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Case, Frederick Ewing
FISCAL ASPECTS OF FEDERAL URBAN HOUSING PROGRAMS
Indiana University, Graduate School of Business D.C.S. 1951
University
Microfilms
International
300 N. Zeeb Road, Ann Arbor, MI 48106
FISCAL ASPECTS OF FEDERAL URBAN HOUSING PROGRAMS
BY
FREDERICK EWING CASE
A D issertation Submitted in P artial Fulfillm ent of
the Requirements for the Degree of Doctor of
Commercial Science in the School of
Business of Indiana U niversity
INDIANA UNIVERSITY
1951
'"RT
ACCEPTANCE
This D issertation has been accepted in p a rtia l fu l
fillm ent of the requirements for the Degree of Doctor of
Commercial Science in the School of Business of Indiana
U niversity.
Date W. / f j ' i
Dfearr, School of Business
Chairman
mber
Member
Member
i i
PREFACE
Economic action by the Government in a democracy has
more chance of affectin g the economy of the nation favorably
if the action is explained to and understood by the people.
The Federal Budget stands as the most sign ifican t statement
of what the Government intends to do and has done in a ll of
its a c tiv itie s Including urban housing programs. This study
was undertaken for the purpose of evaluating the budgetary
aspects of Federal urban housing programs and of reviewing
and c r iticizin g Budget procedures.
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ACKNOWLEDGMENT
The w riter ivishes to express his appreciation of the
assistance given him by Dr. John K. Langum, Professor of
Business Adm inistration, Indiana U niversity, and formerly
Vice President of the Federal Reserve Bank of Chicago, who
provided the original Inspiration for th is research and who
assisted in the development of the ideas; Mr. John Reeves,
Bureau of the Budget, who provided m aterials which further
explained portions of the Budget documents and which were not
generally available; former Congressman James Noland, Repre
sentative from Indiana, who supplied many out-of-print mate
ria ls which could not be found in the lib ra ries; Dean A. M.
Weimer, School of Business, Indiana U niversity, who supervised
and fa c ilita te d the completion of the study; and Professor
Edward E. Edwards, Indiana U niversity, who provided helpful
comments.
F. E. C.
iv
TABLE OP CONTENTS
Chapter Page
I . THE PROBLEM......................................................................................... 1
Statement of the P r o b le m .............................................. 1
Basis of the S t u d y .............................................................. 4
The Role of Budget D ocu m en ts..................................... 5
The Measurement of Costs of Urban Housing
Programs ................................................................................... 6
The Significance of Federal Urban Housing
Commitments.............................................................................. 12
Achievements Versus B enefits of Urban Housing
P ro g ra m s........................................ ....................................... 15
The Importance of the Budget process for Fed
eral Urban Housing programs . . . . . . . . 17
Inadequacies of Budget Documents .......................... 20
Survey of Related Information .................................... 24
Procedure Used in Making the S t u d y ..................... 26
Sources of Information .................................................... 29
D elim itations and Lim itations of the Study . 30
Plan of the S tu d y ................................................................... 31
II. BUDGETARY REPORTS OF FEDERAL URBAN HOUSING PRO
GRAMS AS A PART OF RELIEF AND RECOVERY . . . . 33
General Economic Conditions at the Beginning
of the P e r io d ......................................................................... 37
Economic Conditions of the Real Estate Market 38
The Federal Government Enters the Housing
M a r k e t........................................................................................ 39
The place of Grants and Subsidies in Federal
Housing P ro g ra m s........................................................ . 44
Objectives of the P ro g ra m s.......................................... 47
C haracteristics of Housing Provided by R elief
L e g isla tio n ................................................................... 48
Review of Budget Reports on Housing R elief
A c t i v i t i e s .............................................................................. 61
III. THE FEDERAL GOVERNMENT ASSISTS THE URBAN HOME
BUYER........................................................................................................ 63
Budget Reports on Housing Programs for Urban
Home B u y ers.............................. 64
L egislative Provisions for Home Buyers . . . 66
v
vi
III. THE FEDERAL GOVERNMENT ASSISTS THE URBAN HOME
BUYER (Continued)
F iscal Analysis of the Federal Home Loan
B an k s............................................................. VO
Federal Savings and Loan A ssociations . . . . 72
Federal Savings and Loan Insurance corpora
tion ........................................................ 74
Federal Financial Support of the Home Owners’
Loan C o rp o ra tio n ............................................................... 75
