One of the greatest problems, as one of the original members points out, was only accentuated by the depression. That was the continual shifting of the working population from which the cooperative membership was drawn. Other factors mentioned were the rather high interest rates, maintained after current rates had fallen, the high luxury level of the project, and apartments ill-adapted for general

use.

COOPERATION IN OWNERSHIP AND MANAGEMENT, THE MUTUAL PROJECTS Mutual home ownership is here used to mean a system of rental ownership under which the occupants of homes in a given community lease the premises which they occupy from a company owned by the occupants themselves. In such a project the cooperative takes over for operation and eventual purchase a completed development. No down payment is required of the individual member or of the housing association, all funds being supplied by the sponsor or builder.

The rentals paid cover amortization, interest, insurance, taxes, maintenance costs, administration, and an allowance for vacancies. The tenant thus gradually builds up an equity not only through the member payments on principal, but also through certain other credits. Repair and maintenance charges are estimated annually and any excess of actual expenditures is credited to the tenant's account, thus giving him a direct incentive to take good care of his dwelling. His share of the vacancy reserves is also credited to him.

Should the member vacate his dwelling during the first year of occupancy, any reserves to his credit accrue to the housing corporation. Thereafter, however, he would be entitled to a refund varying according to the length of time during which he has contributed toward the various reserves and the extent to which these have been or must be drawn against (as for maintenance during his occupancy and renovation for a new tenant.) He would also be entitled to repayment of his stock (or principal) equity in an amount equal to the "current price" (i. e., original price depreciated over the period of amortization, less the amount of principal remaining unpaid.) A new tenant coming in to take the withdrawing member's place takes over the dwelling at its "current price," with the same monthly payments on principal as were being made by his predecessor.

The mutual arrangement has certain very definite advantages to the member. He is not required to make any down payment whatever beyond, possibly, a membership fee. Should he have a period of unemployment or other difficulties which make it impossible to meet his monthly payments, he may utilize his excess reserves for the purpose, or may borrow against his reserves. As contracts for dwellings are easily transferable on the books of the corporation, and as units of various size are provided in the projects, a member whose family is expanding or contracting may move from one dwelling to another that is better suited to his needs, with proportionate increase or decrease in total and monthly obligations. West Acres, Pontiac, Mich.

In 1936 the late Senator James Couzens formed a corporation to which he advanced $550,000 with which to buy land and construct 200 houses of varying size and type, in Pontiac, Mich. No down payment was required, and the rentals established were "substantially less than the prevailing rental rates." The monthly payment on a one-bedroom house, for instance, was $32.70, and for a three-bedroom house $43.80. Nevertheless, it covered amortization, spread over a 25-year period, interest, taxes, insurance, maintenance, etc., and was sufficient to yield a 3-percent return continuously on the sponsor's investment.

During the 10 years of its existence the project, under varied economic conditions, proved successful. Not only did the residents have the benefit of low rents, but without exception families which had to move away realized (through various credits) more than they had paid in on amortization.

Public mutual-housing projects

Under the defense housing program of the Federal Works Agency, eight projects were designated as "mutual" housing communities; three of these were in New Jersey, one in Pennsylvania, one in Ohio, one in Indiana, and two in Texas. The projects were built by the Federal Government under the provisions of the Lanham War Housing Act and carry no rental subsidies.

The purpose of the mutual plan was twofold: (1) To enable the Government to dispose of the projects after the war, and (2) to enable middle-income families (i. e., with incomes too high to qualify them for subsidized low-rent housing but too low to permit the making of any sizable down payments on privately built dwellings) to own their own homes. It was considered advisable that the dwellings be placed

on a rental basis, under direct PHA management, with ownership retained by the Government during the war emergency, in order to insure their being available for war workers. However, the Government planned to sell them to nonprofit mutual housing corporations which were formed by the tenants and met certain prescribed conditions.

The proposed plan

Organization.—In order to enter into negotiations for purchase, the tenants must form a nonprofit mutual home-ownership corporation. As a first step toward the formation of such a corporation in a project in which there is sentiment for purchase, a tenants' committee is selected in an election in which every leaseholder in the project is eligible to vote. This committee acts as an organization committee for forming and incorporating the new corporation.

