Appendix 27: Home-Ownership's Central Role for Amateur Woodworking

(I want first to commend Charlie Belden and Keith Rucker for discussions about matters that relate to the concept of home ownership and woodworking. Charlie helped me sort out the three concepts, Time, Space, and Money)

Home ownership stands at the center of "the American dream".

America's concept of home ownership was profoundly transformed in the fifty years after the Civil War. Why?

As the nation's population begun its rural-to-urban migration, the nation shifted from an agrarian to an industrialized urban society, and, in the post-Civil War era, immigrants from abroad flowed into American cities, the ownership of a single-family house emerged as a symbol of what many call the American dream.

Home ownership became a sign of having "made it", of entering the ranks of the great middle class.

Residential mobility -- an encompassing term for disruptive instability of residence caused by renting -- fell from high levels in the nineteenth and early twentieth centuries in both rural and urban settings to a more modest and constant rate of only one family in five were renters a year after World War II.

A 1990 revisionist study of housing residential mobility argues that residential did not -- as claimed by earlier historians -- decline gradually between the two world wars. Instead, nineteenth-century levels of mobility persisted until after 1945.

Between 1890 and 1940, less than half of U.S. households owned their homes. Home ownership declined during the Great Depression, to 43.6 percent in 1940. Since the 1950 census, when homeowners represented 55 percent of all householders, the rate of homeownership has increased steadily.

Turn-of-the-Century Annual Cost-of-Living Expenses for Working Families

This box contains data on the turn-of-the-century Annual Cost of Living expenses for selected from the source noted at the bottom. Included in the graph are data on rental and mortagage expenses. I have highlighted selected details below that show details covered in the graph. COST OP LIVING AND RETAIL PRICES IN THE UNITED STATES BY G. W. W. HANGER ...As stated, this investigation covered two subjects, distinct in character, yet closely allied; that ... cost of living covered the year 1901, and its object was to determine the cost of housing, fuel, lighting, food, clothing, etc., in the average workingman's family in the United States, while that into retail prices covered the period from 1890 to 1903 and had for its object the collection of data which would show the extent of increase or decrease in the retail prices of the staple articles of food during the period and thus render it possible to determine, approximately at least, the changes in cost of living in the several years covered.... From 2,567 families reports were secured showing in detail the expenditure for each of the principal articles of food and the quantity consumed; the expenditure for clothing for husband, wife, and children; for taxes; insurance; labor organizations, etc.; religious purposes; furniture; books and newspapers; amusements; liquors; tobacco; medical attendance, etc.; also the disposition of the surplus, if any, and the method of meeting the deficit, if expenditures exceeded income. Source: Hanger, G.W.W. [and others, United States Bureau of Labor, Bulletin of the Bureau of Labor, Exhibit of the Bureau of Labor at the Louisiana Purchase Exposition Washington, DC: Government Printing Office, 1904, pages 1129-1130, 1146

