Upkeep of grounds: Walks, drives, fences and walls, lawn and garden, planting, general, etc. Upkeep of building: Roofs and downspouts, porches and areas, halls and stairways, rooms and closets, laundries and lockers, general, etc. Upkeep of equipment: Screens and awnings, stoves and gas logs, furnishings, safety appliances, telephone and signals, lighting, tanks and cisterns, other plumbing, pumps and heaters, other heating, chutes and incinerators, machinery and tools, sprinkler system, elevators, engines, generators, general, etc. Service Electricity, water, supplies, coal, gas, steam, wages of all employees, disposal of ashes, of rubbish, of garbage, inspections, telephone, etc. Insurance Fire protection on building, on furnishings, on rents, etc.; liability protection on employees, on general public, on boilers, on elevators, etc.; plate-glass protection on windows, etc. Salaries Building superintendent and his office employees. Taxes Levied on land, building, and equipment. OPERATIVE EXPENSES-Continued. Assessments Levied with taxes for street lighting, street cleaning, street maintenance, street improvements, etc. Depreciation-Reserve— Arbitrary amount, or predetermined per cent of building cost and equipment cost, written off for physical deterioration and obsolescence. ADMINISTRATIVE EXPENSES: Office overhead Cost of office equipment and appliances, rent for space occupied, janitor service, telephone and telegraph service, magazines and papers, reports and directories, supplies, postage, electricity, water, steam, gas; fire insurance on equipment and records, liability insurance on office employees, indemnity insurance on general public; legal services, legal counsel, and other legal items, advertising, general taxes on personal property, on moneys, on credits, etc.; depreciation of equipment, etc.; commissions paid, salaries of building manager and employees, or equivalent in owner's time and attention, etc. Rent conceded Accruals on occupancy given to tenants as an inducement or bonus and for which they are not charged and do not pay. Doubtful accounts-Reserve Actual amount or predetermined per cent of outstanding accounts receivable written off as uncollectible and lost. Interest Accruals, commissions, and expenses in effecting and renewing loans, etc. Percentage The per cent to be figured in the columns marked "per cent of capital" is the per cent the amount is of the amount of the total capital investment. Per cent occupancy— Number of months of actual use or occupancy divided by the number of months of possible occupancy. Or number of square feet of actual occupancy (averaged) divided by number of square feet of possible occupancy. 47-1 rying charges and of reserves for vacancies and bad accounts and for depreciation and obsolescence. To determine the range of these operating costs the corporation sent out another questionnaire-in simplified form-to the realtors of the National Association of Real Estate Boards, requesting for a five-year pericd comparative yearly operating statements, based on dependable financial records, of the typical real properties classified in utilization as follows: (a) Residences, average neighborhood. The returns from this questionnaire have been insufficient numerically to warrant more than broad generalizations. It has not been possible to differentiate the typical operating costs of residences in average and modest neighborhoods. The operating costs of flats as reported differ mostly from the operating costs of residences in average and modest neighborhoods in the factors of service and vacancies. From the evidence in hand, together with confirmatory expressions of opinion, the range of "fair" gross rental returns on residential properties, based on past, not present, experience, would appear to be somewhat as follows: Revenues and expenses in percentage on investment. Since the rental schedules of the Housing Corporation were of necessity fixed before the projects could be completed and long before it was possible to determine the market value of the individual properties comprising the projects, the gross rental factors actually realized on the approved sale value of the houses illuminate, if they do not fully support, the contention made by the corporation that its rental charges have been in fact "reasonable and just" to the tenant if not to the landlord. Excluding apartments and hotels, the appraisals of which are necessarily based on rental income, and excluding the projects at Bremerton, Wash., Charleston, W. Va., Cradock, Va., Erie, Pa., Hammond, Ind., Indianhead, Md., Philadelphia, Pa., and Vallejo, Calif., the appraisals of which have either not been returned or remain unapproved, the gross rental factors on appraised or sale values have broadly worked out as follows: RESIDENCES. East Moline, Ill. 340, 250 38, 016 11. 1 36, 120 10. 7 68, 712 9.3 New London, Conn. 524, 075 54, 072 10. 3 Maintenance. Newport, R. I. 0.8 166, 900 1. 4 15, 120 9. 1 2.5 Niagara Falls, N. Y. 368, 400 5 6 47, 780 12.9 Niles, Ohio 218, 196 19, 200 8.8 3 Quincy, Mass. 1,482, 000 1.9 Rock Island, Ill. 1.0 11. 