection. Remove rent control, and, with a nominal increase in rent, our Nation will quickly create hundreds of thousands of vacancies. Additional thousands of rental dwellings now being held off the market only because of rent control would again be offered to the public.
PENALTY OF RENT CONTROL
Further considering the so-called housing shortage, we know that there is a great surplus of vacant houses for sale in nearly every large city in the United States. There is also a surplus of hotel accommodations and private rooms for rent.
There are also many new and decontrolled apartments for rent. Vacant apartments built before 1942 are still scarce, and always will be, while they are being sold at a false low price as compared to any of the above housing accommodations which are priced in a free market.
Everyone looking for housing will continue to try to get one of the bargains under rent control. Only those frozen out will rent or buy in the free market which is abnormally high only because of rent control. How can we ever accumulate vacancies in the bargain, frozen units? Millions of vacancies have occurred during the last 7 years, but the Government has forced the owners to offer these vacancies at false bargain prices. Fortunately for the owner, he could pick the tenant to give his bargain to and so, naturally, he picked the smallest family with the greatest wealth and influence.
Large families without money or influence really need rental units, but they are frozen out and forced to rent decontrolled units or buy homes on an unsound basis. We will always have this so-called housing shortage under these controls and the middle and low income groups can never expect to get frozen rental units under the law. A proven road of hardship.
DISCRIMINATION AND MILLIONS UNFAIRLY TREATED
Any check of the treatment of owners under rent control will show that this law has been the most unfair law ever enforced in this country. The records show clearly that until the 1949 act was passed, no owner could even claim a hardship unless his net dollar income was substantially less than it was in 1942. In the meantime, because the general price structure had almost doubled, the owners' dollars would buy only half of what they would in 1942. Thus, the owners' purchasing power was frozen at a maximum of one-half of what it was prior to rent control.
The Expediter's formula for the 1949 fair net income act is unfair and ridiculous. No attention whatever is paid to the figures on the owners sworn income-tas returns. Not even the most rabid advocates of low rates for public utilities have
ever dreamed of figuring net returns so low as does this plan of the Expediter's. Under his method, no consideration whatever is given the value of the property and no interest on the mortgage is allowed to be used in calculating operating costs.
Is it good for our Government to make millions of good, frugal citizens subsidize others who may be rich, indolent, or otherwise? That is what we are doing. Was it fair to single out owners and say to them: “Your net dollar income shall be the same or less than it was in 1942, while all others shall have no limit on their income''?
Today we help labor and farmers get higher than a free-market price and let everyone else, except owners, sell their labor or products at the highest price in our history. If an owner leases to a renter willing and anxious to pay a fair price slightly higher than the frozen rental he is brought into the Federal court and tried for his great crime like a kidnaper, bank robber, or dope peddler. Does this sound like America?
WE MUST STOP UN-AMERICAN THINKING AND PROPAGANDA
For the last 3 years the Housing Expediter's office and his allied pressure groups have filled the records of the congressional hearings with the predictions of dire things that would happen if rent control was removed (mass evictions, riots, etc.). On checking the records, we find that many of these groups who were for rent control have been expelled from the main body, because of Communist leadership. These Communists believed in socialized housing and were, and still are, desperately trying to carry on rent control.
UNJUST LAW CONTINUES The proponents of this unnecessary, unfair and un-American law know that it can only endure under a strong, central-powered police state where recourse is far removed from those enshackled.
These same groups cry out against the use of Federal injunctions to stop riots and civil commotion in labor troubles, but highly endorse reducing the dignity of Federal injunctions to that of parking arrest slips by requesting and getting Federal injunctions for petty overcharges of rent. It is hard to understand how these groups can insist on collective bargaining between labor groups and employers and at the same time, favor a law making it a Federal offense for individuals to voluntarily enter into personal contracts on housing without the provisions, rules, and prices laid down by a Federal dictator.
At no time has the Expediter suggested that an owner's net dollar income should give him the same purchasing power he had in 1942. At no time has he suggested that owners and renters (even the rich ones) be allowed to make a mutually agreed lease. He says he must protect the lower income group, but actually, he wants to control ali housing.
HOW LONG, OH LORD, HOW LONG Each year owners have suggested that vacancies being held off the market and those that come on the market be decontrolled. They have also suggested that all single-occupancy dwellings or large dwellings that are not properly occupied be decontrolled, thus curing the maldistribution and the so-called shortage. These suggestions have all been vigorously opposed by the Expediter. Under the local option rule he has used every technicality to avoid having cities terminate rent control, but in spite of him, over 40 percent of the 231 largest cities in the country have freed themselves of his control-24 of these 231 cities have lost population but gained housing; nevertheless, they are among those still under Federal control. It is crystal clear that the Expediter has at all times been interested only in perpetuating himself.
BEWARE OF THIS
In spite of having the greatest amount of housing in the history of the country in comparison to its population, the Expediter's present position is that we still need more but at a price lower than private industry can furnish it. This means that the owners of rental housing built before 1942 must continue to subsidize the renters (including the rich and indolent) until enough Government-owned public housing is constructed to give all the renters exactly what they desire at someone's else expense. Few, if any, legislators in Washington could approve such a financially impossible socialistic housing plan.