The corporation is run by a board of nine trustees three representing the public, three the residents, and three the Government. When the residents have joined in sufficient proportions to indicate that the time is ripe for putting the mutual ownership plan into effect, the PHA is requested to lease the property to the corportation, with an option to purchase at the end of 2 years' operation. This 2-year period is designed as a testing time in which the corporation, under PHA supervision, masters the problems of management and learns to carry on independently. At the end of the 2-year period, the corporation may exercise its option to purchase. Membership requirements. No down payment is required. At the time of sale the corporation receives title to the entire property, but gives the PHA a mortgage for the entire purchase price and a promissory note for which the mortgage is security. These obligate the corporation to make, over a period of 45 years, monthly payments totaling approximately one forty-fifth of the purchase price per year, plus 3-percent interest on the unpaid balance.

The member pays a membership fee of $50 at the time of joining the organization. He signs a contract, binding himself to purchase, on an installment basis over a 30-year period, stock in the corporation equal to the value of the accommodations he plans to occupy. He is given a lease on the dwelling of his choice, running for as long as he continues to occupy it and makes his payments. These payments consist of a monthly rental which covers 3-percent interest, insurance, taxes, administrative expenses, reserves for maintenance and contingencies, and the payment on his stock subscription. Since the tenant is paying off his obligation in 30 years, whereas the corporation has a 45-year period of amortization, he enables the corporation to make prepayments on the principal owed to the Government, thus building up an advance equity or "cushion" for use in times of adversity.

An example of mutal-home ownership is Greenmont Village, Dayton, Ohio. Greenmont Village, Dayton, Ohio.-On October 1, 1945, at the expiration of the 2-year lease, the Greenmont Mutual Housing Corp. exercised its option and notified the Government of its desire to purchase the 130-acre tract containing 500 dwelling units and recreational and community facilities.

Every dwelling unit has a living room, utility room, kitchenette, and from one to three bedrooms. Monthly rentals are as follows: $27.50 for a one-bedroom unit in a double house, $30 for a two-bedroom unit in a double house, $32 for a two-bedroom unit in a single house, and $32.50 for a three-bedroom unit in a double house. These rentals are calculated to cover amortization as well as upkeep. Operating expenses at Greenmont have been kept low, averaging $10.86 per dwelling per month during the year ending September 30, 1945. This figure included expenses of management, janitorial service, utilities, repairs, replacement, maintenance of grounds and structures, waste removal, and insurance.

HOUSING WITH SELF-HELP FEATURES

The self-help feature has been included in the program of many housing cooperatives. Under self-help, some of the construction is undertaken by the members themselves. The kinds of work which have been done by members include clearing and grading the land, cutting the streets, excavating for basement and septic tank, pouring concrete, making building blocks, quarrying and shaping building stone, laying subfloors, making interior trim, other inside carpentry, laying the sheathing for the roof, and interior and exterior painting. This report discusses three examples of cooperative projects with self-help features: PennCraft, Pa., community; Iona, Idaho, Self-Help Cooperative; and Oakwood community, Chapel Hill, N. C.

Penn-Craft, Pennsylvania, community

The Penn-Craft experiment in housing dates back to the spring of 1937. Under the auspices of the American Friends Service Committee, a project to house 50 families of coal miners was launched using funds donated for the purpose. Fayette County, Pa., was selected as the site for Penn-Craft which involved subsistence farming features because many of the mines in Fayette County had been worked out and closed down by the time the project started.

The sponsors of the project hoped not only to demonstrate the possibility of improving the living conditions of the miners through self-help, under competent disinterested supervision, but also to insure a cushion (in the form of subsistencefarming homesteads) against hard times. The project was to be an experiment in education, utilizing the spare time of the miners to provide new and better housing owned by themselves and eventually leading to greater family selfsufficiency with decreasing dependence on paid employment.

The work has been carried out in two projects, the first on 200 acres of farm land in Fayette County near Republic, Pa., the second (now in progress) on 165 acres near the first property. In both cases, financing, management, and supervision were provided by Friends Service, Inc., a nonprofit organization. In the first project, only coal miners were eligible, but in the second project nonminers were also accepted.

Financing, and terms of contract.--Originally Friends Service, Inc., agreed to advance a cash loan of $2,000 to each member, of which not over $300 could be used for the hiring of the skilled labor necessary in construction, the remainder being used for building materials, outbuildings, cost of land, the homesteader's share of the cost of water system and roads for the whole project, and some small equipment; the loan must be repaid at the rate of $10 a month. In the new agreement these sums are raised to $2,500 and $500, respectively, and in the second project a down payment of $500 is required.

Under the original agreement the homesteader was to repay his loan (beginning when he moved into his finished house) over a period up to 20 years at the rate of $1 per month for every $200 borrowed; this amount included interest at 2 percent. A variable payment plan is provided for in the new lease agreement which relates the monthly payments on the cash loan to the family income.