7 Truxtun, Va. 4.0 Waterbury, Conn. 243, 815 20, 544 .5 Watertown, N. Y. 8.4 9.85 few units of 3 rooms and some of 7 and 8 rooms. There are 501 families living in new two or three story apartment houses of from 6 to 45 families per building. Most of the apartments have 4 rooms; the largest have 5 rooms. These figures include a few old buildings on purchased properties. Schools, stores, sewerage plants, heating plants, restaurants, men's clubs, and other attendant community facilities come under the supervision of the Operating Division of this corporation. In addition to the above, dormitory accommodations were provided, exclusive of the Washington Navy Yard project, for at least 1,468 persons, and hotel accommodations, exclusive of the Washington Government hotels, for more than 599 (see p. 285). MANAGEMENT. To handle these properties there has been established, in addition to the central office at Washington, a field office at each of the housing developments, and in this office is placed an operating representative with such staff as may be necessary. Detailed records of these properties are kept, copies of which are sent at specified intervals to the Washington office. The housing developments were first reserved for the use of the employees of Government plants and war industries, but where it was found impossible to fill the houses from these groups the houses were thrown open to the general public. In case the war had continued over into the year 1919 these houses and many more would have been required to shelter essential workers on Government contracts. In view, however, of the armistice, and particularly of Germany's signature to the treaty of peace, it became safe to open these houses to the public and thus protect the Federal investment. In many of the estates it has been comparatively easy to rent the properties as soon as they were completed. At Cradock less than half of the houses were taken up by navy-yard employees, but within a few hours of the time that the houses were open to the public 360 were rented, although at prices which the navy-yard workers had protested were too high. At Erie and Bridgeport, where immense war contracts in a large number of plants were speedily curtailed or canceled, certain plants have been slow in opening up new peace-time industries, and, therefore, properties have been somewhat slower to rent. In general, however, the properties of the Housing Corporation were so much more desirable than the properties built by other agencies that they have been among the first to rent and the percentage of vacancies is relatively low. The character and the credit of all applicants are carefully investigated. As a result there have been virtually no losses on Housing Corporation prop erties from arrears in rent or bad debts. Repairs on some of the properties though new will be necessary because war conditions forced the use of inferior materials in certain developments. The War Industries Board, in order to save metal and other materials for more direct war purposes required the use of many substitutes which were less durable or less well adapted to the purpose. To save transportation deliveries for the same reason it was often necessary to use local materials, though inferior, rather than more durable materials from a distance. In general, the cost of small repairs due to carelessness of tenants has been kept down, first, by care in the selection of tenants, second, by the terms of the lease, and third, by inducing in the tenants a sense of corporate responsibility and community pride in the estate. PROVISION FOR WELFARE OF TENANTS. The welfare of the tenants is provided for primarily in the skillful planning of the estates and of the houses, which are in general simple, convenient, and attractive. In some of the larger estates school buildings which can also be used for citizens' meetings or as community centers had to be constructed. In a few instances also playgrounds or other open spaces have been provided for the use of the chil dren. The care which is exercised in the choice of tenant is a means of protection of all residents in the community. Fire protection is provided either through cooperation with the neighboring city or through special provision within the community. The operating representatives are in general resourceful men who can advise and help the tenant upon request, and who can in a variety of ways promote community welfare. In some cases, notably Truxtun (a colored community), this has become a very important branch of the work of the operating representatives. with Where single labor is housed it has been necessary to make provision for common rooms, to provide cafeterias, or restaurants, and in one or two cases for organization of the residents and for club-room facilities. The health, welfare, and productivity of the unmarried worker are so intimately bound up his or her use of leisure time that it was generally recognized to be good business to make provision of this character. Thus at Quincy there was provided in addition to the men's dormitories a common clubhouse of temporary construction and a cafeteria (the latter was at first operated by this corporation, but was subsequently rented to a private firm). Similar cen ideration, though less detailed, was given to the needs of single workers at Bremerton, Wash.; Kitery Point, Me. (in remodeled hotels); and at Vallejo, Calif. 