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The estimated number of new private homes completed also increased steadily during the first half of 1946, from 19,000 in January to 35,000 in June. The total number of units completed during this period was 46 percent of those started. Completion figures for the first few months of 1946 represented, for the most part, dwelling units begun in 1945. During May and June, however, a large proportion of the completed structures were houses started in the current year.
The number of private dwelling units started, completed, and under construction in nonfarm areas during the first half of 1946, by months, is shown in the following tabulation.
An even greater increase occurred in the estimated construction cost of nonfarm family units to be started, which reached 1.7 billion dollars during the first 6 months of 1946, or nearly twice the 1945 total of 0.9 billion dollars.
Private and Public Housing During War and Postwar Periods
PRIVATELY FINANCED DWELLINGS
During most of the war years, housing units privately financed comprised about nine-tenths of all residential building, and nearly 3 million were started since 1939.9 However, as new residential construction declined during the period of the emergency, the percentage decrease from year to year in the number of dwellings financed privately was greater than that for the total number of new units. At first, this was the result of the upward trend in public housing in critical areas, constructed to meet the needs of the war emergency. Later, from 1942 to 1944, private construction was retarded by the general restrictions on building. In 1945, however, there was a 50percent rise over the previous year in new private housing, and more than 200,000 units were started. The upward trend was accelerated during the first 6 months of 1946 as 335,000 private dwellings were started a 62-percent advance over the number begun during the whole of 1945.
• From 1939 through June 1946, there were approximately 2,773,000 new privately financed dwelling units started.
Privately constructed 1-family units remained the most important type of new housing throughout the war period. Over 2 million were scheduled from 1940 through the first 6 months of 1946.
During the first part of the war in Europe (1939 to 1941) private 1-family dwelling units comprised about three-fourths of the total number of new nonfarm dwellings. Over half a million privately financed single units were started in 1941 alone. In 1942 and 1943, as a result of stringent restrictions on nonessential construction and on housing selling at over $6,000, the number of 1-family dwellings declined more sharply than other types of housing. In 1942, when public construction was at its height, the number of 1-family private homes declined more than half. The following year, there was a decrease of 46 percent, and private 1-family homes represented only about two-fifths of the total number of nonfarm dwelling units (table 2).
The effect of the lifting of restrictions on building immediately following the end of the war 10 is evident from the fact that private builders were issued permits for 118,000 new 1-family dwellings from August through December 1945, compared with a total of 115,000 new dwellings of this type started during the entire previous year of 1944.
The rise in number of 1-family private homes to be started continued during the first quarter of 1946, as priorities on building materials were again instituted on January 15 as an aid to the Veterans' Emergency Housing Program. An increase of three-fourths in new 1-family dwellings to be started occurred between February and March 1946, the respective figures being 38,700 and 68,500. On March 26, restrictions on nonessential building similar to the wartime limitations of Conservation Order L-41 were issued by the Civilian Production Administration. The new regulations prohibited nonessential building and limited residential construction to $400, except for dwellings authorized by NHA through priorities. Such emergency housing was to be reserved for veterans for a 60-day period. The limitation on the
In September 1945, schedules I and II to WPB Order P-55-C were revoked and WPB announced that its other wartime controls on construction, including L-41, would be removed on October 15.
selling price of residential construction was raised to $10,000 per onefamily unit, with a rental ceiling of $80 or less per month, as compared with the previous figures in 1942 of $6,000 or not over $50 a month rental. The effectiveness of this program is evident from the fact that figures for private 1-family dwelling units to be started in the second quarter of 1946 showed a one-fourth increase over the first quarter of the year.
The average estimated cost of privately constructed 1-family units has increased markedly since the conclusion of the European war.11 From April to September 1945, the average construction cost of private 1-family dwellings, excluding land, rose from $3,996 to $4,603, or 15 percent (table 4). From September to October, when building restrictions were lifted, the average advanced another 14 percent to $5,244, and remained above $5,000 through July 1946. It is interesting to note that the average cost of private homes reached two high points of $5,574 and $5,788, respectively, in December 1945 and March 1946, just before limitation orders on the selling price of homes were put into effect.
TABLE 4.-Change in estimated construction cost of new, privately financed 1-family dwellings in nonfarm areas, and events affecting 'housing, January 1945–July 1946 1
1 These figures are based upon builders' estimates of construction cost, exclusive of land and improvements. They do not show change in cost of erecting identical buildings, but reflect the change in estimated costs of all buildings to be erected. Estimates of construction costs should not be confused with market or selling price.
2 Schedules I and II to WPB Order P-55-C imposed materials limitations and limitations on building sizes of approved housing construction. WPB Order L-41 limited nonessential residential building construction to $200 with certain exceptions, unless authorization for priorities were obtained. CPA Order PR-33 provided for preference ratings for scarce materials for use in veterans' homes, VHP Order No. 1 restricted residential construction to $400 except for veterans' housing with priorities.