Problems of Renting

Home Ownership, Income and Types of Dwellings Page 31 APPENDIX III: PROBLEMS OF RENTING I The Tenant's Problems The importance of the renting problem in the United States is indicated by the fact that over one-half of the families in the country live in rented homes. There is a wide variation, however, in the rental situation among the different cities of the country. According to the 1920 census, in cities of 100,000 or more inhabitants, the proportions rented ranged from 97.9 per cent in Manhattan Borough, New York City, to 48.9 per cent in Des Moines, Iowa. Over four-fifths of the homes were rented in greater New York, Boston, Cambridge, Fall River, Jersey City, and New York City. Slightly less than half of the homes were rented in Des Moines and Grand Rapids. The proportions rented in other cities of this group ranged between one-half and four-fifths. The Individual's Problem of Renting or Owning The question of whether or not one rents is an individual one. The chief reasons which influence one to rent are that he desires freedom of movement; that he is unable to arrange a sound plan for purchasing; that he feels that it is cheaper to rent; that he questions home ownership as an investment; and that he does not wish to undertake the obligation of paying for a home. Renting solves the problem of adjusting cost of housing to needs and income for many people better than ownership can. The renter ordinarily feels that he is more capable of judging a fair rental price than a fair purchase price. He has less to lose if he makes a mistake in judgment. Fear of the outcome of his negotiations, perhaps based on experience of his friends, deters many an inexperienced householder from owning. Many renters, however, look upon these reasons for renting as temporary ones and are planning to own their own homes eventually. As one renter states: "But there are other conditions under which it is desirable to own one's house, and we are already planning to build. This we will do as soon as we are able to finance the purchase properly, when my remaining here is more certain, and when construction work and the real estate market are deflated." Source: THE PRESIDENT'S CONFERENCE ON HOME BUILDING AND HOME OWNERSHIP, WASHINGTON, D. C. Home Ownership, Income and Types of Dwellings (Reports of the Committees on HOME OWNERSHIP AND LEASING ERNEST T. TRIGG, Chairman, "RELATIONSHIP OF INCOME AND THE HOME, NILES CARPENTER, Chairman; TYPES OF DWELLINGS JOHN IHLDER, Chairman; Edited by JOHN M. CRIES ANb JAMES FORD, Assisted by JAMES S. TAYLOR)

By 1960, because of the post-World War II economic boom, favorable
tax laws and easier mortgage financing, homeownership exceeded 60 percent.

What put the brakes on residential mobility was the impact of the National Housing Act (FHA) of 1934.

The housing policies launched by the FHA and other New Deal agencies restructured the private housing market -- the instrument was the long-term mortgage -- fundamentally altered the conditions under which Americans purchased and owned their homes. "Only after the federal government changed the rules of home financing did Americans begin settling in after a century of unabated movement. This process took less than two decades and possibly less than ten years."

Source: Ronald Tobey et al, "Moving Out and Settling In: Residential Mobility, Home Owning, and the Public Enframing of Citizenship, 1921-1950 American Historical Review 95, no. 5 December 1990, page 1396; "More Householders Than Ever Own Their Homes According to Census 2000" US Census news release.

Today, two-thirds (66.2%) of America's families own their homes and, among those who do not, a majority rank home ownership as the highest priority. For most families, their home is their single largest investment, and -- equally significant -- an important source of security.

With the cost of a home is fully paid, the owners live in it virtually rent-free, able to pass it on to their children.

Editorial note by Charlie Belden (Note: my good friend, CB, worked for years in urban planning in the San Francisco Bay area, and thus brings an expert's perspective to this subject.) Given the 20 or 30 year mortgage, I doubt most original home owners lived in their homes "rent free" for very long. Mortgage loans required a certain minimum track record of employment, say 10 years, and a minimum down payment of about 20%. So the borrower is probably in their early to mid 30s. With a retirement age of 65, and a life expectency of say 67 years, the "owner" will only live "rent free" for 5 to 7 years out of the 35 to 37 years of home ownership". The other expense of home ownership is maintenance costs. Post WW II "Levittown tract homes" were built with composite shingles with a 15 or 20 year "life", linoleum and other synthetic sheet goods products for kitchen flooring wore enough to warrant replacement in 10 to 15 years, carpeting that needed replacing in 10 years, etc. While it's true that "owners" were not paying rent, they were paying an amount equivalent to rent, albeit a fixed and predictable amount rather than a changing amount over time subject to the supply and demand of "rentals".

And, unlike rental costs that may increase each year, ownership makes housing expenses predictable.

CB: You overlooked property taxes. In areas of the country were property values rose well above the national average - post WW II California for example - property taxes could add significantly to the TOTAL monthly cost of home ownership. That fact lead to California's Proposition 13, which capped the rate of property tax increases to 1 1/2% per year. That idea spread to other areas of the country experiencing similar property value increases.

It also confers certain legal rights. Renters can be evicted from an apartment or a house in ten days if they do not pay the rent. For homeowners, in the event of foreclosure, it takes between six and eighteen months to work its way through the system.

In this sense, homes act as a kind of insurance that gives those who are vulnerable a chance to get back on their feet.