The second lease agreement runs only for 1 year after date of occupancy, during which time the homesteader will pay the corporation a rental which will include interest at 4 percent. At the expiration of the year period, the leaseholder may exercise an option to purchase the homestead, in which case the corporation will assist him to refinance his cash loan, using the regular loan agencies to do so. From the proceeds of the refinance loan the corporation will be repaid in full, thus enabling it to turn over its funds more quickly and go on to further demonstration projects. In the original project, as noted, the corporation's funds were tied up for periods up to 20 years. At the end of that time, or sooner, if the homesteader paid up his loan more quickly, the latter would receive title to the property in fee simple, but not until his entire loan was repaid. The present lease agreement also reduces the subsidy on engineering service supervision and the use of heavy tools. The prospective home owner is now charged $15 per month for "overhead" from the time he signs the lease agreement until he moves into his completed dwelling.

Construction techniques.-Only two workers were on a cash basis; these were a skilled mason and a carpenter under whom, as gang foreman, the homesteaders and their sons worked. The plastering was done by the homesteaders under the direction of a plastering contractor hired by the corporation. Most of the homesteaders were unskilled in construction work, but the specialized skills of one or two members (an electrician and a carpenter) were utilized. For work done on each homesteader's house, the homesteader agrees to pay (in labor) a similar number of houses on the dwellings of the other colonists. The costs were

also minimized by making as complete use as possible of materials and resources at hand.

Progress of work.-Excavation on the first basement was started in August 1937. Because the mines were fairly active and the miners' free time therefore limited, the construction was slow. The first house was not ready for occupancy until November 1940.

By the summer of 1943 all 50 houses were occupied, and the project as originally planned was complete. Since then a further step toward greater family selfsufficiency has been undertaken and is now under way. A nearby farm of 165 acres has been bought and divided into 15 homesteads of 10 acres each. By September 1946, 11 of the new homesteads had been applied for; 8 of the

applicants are ex-servicemen. Work was already in progress on two of the homesteads at the time they were visited. Oakwood community, Chapel Hill, N. C.

The project at Chapel Hill was directed by the Service Employees Corp., a private organization whose stockholders were keymen in the business organization of the University of North Carolina. Membership in the housing group was limited to employees in the university service plants and the university auxiliary enterprises which serve the community and the town of Chapel Hill (water department, telephone exchange, etc.).

The housing scheme was launched in 1940. Members were to work together under a foreman selected by themselves. A 40-acre tract of land was obtained for $2,200 and lots were prices at $210 each. Under the plan the amount to be expended on materials was limited to $2,000 per house and no loan could exceed two and one-half times the borrower's annual income or a maximum of $4,500.

Considerable savings resulted from low architect fees, and wholesale purchases of fixtures and materials. Furthermore, all of the road building, clearing, grading, and basement and septic-tank excavation was done by the participating members as well as the painting, electric wiring, and installation of the plumbing and heating system. Labor accounts were kept in terms of hours worked.

The project of 14 houses was financed from funds of the Service Employees Corp. and by loans from an insurance company and by FHA insurance. The cost ranged from $2,750 to $5,000. The labor cost of the typical house averaged about $1,200, of which the personal labor of the members accounted for about $500. A 10-percent down payment was required with initial monthly charges on a typical house averaging $23.34.

Iona Self-Help Cooperative, Iona, Idaho

To fulfill an urgent need for habitable living quarters for amounts which they could afford, 15 families in Iona, Idaho, (later joined by six others) undertook a self-help housing project in 1934. A small revolving fund was obtained from the State-Federal self-help program in effect at that time, and this has been used to make loans to members for housing purposes.

In order to receive a loan, the member is required to own a plot of land with title clear. Upon fulfilling this requirement, he may receive a cash lo n of not to exceed $500 plus a "labor loan" consisting of part-time assistance by this fellow members in building his house. The lot is accepted as security for the loan.

The labor loan must be repaid by the borrower in labor on the houses of the other members, and the cash loan is paid over a period of from 2 to 5 years. Payments range from $3 to $10 per month, which is generally less than the amount previously paid in rent. When the loan is paid and the labor claims satisfied, the borrower receives title to the property. Generally, three loans are necessary to provide for the construction of a complete house.

Thus in a period of 6 to 10 years the family was enabled to pay for a house worth some $2,000 to $2,500 without owing more than $400 to $500 in cash at any one time or paying more than $12 in interest in any year. The exchange of labor accounted for a very great reduction in the cash lay-out otherwise necessary. From the start the housing project was successful and made earnings. In the first six years of operation, the revolving fund grew from $1,650 to $3,000. Although the fund provided sufficient money to finance the participating group, one of the leaders pointed out "if there had been more in the fund, we could have touched more people."