Construction cost data, as used in this article, are derived by adjusting, for undervaluation, builders' estimates of cost or value as stated on building permits; the cost of land is not included. Construction cost should not be confused with selling price.
PUBLICLY FINANCED DWELLINGS
Housing units financed by public funds-many of them defense or war housing of a temporary nature-accounted for an appreciable part of wartime construction, and increased more rapidly than private housing from 1939 to 1942. In 1939, 57,000 units, or only about a tenth of the new dwellings in nonfarm areas, were financed by public funds; by 1943, the proportion was nearly half the total. During the 5-year period 1939 through 1943, over half a million new units were started from public funds, more than 10 times the number of publicly financed dwellings started in 1939. In 1942, nearly 200,000 dwelling units were started with public funds. Since that time, however, the need for public construction in critical areas has declined, and the construction of new public units has fallen off. In 1944, less than a fifth (18 percent) of all new dwelling units were publicly financed. In 1945, the proportion was only 7 percent, or 18,000 units.
Housing in Relation to Other Construction
The war emergency necessitated a shift in new construction from housing to nonresidential construction for industrial and military purposes. In 1939, new residential building accounted for about a third of all construction expenditures, industrial expansion for 4 percent, and military and naval facilities for 2 percent. Total expenditures for construction amounted to 7 billion dollars. By 1942, the peak year for emergency construction, 13 billion dollars were expended. Of this amount, 8.5 billion dollars, or nearly two-thirds, went for new industrial, military, and naval facilities. This expenditure was greater than the combined figure for all construction in 1943. Residential construction, on the other hand, in 1942 showed a 45-percent decline from the 1941 peak of 3.1 billion dollars and amounted to only 13 percent of all construction expenditures, compared with 32 percent in 1939. This was caused by the drop in private housing, which showed a 55-percent decrease from 1941 to 1942 and continued to decline through 1944.
The downward trend had reversed itself by 1945, and, during the first 6 months of 1946, expenditures for housing rose to 30 percent of the total, indicating a considerable change in the pattern of construction projects.
Housing Trends in 1944 and 1945
In order to understand recent developments in the housing picture, it is necessary to go back to 1944 and 1945 in some detail.
The trend in new dwelling units in nonfarm areas for the years 1944 and 1945 reveals a period characterized by wide fluctuations, resulting from a variety of unusual causes. During this period home construc
tion reached a low point for the war years, with only 169,300 new family units started in 1944. Monthly figures for new housing dwindled to 7,700 in January 1945 and stood at 8,500 in February. Subsequent months in the year showed increasing gains in the number of new dwelling units. The over-all for the year 1945, amounting to 246,700 new units, registered an advance for the first time since 1941 and a 46-percent rise over the previous year.
The advance in the first half of 1945 was a direct result of the partial relaxation of building controls, under the H-2 War Housing Program, which permitted construction of dwelling units costing up to $8,000 under certain conditions of community hardship. Expansion of the H-3 program for personal hardship cases in critical areas also permitted construction of additional private dwellings without cost limitations.
The lifting of all wartime controls affecting the construction industry which followed the defeat of Japan in August 1945 was reflected in the sharp upturn in residential building for the fourth quarter, in contrast to the usual seasonal variations. New nonfarm dwellings increased 40 percent over the previous quarter, and amounted to about 91,500 units-more than 2%1⁄2 times the 33,500 units begun in the corresponding 3 months' period in 1944.
The 202,000 single-family dwellings scheduled by private builders were responsible for four-fifths of all new dwelling units in 1945, and showed a three-fourths increase over the previous year. One-family units accounted for about nine-tenths of all private housing in 1945, and showed larger gains than other types of private dwellings. Construction of 2-family units on the other hand, continued to show a decline.
DISTRIBUTION OF NEW DWELLINGS BY SIZE OF PLACE
Urban residential construction accounted for approximately twothirds of the new nonfarm dwelling units in 1944 and 1945, the remaining third being located in rural nonfarm areas (table 5.) In general, however, rural nonfarm private dwellings had a larger proportionate increase from 1944 to 1945 than urban housing, advancing 71 percent as against 62 percent.
When the figures are analyzed by size of place, however, it is found that the increase in 1945 was greater for small cities and towns than for large cities of over 100,000 population, or even for rural nonfarm Privately financed dwellings showed the largest increases for places under 100,000 inhabitants, in some instances rising over 100 percent, and amounting to more than three-fourths increase for each population class except for the rural nonfarm areas. Publicly financed residential building, on the other hand, declined for each population group.