CB: Though not directly related to your subject until the mid to late 1980s, home appreciation was another important benefit of home ownership. Not only were your monthly housing costs somewhat fixed, but you were building equity in your home (equity = value of the home minus the amount owed on the mortgage). When "equity loans" became available, this source of "Money now - pay it back over time" money became available for purchasing goods and services, including woodworking tools and machines. Another economic benefit of "owning" a home was the Federal Income Tax Benefit. About 25% of the monthly mortgage payment was tax deductible. That meant that your "averaged over a tax year" monthly cost of home ownership was reduced by about 25% of the mortgage payment. This is one of the few government "subsidies" middle class Americans get, unlike the subsidies the government gives to large corporations.

However, in addition to these and other tangible benefits, home ownership confers tremendous psychological advantages. Most Americans say that owning a home helps them make a better life for their children and lends stability to a marriage.

Home ownership gives people freedom about such simple decisions about whether to plant a garden or own a pet.

And homes represent an asset that can be borrowed against to finance an education, start a business, or cushions a family from economic crisis.

Examples from studies in the social sciences which mention woodworking as a leisure time activity:

With the increase in home ownership and the availability of home tools, woodworking has gained in popularity ..."

A person who enjoys woodworking may want to own the same kinds of tools as a ... they will own their own homes, so home ownership can also be related. ..."

... frequently had space for relatively new male hobbies such as woodworking. ...
The nationalistic vision of Americans invested in home- ownership ..."

Home ownership is a priority and a status symbol, and you could do well with ...
leisure-time hobbies such as woodworking, furniture refinishing, crafts, ..."

1. Money:

Not a factor exclusive to people who own their own homes, except perhaps when the home is fully owned. (See below.) But money is a factor in woodworking, to the extent that tools, especially high quality power tools, can be expensive. And investments don't end with purchase; woodworkers need to maintain their tools, including repairing them. Moreover, the costs of wood for projects must be factored in. On the other hand, the woodworking fraternity is not a "rich man's" club. It's just that money needs to be factored in.

Historically -- as noted below -- it has not always been this way. As the graph below shows dramatically, since 1929, except for a few bumps, disposable incomes have enjoyed a remarkable upward trajectory.

2. Time:

Also not a factor exclusive to people who own their own homes, but home ownership creates conditions which allow for greater use of leisure time.

As a factor in this equation of home ownership and amateur woodworking, Time comes out looking very similar to Money.

Without Leisure Time to dedicate woodworking -- as shown below, the workweek of the nineteenth century was a bleak 60 to 70 hours, seven days a week -- the amateur woodworking movement would not have materialized.

In my search for materials on home ownership and amateur woodworking, I found numerous sources that echo these sentiments:

R J Havighurst, "Leisure and Lifestyle", American Journal of Sociology 58 September 1957, pages 152-162;

R J Havighurst, "The Leisure Activities of the Middle-Aged", American Journal of Sociology, 1957, page 154;

Russell Rowe Dynes, Social problems; Dissensus and Deviation in an Industrial Society New York: Oxford University Press, 1964, page 288;

Donald W.Jugenheimer and Gordon E. White, Basic Advertising , 1991, page 29.

John F. Bauman, Roger Biles, Kristin M. Szylvian, From Tenements to the Taylor Homes: In Search of an Urban Housing Policy in ... College Park, PA: Philadelphia: Pennsylvania State Press, 2000;

Margaret Grab, City of American Dreams: A History of Home Ownership and Housing Reform Chicago: University of Chicago Press, 2005, Footnote 1,2, and 3 on page 209;

Michell Miller-Adams, Owning Up: Poverty, Assets, and the American Dream Washington, DC: Brookings Institution, 2002, page 23;

3. Space:

As noted below, home ownership has provided larger, more spacious living quarters, including basements and garages. When owning a home, woodworkers can make needed changes in their work spaces.

1. Money:

Sources: Paul Douglas, Real Wages in the United States, 1890-1926. Boston: Houghton, 1930.

