dustry," furnishes very complete statistics of the average annual hourly scale of building trades from May, 1913, to May, 1918. The increase in wages as of May, 1918, is 31 per cent, a figure which coincides with the figure for 1918 shown on our diagram (opposite p. 218) and the figure for 1918 presented by Mr. Howes, The report of the United States Department of Labor records the rise in price of all building materials exclusive of steel as about 75 per cent in 1918 and 84 per cent in the last quarter of 1918.

It thus appears that there has been a material increase in the cost of building labor in 1919 over 1918, but this increase has only followed the corresponding increase in cost of building materials and other commodities. The cost of both building labor and material now appears fairly comparable with other increases in the cost of living.

HOLLOW TILE AND BRICK HOUSES.

In addition to the estimate for the six-room frame house, estimates have been prepared for a similar house built of hollow tile and also one of brick (see pp. 220 and 221).

Comparison of cost of six-room dwelling house.

Type of house.

OVERHEAD, LAND, AND UTILITIES.

The foregoing estimates do not include public utilities, contractor's profit and overhead or architect's fee.

From the report of the Economics of the Construction Industry by the United States Department of Labor, as well as from the Real Estate Division of the United States Housing Corporation, the indications are that there has been little increase in the value of land occupied by the ordinary dwelling house. For the purpose of further comparison as to the total cost of the frame house with land, appurtenances, and overhead, we will assume the following:

Contractor's profit and overhead, 15 per cent... Architect's fee (plans and supervision) 6 per cent..

1913

1919

$2,972.36

$5,002.58

143.00

143.00

400.00

680.00

In the comparison of estimated costs as of 1913 and 1919, the same amount of materials and the same rates of output of labor are used in each case. The rates of output of building labor are, of course, subject to wide fluctuations. The rates assumed here have been compiled and checked by the Estimating Division of the United States Housing Corporation and by builders of practical experience. The efficiency of labor in the comparison presented is taken as being the same in 1919 as in 1913. With the exception of a period in the spring of 1919, many building contractors maintain that the efficiency of building labor is not as high now as it was in 1913.

In compiling these tables the cost of labor and material was figured out for each item for the house built as of 1913. The 1919 costs were arrived at by applying the percentage of increase in labor and material (which was derived from the diagram showing fluctuations in cost of labor and material) to the 1913 figures. It should be borne in mind that this is an estimate based on average prices and average work under union labor. There is a wide variation in the cost of labor and the cost of materials in different parts of the country and this same house built under different conditions from those assumed here may easily vary in cost $500 or more.

EXISTING HOUSING PROBLEM WITH REFERENCE TO INCREASED COST OF BUILDING.

The housing shortage to-day is almost universal. It exists not only in the cities of the United States but in almost every other country. The housing shortage in this country due to war activities and the increased cost of construction has been estimated at 1,000,000.

The market value of a house differs from most commodities. In most commodities the consumption closely approximates the supply and the selling value follows and corresponds with the increase in cost. The selling value of dwelling houses as a commodity is governed largely by rentals which the house will bring. By far the greater part of the house rentals come, of course, from houses built during pre-war costs. The rent of these houses has increased in general not over 20 per cent. This represents an increased income to the owner without an increased expenditure of capital.

An entirely different situation exists with respect to the owner renting a house built in 1919. A 20 per cent increase in rents based on 1913 costs will not bring the owner of a new building a rental sufficient to warrant him investing his money in dwellings for rental purposes. The new owner has to compete with the numerous owners of property built in pre-war times.

We are speaking generally. Of course, there are many cities where the housing shortage is so acute that new buildings are built and readily rented or sold at prices considerably in excess of the 1919 estimates which we have presented. Unquestionably as the housing shortage becomes more acute and as the older houses become obsolete and go out of the market all rentals and selling values of property will tend to approach the prices based on the cost of the new house.

During this transition period the wits of people have been sharpened in an effort to meet the problem. They are using some lessons learned from the Government's housing experience during the war and they are supplying construction and financial methods which will reduce the cost of the building to the occupants. The housing problem during the transition period is being solved by more efficient methods of construction and financing, so that economies in production will tend to reduce the cost of new dwellings as a compromise to meet the rising values of the older property.

A large part of the new dwelling construction now being undertaken is handled by housing companies. The membership of these companies consists largely of public-spirited citizens, who are content to finance the construction of dwellings at a value which will revert to their city and their local industries by ade

quate housing facilities. The economies which are obtained by these housing companies are accomplished by a reduction in the overhead cost which we have mentioned in our estimate of the total cost of the dwelling to the occupant. These economies, effected by a comprehensive plan, are as follows:

Reduction per house in the contractor's percentage or profit and the architect's and superintendent's fees by the construction of 100 or more houses at one time under one contract.

The reduced cost of materials by purchase in carload lots for wholesale building.

The more efficient utilization of highly subdivided and specialized labor by the ability to install a more efficient construction organization where a number of houses are built at one time.

The use of standards and uniform sizes in designs which do not, however, make the houses appear to be standardized.

The improvements in arrangements of utilities and conveniences in the house as well as the artistic arrangement of the buildings, drives, trees, and planting, so that the added attractiveness of the house will invite the occupant in spite of an increased rental or cost. LEROY K. SHERMAN, President U. S. Housing Corporation. WASHINGTON, D. C., December 18, 1919.