Revival of the Building Industry

November 30, 1937

Report Outline
Administration Drive to Revive Building
Building Trends and the Housing Market
Disabilities of the Building Industry
Federal Efforts to Simulate Building

Administration Drive to Revive Building

In an effort to halt the present business recession without resorting to additional federal expenditures, President Roosevelt, in a special message to Congress on November 29, outlined a series of proposals intended “to encourage the private construction and financing of housing on a large scale,” Pointing out that “housing construction has not kept pace with either the needs or growth of our population,” the President said: “From the point of view of widespread and sustained economic recovery, housing constitutes the most promising single field for private enterprise.”

The long-continued lag in building [the President said] is a drag on all industry and trade. This presents an urgent problem which is the common concern of industry, labor, and government. All business needs the infusion of orders and the diffusion of purchasing power that come when building is thriving. Great numbers of people look directly or indirectly to the construction industry for employment. This industry, to a greater extent than any other, will pot idle funds to work and thus speed up the circulation of the nation's money supply. This, in turn, would increase national income, reduce unemployment and as a result contribute towards a balance of the budget.

Although much had been done by the federal government to encourage building activity, the results had not yet been satisfactory, since housing construction had played “only a minor part” in the general recovery movement since 1933.

Roosevelt Plan to Encourage: Private Construction

President Roosevelt's program for revival of private residential construction contemplates expansion and liberalization of the powers of the Federal Housing Administration. Set up under the National Housing Act of 1934, the F. H. A. now has authority to insure mortgages on single dwellings, on large-scale rental developments under-taken by limited-dividend companies, and on large-scale developments built for sale to individual purchasers. The President's proposals are designed: (1) to effect reductions in financing costs; (2) to extend the insurance of mortgages to types of housing operations not now adequately provided for under the 1934 law; and (3) to make the funds of institutional and individual investors more easily available for the financing of large-scale building operations.