Money historically, disposable income, is on an upward trajectory

Over the 40-year period between 1929 and 1967, the graph below -- after a low in 1933 -- shows a steady growth rate in average hourly rate of pay: The chart below correlates with the graphic depiction of the upward trajectory of disposable income:

2. Time= hours of work

Source: Robert Whaples, "Hours of Work in U.S. History" Robert Whaples' web-based article on hours of work

-- For this portion of the entry on home ownership, I have adapted material from Whaples' article on the history of economics website, Wake Forest University. Robert is a colleague from my academic days.

History of the Length of the Workweek:

>

In the 1800s, many Americans worked seventy hours or more per week. Today, the workweek's length has decreased to a typical 40 hours per week. considerably. The reduction in length of the workweek in America emerged from a political, "shorter-hours movement," and obviously a boon to an extended leisure-time activities.

First, simply measuring the length of the workweek is difficult task. Why? Because it is a topic full of such ambiguities. What constitutes work? Who is to be considered a worker?

Even more troublesome is estimating the length of the historical workweek.

Estimating the length of the typical workweek in America before the mid-1800s is problematic. In pre-Civil War America most Americans engaged in agriculture. Moreover, because most were "self-employed", where -- like self-employed workers in any field -- keeping records of the time spent working was uncommon.

The Colonial Era Into the Nineteenth Century

Throughout the colonial period and into the nineteenth century, many observers believe that most American workers followed an age-old practice, that is, working from "first light to dark". (Whaples notes variations among observers on this understanding.)

Manufacturing Hours before 1890

The most reliable estimates of the workweek come from manufacturing, since most employers required that manufacturing workers remain at work during precisely specified hours. But it wasn't until 1880 that the Census of Manufactures began to collect this information.

Much of what we know about work hours in the nineteenth century comes from two surveys: The first survey, part of the Census of 1880 -- known as the Weeks Report -- is the study conducted by Joseph Weeks.

The second -- prepared in 1893 by Commissioner of Labor Carroll D. Wright for the Senate Committee on Finance -- is commonly called the Aldrich Report.

While each of these sources is acknowledged as flawed -- because of sample selection bias and unrepresentative regional and industrial coverage -- Whaples argues that it "seems reasonable to accept two important conclusions based on these data": that -- by modern standards -- in manufacturing in the 1800s, the typical workweek was very long and -- between 1830 and 1890 -- that it declined significantly.

Hours of Work during the Twentieth Century

For Whaples, because of lack of consensus in what define a "workweek" and what are "data sources", a consistent series of workweek estimates covering the entire twentieth century does not exist.

Regardless of differences among the sources, what we can detect is -- during the first third of the century -- a pattern of weekly hours falling considerably, but thereafter much more slowly.

In particular, before and after World War I (1916-1918) hours fell markedly. Although there were six workdays per week, by 1919, the eight-hour day was won.

Hours again fell durnig the Great Depression, especially in manufacturing, but -- because of America's World War II mobilization then rebounded (and peaked).

In post-WW II America, the workweek's length stabilized around forty hours.

Broader Trend Toward More Leisure Time

In 1880 a typical male household head had very little leisure time -- only about 1.8 hours per day over the course of a year.

However, between 1880 and 1995, the amount of work per day fell nearly in half, allowing leisure time to more than triple.

Because of the decline in the length of the workweek and the declining portion of a lifetime that is spent in paid work (due largely to lengthening periods of education and retirement) the fraction of the typical American's lifetime devoted to work has become remarkably small.

