Trends in Housing During the War and 1 Postwar Periods 1 The War Years LACK of adequate residential construction for more than a decade lies at the root of current housing shortages. During wartime, housing needs became critical in many parts of the country as millions of workers migrated to areas where war industries were expanding. In addition, residential building was retarded by the diversion of construction materials to meet the needs of total war. It seems appropriate, therefore, to review the wartime pattern in new dwellings started in nonfarm areas throughout the United States during World War II, and to indicate the trend in housing for succeeding months of the postwar period.2 The rise in housing construction (table 1) which followed the depression years in the 1930's continued after the outbreak of war in Europe, as a result of the increased demand for emergency housing in defense areas and easier financing through the Federal Housing Administration, together with generally improved economic conditions. The peak of wartime building was reached in 1941, when more than 700,000 new units were started.3 In September 1941, builders of moderate-priced dwellings in critical areas were assisted in obtaining materials in short supply by the issuance of preference ratings under regulations set up by the Office of Production Management, later the War Production Board.* A reversal in trend was evident, however, during the last half of the year 1941, as the number of new dwelling units declined from a high point of 223,000 for the second quarter. A further decline in residential building occurred during the two succeeding years, partly as a result of the restrictive legislation enacted in the spring of 1942, and partly because of the scarcity of Prepared in the Bureau's Division of Construction and Public Employment by Mary Frost Jessup. This article, covering the period from 1944 through the first 6 months of 1946, is part of a forthcoming bulletin on the construction industry. For current data and developments on housing, see p. 118 this issue of the Monthly Labor Review. 'This report is based on estimates of the number of new residential units started, their valuations, and source of funds, in nonfarm areas throughout the United States. The tabulations show these data by popu lation groups and by geographic regions. The number of new dwellings in urban and rural nonfarm areas, which are financed by private funds and by public funds, and 1-family, 2-family, and multifamily structures are also shown. ⚫ Current estimates of residential construction are derived from building-permit reports made to the Bureau of Labor Statistics and from field investigation into the start and completion rate of building in a sample of both permit- and nonpermit-issuing places. The Bureau began the regular collection of buildingpermit reports from officials in 196 large cities in 1920. By 1944 collection had been expanded to include more than 2,700 cities and 1,400 nonurban incorporated places. During the last 2 years, the coverage has been greatly extended to include between 4,000 and 5,000 places. Applications from private builders were approved only if the sales price was $6,000 or less and the monthly rental $50 or less. 725607-47 11 labor and of building materials reserved for wartime construction of posts, camps, and war plants. In April 1942, Conservation Order L-41, issued by WPB, prohibited, without special authorization, all nonessential residential construction except that estimated to cost less than $500. TABLE 1.-New dwelling units started in nonfarm areas, 1910–45 1 1 Data for 1920-29 are from National Bureau of Economic Research; data for 1910-19 and 1930-45, from Bureau of Labor Statistics. No break-downs are available for 1910-19. Urban and rural nonfarm classifications for years 1920-29 are based on 1930 census; for years 1930-43, on 1940 census. 3 Includes 1- and 2-family dwellings with stores. 4 Includes multifamily dwellings with stores. Estimates from 1910 through 1944 represent number of units started. In 1945, figures represent units scheduled to be started and are based upon building permits issued and Federal construction contracts awarded. The 1945 figures are not adjusted for lapsed building permits and time lag between issuance of permits and start of construction as in table 3. Such adjustments were not necessary in previous years, when lag and lapse in building permits were not significant. An important result of restrictions on building and of the increasing shortage of wartime housing was the shift from tenant occupancy to home ownership. The 15-percent rise in the proportion of owneroccupied units over the 42-year period from April 1940 to October 1944 was greater than for any other comparable period for which data are available." The low point in construction of new dwelling units for the war years was reached in 1944 (table 2), as new public construction declined to a negligible factor, and privately financed dwellings decreased to 139,000 for the year with only 7,000 new units scheduled to start in December. The lowest rate of housing activity, as measured by building permits and Federal contract awards, occurred during the first 2 months of 1945. The situation was alleviated somewhat by the carrying out of the H-2 War Housing Program under the National Housing Agency and expansion of the H-3 Program which started at the end of 1944. The H-2 Program permitted additional construction of dwelling units, in critical areas, up to $8,000 under certain conditions of hardship; the H-3 program applied to individual cases of hardship anywhere, without cost limitations. TABLE 2.-Number of new dwelling units started1 in nonfarm areas and percent of change, by source of funds and type of structure, 1939–45 1945 1 1944. 1943. 1942. 1941. 1940. 1939. 