OTHER JOINT HOUSING PROJECTS SPONSORED BY COOPERATIVE

HOUSING ASSOCIATIONS

Crestwood Community, Madison, Wis.

Crestwood is the housing development sponsored by the Wisconsin Cooperative Housing Association in Madison. The original group that planned the housing project in 1936 consisted of persons employed in the various State offices. Present membership includes not only State employees but also Federal employees, members of the State university faculty, a few local businessmen, and some returned

veterans.

Actual construction of the houses did not begin until 1938. In the interval a tract of 75 acres of land (space for 200 dwelling units) was acquired in a convenient suburb, and plans were drawn up for a large-scale development of houses which would be owned by the association and leased to the individual members. After long negotiations with FHA, the association changed its original plan and pro

vided for individual ownership of both lots and houses. Finally construction plans for 20 houses were approved by FHA, and building operations began in August 1938.

The achievements of the cooperative association have been the following: (1) The purchase and plotting of the tract, (2) the financing and installation of a water and sewer system, (3) the creation of a sanitary district, (4) the furnishing of architectural service, (5) the supplying of title insurance for members, and (6) the building of a small number of houses. All but three of the houses were constructed by individual contract and the association has no control over them except to pass upon the general style of architecture, to see that the cost does not fall below the minimum of $3,000, and to pass upon the acceptability of purchasers. Should the association not exercise its option, no controls are imposed as to sale price.

SPONSORED BY LABOR ORGANIZATIONS

Carl Mackley Apartments, Philadelphia, Pa.

The Carl Mackley Apartments, Philadelphia, constituted the first housing project undertaken in 1934 by the Public Works Administration as part of its employment program. The project was planned and sponsored by the American Federation of Hosiery Workers (CIO), with the purpose of providing suitable housing for its members, many of whom were living under substandard conditions. The union exchanged a piece of land owned by it in the downtown section for one of 42 acres (valued at $85,000) in the Frankford district. A 35-year 4-percent Federal loan of $1,039,000 was obtained, and additional funds were supplied by the union, by a public-spirited friend, and by other individuals. A limiteddividend corporation, the Juniata Park Housing Corp., was formed which supervised the construction and still holds ownership and management of the project. In this project the resident never becomes the owner of either his apartment or of equivalent stock in the association. For as long as he remains in the project, he is a renter only.

When vacancies occur in the project, preference is given to union hosiery workers, other unionized industrial workers, and other industrial workers, in the order named. Although textile workers form the largest group in the present population of the houses, many other occupations are represented, including both manual and white-collar workers. Families with children are preferred. The general requirement is that the monthly family income should not be less than three times nor more than five times the monthly rent of the apartment desired. The project has suffered from the effects of two early financial assumptions that proved to be mistaken: (1) The total cost of construction proved to be some $200,000 more than had been anticipated (because of this, certain planned features had to be either eliminated or curtailed); and (2) at the time the project was started, it was expected that legislation would provide tax exemption for a certain period (as is the case under the New York housing law for limited-dividend corporations). Rentals were set accordingly. For 3 years, expecting such legislation, the corporation paid no real-estate taxes. At the end of that time, taxes were due for the whole 3-year period, amounting to some $20,000 on an assessed valuation of $660,000. The corporation has kept up its interest payments on its Government loan, and part of its amortization. Neither the union (which, apart from the Government, is the heaviest stockholder in the corporation) nor any of the other investors has received any interest.

Stonewall Heights, Front Royal, Va.

In view of the acute housing situation in Front Royal during World War II which was aggravated by the extension of a large viscose plant, the local union of the United Textile Workers (CIO) formed a housing committee to see what could be done about the situation. The first step was the construction of a sample house. A tentative goal of $5,000 for house and lot was set, but the final actual cost was $7,800. In the belief that a considerable element in this high cost was the fact of its being a single unit, the union decided to undertake a large-scale housing construction project. A tract of farm land was purchased and plans were drawn for a new community. The plans provided for 158 units, but only 50 units were actually undertaken. By August 1946 all 50 homes were completed. An unusual number of difficulties were encountered by the group. The first was the inability of the local union to hold title to real estate under Virginia law. As a result of union efforts, an amendment was obtained which removed this disability. Also, the union found it necessary through its regular stock corporation, the Old Dominion Housing Corp., to act as its own contractor because of