Sources: Marion Cotter Cahill, Shorter Hours: A Study of the Movement since the Civil War. New York: Columbia University Press, 1932; Mary T.Coleman and John Pencavel, "Changes in Work Hours of Male Employees, 1940-1988." Industrial and Labor Relations Review 46, no. 2 (1993a): 262-283; Theresa Greis, "The Decline of Annual Hours Worked in the United States, since 1947", Manpower and Human Resources Studies, no. 10, Wharton School, University of Pennsylvania, 1984; Ethel Jones, "New Estimates of Hours of Work per Week and Hourly Earnings, 1900-1957." Review of Economics and Statistics 45, no. 4 (1963): 374-385; John Owen, "Workweeks and Leisure: An Analysis of Trends, 1948-1975," Monthly Labor Review 99 (1976) John Owen, "Work-time Reduction in the United States and Western Europe." Monthly Labor Review 111 (1988); Terence Powderly, Thirty Years of Labor, 1859-1889. Columbus: Excelsior, 1890; David Roediger and Philip Foner. Our Own Time: A History of American Labor and the Working Day. New York: Verso, 1989; Juliet B.Schor, The Overworked American: The Unexpected Decline in Leisure. New York: Basic Books, 1992; Ronnie Steinberg, Wages and Hours: Labor and Reform in Twentieth-Century America. New Brunswick, NJ: Rutgers University Press, 1982; United States, Department of Interior, Census Office. Report on the Statistics of Wages in Manufacturing Industries, by Joseph Weeks, 1880 Census, Vol. 20. Washington: GPO, 1883; Norman Ware, The Labor Movement in the United States, 1860-1895. New York: Appleton, 1929; Robert Whaples, "Winning the Eight-Hour Day, 1909-1919." Journal of Economic History 50, no. 2 (1990b): 393-406.

3. Space = square footage of typical residence

Space" -- i.e., the space required in a basement in a home or in a garage, is virtually essential. And that needed space comes at a price: the almost absolute need of home ownership.

Just running through a few space-oriented issues demonstrates this. No only do you need space for the workbench, the power tools, wood storage, etc., you need (especially since the 1950s) the prerogative of making appropriate revisions to the structure of the building -- like building walls, sealing off open areas, and/or changing the electrical service.

Ex: Dewalt introduced its domesticated radial arm saw in the post-World War II era, late 1940s. (See glossary entry on history the radial arm saw.)

To operate that power tool at its ideal capacity, you need electrical outlets wired for 220 volt service. If your a woodworker who is also a renter, I don't think that such revisions to the wiring would be an option. Nor, in a rental, would devising ways and carrying out the plans for space for woodworking.

The Yale economist, Robert J Shiller, notes that data compiled by the US Census Bureau shows that the average size for "new" houses in the 1940s was 1100 square feet, giving approximately 300 square feet of space per family member. Compared to today -- 2150 square feet, or 800 square feet per family member -- the Depression era included crowded living quarters. In Diamond and Moezzi's graph above, we see the upward incline in the square-footage of new houses between 1940 and 2000.

Summary of Clair Brown, American Standards of Living, 1918-1988, New York: Harper Collins, 1994

Housing Before 1918

--

not yet done-- ? need to find where these stats are tabulated

Housing 1918 "Consuming the Products of Mechanization, 1918-40"

Substantial changes in housing occurred between 1918 and 1935. By 1918, says Clair Brown (1994), the rate of Home Ownership rose rapidly across classes of Americans: from 19% for laborer families to 36% for salaried families.

Home Ownership had a significant impact: Home Ownership meant better housing as well as more control and security over your personal livelihood. Living in your own home -- rather than renting -- meant more space, including with larger rooms, and usually a basement.

Housing, according to Brown, was an important marker of class status, both by the quality of housing and the location.

Including both renters and owners, salaried -- that is, fixed wage -- families were 25% more likely than laborer families to live in a house than in an apartment.

Housing 1935 Living in the Midst of Depression

The Great Depression caused a major decline in construction of new homes. A rural-to-urban migration was underway, a statistic that meant a drop in the proportion of families living in houses.

Why?

To reflect the recency of this population movement -- the rural-to-urban migration -- for economic reasons, more families who had recently moved to urban centers were forced to lived in rented apartments rather than in houses.

Between 1918 to 1940, nonetheless, the rate of home ownership continued steadily to increase.

Moreover, by 1935, homes had become more comfortable, including the addition of plumbing and bathroom facilities, improved heating, more widespread use of electric lighting, telephone service, a mechanical refrigerator, and a washing machine.better furnishings, and more rooms per person. Over 90% of white families' homes had full bathrooms, electrical service; and most, over 80%, had hot water heaters.