1 See pp. 194 and 197-9. GOVERNMENT HOTELS, WASHINGTON, D. C. The demands of the Government departments for clerical service during the war caused a very serious congestion of the private residences of the city. The condition became so serious that governmental construction of hotels for the accommodation of such war workers was imperative. Several sites were selected and construction had begun on three such sites before the armistice. When the projects were curtailed one of these sites was abandoned but construction was continued on the Plaza and Capitol sites and hotels were constructed to accommodate approximately 1,800 women clerks in Government service. The buildings provide both single and double rooms, which are rented at the uniform price of $45 per month with two good, wholesome meals per day. Common rooms are provided for social purposes in each of the 12 U-shaped buildings which were constructed, and in addition there are two large dining rooms and over one of these a large hall which can be used for lectures, dances, and theatricals. These buildings have been put in charge of women managers who combine business training and executive experience and thoroughly understand the moral responsibility involved in looking after the interests of 1,800 young women. It has been possible through skillful management to provide for the physical and general welfare of the residents on the above terms and yet to make approximately $4,000 monthly above operating expenses, which provides an adequate reserve for replacements. THE SALE OF THE PROPERTIES. The sundry civil bill in July, 1919, directed that "all property shall be sold at its fair market value as soon as can be advantageously done, and a reasonable. effort shall be made to sell the houses direct to prospective individual home owners for their own occupancy before they are offered for sale in bulk or to speculative investors," and that "the United States Housing Corporation shall round up its affairs and dissolve as soon as it has disposed of said property and performed the duties and obligations herein set forth." * * ** APPRAISAL. Upon receiving these instructions from Congress steps were taken to ascertain the actual values of each individual house in each of the projects. A committee of appraisal, known as the board of survey, was therefore appointed for each of the project cities. It bad as its chairman a competent and experienced realestate man of standing and reputation. The man appointed was not a resident of the project city, but was chosen because of his knowledge of the general conditions in the district within which the project was located. He was asked to nominate four other men for service on the board of survey, one of these men representing the contractors or builders and familiar with the cost of construction and sales value of new properties in that locality, one a civil engineer familiar with the cost and value of the various utilities which were provided within the estate, such as water, gas, sewers, pavements, etc. The other two men were chosen to represent the laboring element and tenant interests of that community and have generally been men of prominence and influence within their respective fields. The boards of survey were instructed to appraise the improved and unimproved properties listed within a given community. They were provided by the Housing Corporation with books describing in detail the structure of each house and utilities furnished, together with such other information as was essential to the board. They were then requested to examine each parcel separately and fix a fair market value for it. The cost of residential housing is undoubtedly 70 per cent higher in 1919 than in 1913, yet appraisals have been based necessarily not on reproduction cost, but on community opinion that still rests largely as a matter of course on pre-war prices and conditions. Appraisals by November, 1919, have been completed at Alliance, Ohio; Bath, Me.; Bremerton, Wash.; at two of the projects at Bridgeport, Conn.; New Brunswick, N. J.; Newport, R. I.; Niagara Falls, N. Y.; Niles, Ohio; Pompton Lakes, N. J.; Rock Island, Moline, and East Moline, Ill.; Davenport, Iowa; and Vallejo, Calif. The appraisals of these projects which have been approved by the Housing Corporation have fixed their value at from 52 to 73 per cent of their cost. (See p. 172.) METHOD OF SALE. After they are appraised the houses are offered to the tenants. The original plan was to sell at the rate of 10 per cent down and 1 per cent per month of the purchase price. The experience of the selling representatives in various projects has shown, however, that it is very difficult if not actually impossible for many of the families to purchase homes in so brief a period of amortization. Although the initial payment has been kept at 10 per cent of the appraised value of the house, the monthly payments have in some cases been reduced to 1 per cent of the unpaid balance on the price of the house, thus lengthening the period of amortization. Thus a purchaser of a $4,000 house would pay $400 down and $36, not $40, per month, this latter payment covering both interest on the |