246, 700 +45 7 17, 943-41.3 228, 757 +64.9 202, 263 +76.6 1 In 1945 figures represent units scheduled to be started and are based upon building permits issued and Federal construction contracts awarded. They are not adjusted for lapsed building permits and time lag between issuance of permits and start of construction, as in table 3. Such adjustment was not necessary in previous years, when lag and lapse in building permits were not significant. * Includes 1- and 2-family dwellings with stores. Includes multifamily dwellings with stores. Data not available prior to 1940. The cessation of hostilities in August 1945, and consequent lifting of wartime restrictions in the construction industry the following October, resulted in an unprecedented increase in home building. Contrary to the usual seasonal slump during the fall and winter months, the total number of nonfarm dwelling units increased 40 percent See Effect of Wartime Housing Shortages on Home Ownership, in Monthly Labor Review, April 1946 (pp. 560, 561). * Nonfarm areas in the United States consist of all urban and rural nonfarm places. The urban areas include all incorporated places of 2,500 or more population in 1940 and, in addition, a small number of unincorporated civil divisions. The rural nonfarm construction covers nonagricultural building in unin· corporated places and building in incorporated places of less than 2,500 population. during the fourth quarter of 1945, from 65,500 to 91,500. The greatest monthly increase for 1945 occurred between September and October, when the number of new housing units rose from 21,800 to 30,000, or 38 percent. Trends in 1946 THE VETERANS' HOUSING PROGRAM After the removal of wartime restrictions on residential construction in the fall of 1945, it became evident that new measures would be necessary on the part of the Government, not only to provide moderatecost housing, but also to make it available to returning veterans and their families. The reconversion period on the housing front, therefore, has centered around the needs of veterans. The Civilian Production Administration announced its Reconversion Housing Program in December 1945, to take effect on January 15, 1946. Preference ratings were set up for certain building materials in short supply which were made available to veterans and to builders, giving precedence to veterans in the construction of moderate-priced houses and apartments. This action was followed by the coordination of all housing functions under an administrator who was charged with the preparation of plans designed to meet the housing shortage, which grew even more critical as veterans returned in increasing numbers. In his report to the President of February 7, 1946, the Housing Expediter pointed out that in October 1945, 1.2 million families were living doubled up with other families. It was estimated that there would be an additional 2.9 million married veterans who would need homes by December 1946, and over half a million nonveterans who would marry during the course of the year, making a total of 3.5 million families who would be looking for houses or apartments by the end of 1946; about 1.1 million new families would need homes in 1947. Existing vacancies, and new vacancies resulting from deaths and dissolutions of families, were estimated at 945,000 units for 1946 and at 430,000 for the next year. By the end of 1946, therefore, more than 2.5 million families would need homes; and by the end of 1947, according to these calculations, over 3 million families more than the number housed in October 1945, would require additional dwelling units. The Veterans' Emergency Housing Program, as announced by the President on February 8, 1946, called for a total of 2.7 million new nonfarm homes by the end of 1947. During 1946, 1.2 million new nonfarm dwellings were to be started, according to the blueprints. These units would consist primarily of new conventional type homes and permanent prefabricated houses. They would also include, 1 Data taken from Veterans' Emergency Housing Program; Report to the President from Wilson W. Wyatt, Housing Expediter, February 7, 1946 (National Housing Agency, Washington 1946). however, units provided by conversion of existing dwellings, as well as some temporary units and trailers which were to be used only to meet emergency conditions in 1946. Preference was to be given to veterans in both rentals and purchases, except for nonveteran hardship cases. It is interesting to compare these estimates with the foregoing figures on new dwelling units started in nonfarm areas during the past few years, and with the peak year of 1925, when 937,000 new dwelling units were started. FIRST 6 MONTHS OF 1946 8 The number of new permanent dwelling units started in nonfarm areas during the first 6 months of 1946 increased more rapidly than ever before. Housing units started for this period (377,200) were two-thirds greater in number (table 3) than for all of 1945 (225,300). TABLE 3.-Estimated number of new urban and rural nonfarm dwelling units started, by month and source of funds, January 1945-June 1946 i 1 This represents a revision of previous Bureau of Labor Statistics estimates of nonfarm dwelling units started since January 1945 to account for lapsed building permits and for the lag between the actual start of construction and the issuance of building permits. No adjustment for earlier periods is contemplated at present because it is believed these influences were negligible prior to 1945. New family dwelling units discussed here include permanent privately financed conventional and prefabricated units and publicly financed family dwellings. The publicly financed units include some of a temporary nature. Thousands of conversions, trailers, and dormitory units, included in the National Housing Agency's estimates of units started, completed, and under construction in 1946, are excluded from the figures presented in this article. Before 1945, building permits represented construction work about to be undertaken in the period specified. Beginning in that year, however, there has been a larger incidence of permit lapses and greater lag, than formerly, between permit issuance and the start of construction. Provision has been made for lag and lapse in permits in all months of 1945 and in 1946, except where data are shown by geographic and other detailed break-downs. In such cases, it should be cautioned that 1945 and 1946 data are for dwelling units scheduled to be started, and are not necessarily under construction, the lag in some instances being of several months' duration. |