A survey conducted in 1934 described "the typical American home" as a single-family dwelling, about 19 years old, of wood or frame construction containing five rooms. It is equipped with either bathtub or shower, indoor water-closet, uses electricity for lighting, and gas for cooking. For the country as a whole, reliance is placed predominantly upon heating stoves for heat, although over 31% of all dwelling units use warm-air furnaces. Coal is the principal fuel used.

Sources: "Housing Conditions in American Cities", Monthly Labor Review 40 (March 1935), page 724, as cited by Clair Brown, page 178; Eric H Monkkonen, America Becomes Urban : the Development of U.S. Cities and Towns, 1780-1980 Berkeley : University of California Press, 1988.; Stanley L. Engerman, "Up or out: Social and Geographic Mobility in the United States", Journal of Interdisciplinary History 5 1975, pages 469-489.

Creation of Federal Housing Act:White House Conference on Home Building and Home Ownership 1931

The text in the box below is a "do-for", until I have time to sort out the large set of publications on the Conference: if you wish to conduct some research yourself, click here

The Conference's Mission

TO FIND A WAY TO MAKE IT EASIER for the average man or woman to obtain a home that, in the phrase of the New York World, is the object of the White House Conference on home-building and home ownership recently called by President Hoover.

Walt Durbahn's Invitation

Charge to the Conference Headed by Secretary of Commerce, Robert P Lamont, WHCHBHO Attended by Over 3,700 Delegates, the White House Conference on Home-Buildidng and Home-Ownership will deal with the problems of home-planning, home-building and home-financing, but will recommend no legislation. Government officials and representatives of nineteen national organizations will comprise the membership. Judging by the amount of editorial comment, the entire country was keenly interested in this new project of the President Hoover. "Particular attention is to be given to high charges attending second mortgages and to cost of homes in an effort to work out an easier financial situation, something akin perhaps to that behind the automobile industry," notes Carlisle Bargeron, of the Washington Post. By this conference, as the President himself tells us, he hopes to "inspire better organization and remove influences which seriously limit the spread of home ownership, both town and country." Then he tells us more about his plan: "The conference will be organized by a planning committee comprised of representatives of the leading national groups interested in this field, under the chairmanship of Secretary Lamont. This planning committee will in turn set up nation-wide subcommittees to determine the facts and to study the different phases of the question. "One of the important questions is finance. The present depression has given emphasis to the fact that the credit system in home-building is not as soundly organized as other branches of credit. In order to enable the purchase of homes on what amounts to the instalment plan, it is necessary to place first and, often enough, second mortgages. Second mortgages, have, if we take into account commissions, discounts, and other charges, risen in rates in many cities to the equivalent of 20 or 25 per cent. per annum, all of which not only stifles home ownership, but has added to the present depression by increasing unemployment in the trades involved. "The finance question, however, is only one of many. The expansion and betterment of homes in its bearing upon comfort, increasing standards of living, and economic and social stability, is of outstanding importance." "THE conference deserves the utmost support," declares the Chicago Journal of Commerce, and the Charleston Mail agrees that "the matter is one of national importance." The Cleveland Plain Dealer sums up: "It is an economic question, but it is far more than that. It is a question of strengthening the social foundations of a State." Source: The Literary Digest August 23, 1930, page ? Addendum: -- The significance of this conference is reflfected, I believe, with the following list of pubkications that emanated out of it -- I will be tracking the impact of this event in more detail later -- 9-12-08 PUBLICATIONS OF THE PRESIDENT'S CONFERENCE ON HOME BUILDING AND HOME OWNERSHIP FINAL REPORTS OF COMMITTEES JOHN M. GRIES AND JAMES FORD, General Editors; DAN H. WHEELER AND BLANCHE HALBERT, Associate Editors I. Planning for Residential Districts II. Home Finance and Taxation III. Slums, Large-Scale Housing and Decentralization IV. Home Ownership, Income and Types of Dwellings V. House Design, Construction and Equipment VI. Negro Housing VII. Farm and Village Housing VIII. Housing and the Community Home Repair and Remodeling IX. Household Management and Kitchens X. Homemaking, Home Furnishing and Information Services XI. Housing Objectives and Programs

The National Housing Act of 1934 created the Federal Housing Administration (FHA) and made home financing (FHA mortgages) more readily available to large segments of the employed population. In 1934, the federal Public Works Administration began building public housing.