Federal Financial Support of the Federal
National Mortgage A ssociation ............................... 78
Government Credit Commitments for the Federal
Housing Administration ............................................... 80
Special Purpose Housing Corporations . . . . 86
Critique of Budget Documents for the F iscal
Years 1932 through 1940 ............................................... 90
IV. THE FEDERAL GOVERNMENT SUPPLIES PUBLIC HOUSING • 92
Budget Reports on Public Housing Programs . . 92
Budget Commitments for Emergency R elief
Public Housing .................................................................... 95
F iscal C haracteristics of the Housing Act
of 1937 ........................................................................................ 98
Evaluation of Public Housing, 1937-1944 . . . 105
V. SUMMARY ANALYSIS OF GOVERNMENT HOUSING PROGRAMS,
1932-1940 107
The Contribution of Budget Documents . . . . 112
VI. FEDERAL URBAN HOUSING PROGRAMS AS A PART OF THE
WAR EFFORT . . ' ............................................................. 115
Problems of Measuring the F iscal Aspects of
War Housing Programs .................................................... 116
Conditions of the Housing Market which Con
tributed to the F iscal Programs of Federal
War Housing P ro g ra m s......................................... 120
F iscal C haracteristics of Defense and War
Pious ing P ro g ra m s.....................................................................124
Termination of War Housing Programs and a
Summation of the Costs and Achievements of
the P ro g ra m s.............................. 140
Lessons from War Housing A ctiv ities and an
Evaluation of the Costs of These A ctiv ities 142
The Role of the Budget Documents in Reporting
on War H o u s in g ..........................................................................145
vii
Chapter Page
VII. GOVERNMENT PROGRAMS FOR POSTWAR PUBLIC HOUSING,
SLUM CLEARANCE, AND CITY REDEVELOPMENT . . . . 147
General Economic Conditions and the Real
Estate Market of the Postwar Period . . . . 151
Controversy over the WET and the TEW Housing
B i l l s ....................................................................................................156
Public Housing and the Housing Act of 1949 . 160
F iscal Analysis of Low-Rent Housing Programs 165
The Role of the Budget Documents ...........................168
V III. THE POSTWAR PATTERN OF FEDERAL URBAN HOUSING
PROGRAMS FOR THE HOME BUYER.....................................................170
Servicemen's Readjustment Act of 1944 . . . . 170
The Veterans' Emergency Housing Act of 1946 . 173
The Housing and Rent Act of 1947 175
Housing L egislation for 1948 176
The Housing Act of 1949 and the Home Buyer . 178
F iscal provisions of the Housing Act of 1950 180
Evaluation of the Postwar Period .......................... 181
Summary of Commitments to Aid the Private
Housing M a r k e t.................................................................. 185
The Emerging pattern . ........................................................186
IX. HOUSING EXPENDITURES IN THE POSTWAR BUDGET
DOCUMENTS....................................................................................................195
Information Available in Postwar Budget
D ocum ents..........................................................................................196
Total Budget Expenditures and Budget Expendi
tures for Housing and Community F a c ilitie s 208
Trends in Postwar Housing Programs ..................... 211
An Evaluation of Postwar Budget Documents . . 213
X. FEDERAL URBAN HOUSING PROGRAMS AND THE ECONOMY
OF THE UNITED STATES.....................................................................218
The Importance of Urban Housing in the
Economy..............................................................................................219
Size and Trends of the House-building
I n d u s t r y .........................................................................................221
Government Influences on the Housing Industry 226
The Adequacy of the Federal Urban Housing
P ro g ra m s.........................................................................................231
viii
Chapter Page
XI. SUMMARY OF FINDINGS, CONCLUSIONS, AND IMPLICA
TIONS OF THE STU D Y .........................................................................237
The Costs and Achievements of Federal Urban
Housing P ro g ra m s............................................... 242
The Emerging T r e n d ....................................................................244
Is the Budget Honest? .................................. . . . . . 245
Recommendations for Improving Budget Reports 247
Recommendations for Further Study .......................... 251
APPENDICES
A. SUPPORTING STATISTICAL TABLES ......................................... 254
B. CHARTS.......................................................................................................268
C. SIGNIFICANT HOUSING LEGISLATION ................................... 274
BIBLIOGRAPHY..............................................................................................................288