The impact of the FHA was dramatic. According to Alexander Radomski, Assistant Program Director for the (National Conference on Family Life, Washington, D. C., May 5-8, 1948 ) In April, 1947, the total number of dwelling places in the United States was 41,625,000, ranging all the way from twenty-room mansions down through one-room shacks. Of that number, 55 percent were owned by the occupants, a sharp jump over the 40 percent of 1940. (This trend is the reverse of a gradual decline in home ownership during the previous fifty years.)

Source: "Selected Family Facts" (National Conference on Family Life) In Marriage and Family Living 10 no 3 August 1948, page 62. As the gist of the newspaper article below notes, the FHA assisted existing homeowners by helping them finance improvements in their homes. Using 20-year repayment periods it also helped first-time home owner families acquire their own homes.

I checked the public's response to this legislation by conducting a search in the huge Newspaperarchive.com, a database of American and Canadian newspapers. Using the search string, " 'ownership' AND 'national housing act' " yielded of 300 "hits". I randomly selected one, reprinted below

How [FHA] Home Building And Repair Plan Works Washington May 15 (AP) The Congressional machine took turn today on a key designed to unlock financial doors to the would-be home owner or modernizer. As the Senate banking committee opened work on the big housing bill introduced yesterday at President Roosevelt's request officials disclosed plans to push the home renovating campaign. The efforts to spur the building of new houses will follow close after. A big government publicity campaign is planned to awaken the homeowner to the possibility of getting his home remodeled or reconditioned easy payments. Here's the way it will work: John Smith wants a new bathroom, to repair the roof, to build an additional wing. If he can do this within $2000, he is within the plan. He goes to a bank, a building and loan association or some other institution and lays out his program. The institution looks up Mr. Smith, finds he has a steady job and pays his bills, and decides to put up the whole $2000. The bank charges him five percent and divides the payments on a monthly basis over a five-year period, the limit under the government's plan. With interest, this would amount to $40 a month the first year, and less as the $2000 was reduced and the interest charge declined. In the meantime, the lender of the money has informed the government's proposed $200,000,000 insurance corporation that it wishes the loan guaranteed , and the government agrees to pay the lender up to 20 percent of the loan. Should Mr. Smith fall down on his payments after turning back $1000, the would pay back the lender 20 percent of the second $1,000 and and the lender would lose the other $800. Careful investigation of those procuring loans is planned and since many probably will be well below the $2000 maximum. officials believe the total defaults will be small. The expected effect of the guarantee will be to make lenders more will to lend, since they have little fear of a loss running as high as 20 percent. In the case of projected new homes, if Mr. Smith has $2000, the government plans backing for a loan of $3000 more. His period of repayment could run up to 20 years. The government lends no money, but would set up a huge insurance fund from payments made by the borrower. It would fully insure the lender up to 80 percent of the value of the house -- or $8000 in this case. The interest to the lender would run about 5 percent, while an additional one percent would go to the insurance fund. Source: Syracuse Herald May 15, 1934, page 19

Impact of the FHA

Residential mobility -- a malady caused by the constant need of renting -- declined slowly over a century, i.e., 1850-1950,

...[I]n both rural and urban settings to a more modest and constant rate of approximately 20 percent a year after World War II". What put the brakes on residential mobility was neither the Great Depression nor the shock of World War II but rather the housing policies of President Franklin Roosevelt's New Deal state. More specifically, the Federal Housing Administration (FHA) and other New Deal agencies restructured the private housing market in a way that fundamentally altered the conditions under which Americans purchased and owned their homes. The long-term mortgage was the instrument that finally restrained America's historic mobility.... > Source: Ronald Tobey et al, "Moving Out and Settling In: Residential Mobility, Home Owning, and the Public Enframing of Citizenship, 1921-1950 American Historical Review 95, no. 5 December 1990, page 1395.

Housing 1950: The Boom in Home Ownership--Post-WW-II-housing_boom

Since the 1920s, says Clair Brown (1994: 210, and 243) the increase of the family's income out-stripped the rate of housing construction.

During the Great Depression, while the rate of urban home ownership was around 55%, the chaotic financial markets of the 1930s discouraged potential home buyers.

Home buying expanded rapidly during the 1940s, however; many single-family rental units, subject to Federal rent control laws during the war, were sold to occupants.

During the 1940s, if we look at data about home ownership in five year intervals, we see significant progress:

in 1940, 41% of homes in urban areas were owner-occupied;
by 1945. 50% were owner-occupied;
by 1950, two-thirds of urban housing was owner-occupied.

(The 1945 figures are significant: while the federal government built temporary war housing, by wartime regulations, construction of new housing was severely constrained.)

In 1950, the dam burst, and the resulting housing boom in the 1950s was sustained by loans backed by the federal government: the Veterans' Administration and FHA mortgages, or by investing private wartime savings.

Studies by the FHA showed that home-ownership was cheaper than renting the equivalent living space.

However, other motives for home-ownership are obvious: control over your own space, a larger, more comfortable house with modern fixtures, a yard, and for the amateur woodworker including creating areas for home woodworking shops environment as well as have.

(Urban renters tended to live in apartments rather than houses. Where creating space for woodworking is constrianed. Articles in woodworking magazines address theis issue for showing renters how to create woodworking areas in closets.)

The home ownership rate increased by 80%, for wage earners, by around 50% for blacks and laborers, and by 30%. for salaried families. The potential demand for home ownership, however, was still large in all classes.

The pent-up demand for housing was reflected to the fact that expenditures (constant dollars) on housing and utilities rose dramatically less than total expenditures between 1935 and 1950-52.

Families living in the suburbs were most likely to own their home; those in large cities were Least likely to do so. Differences in home ownership across classes were greatest in large cities, where salaried ownership was almost twice laborer ownership. and least in small cities, where salaried ownership was only one-fourth higher than laborer owner­ship. This partially reflects the much newer housing in the suburbs.

Housing 1973

The postwar housing boom, which resulted in the burgeoning development of the suburbs, had been largely financed by government-sponsored mortgages.

Thanks to the FHA, the American Dream of owning one's home was rapidly becoming a reality for the working class; by 1973, 53% of laborer, 65% of wage-earner, and 63% of senior families were homeowners, as were 65% of all households nationwide.

Salaried families also greatly ex­panded their home ownership, so that four out of five were homeowners (see table 6.8A). Although black laborer families had made great advan­ces in buying homes, home ownership still distinguished white from black working-class families.

By 1973. dramatic economic growth fueled by the war on poverty and the Vietnam War magnified the trends of expanded spending for social life and growth of home ownership.

Housing 1988

Sixteen percent of the family budgets went on housing.

During the 1980s, home prices rose more rapidly than general price levels, meaning that the investment of a home became a source of capital gain for families.

In 1988, the 66%) of senior homeowners owned their homes.

Those who owned their home reaped a capital gain, while those not homeowners found it more difficult to buy their first house.

Housing expenditures and quality of housing vary by one's age as well as by class, with middle-aged and older people living in better houses that cost less to carry than the houses for younger people.

Conclusion

So, from the woodworker's perspective, home ownership -- especially after World War II, fueled by the National Housing Act -- is an equation comprising three elements: money, time, space.

Money, because, since 1930, with the steady growth of personal income, disposable income, has been on an upward trajectory.

Time, specifically leisure time, acquired over a century of struggle in reducing the workweek.

Space, because buying a house is more economical than renting, because -- unlike renters -- in your own home you have more room, where you can adapt your own space to fit your needs.

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