Industrial Housing

Front matter

INDUSTRIAL

HOUSING

By

Introduction

INTRODUCTION

AT the close of the nineteenth century, the little city of Bayonne, New Jersey, still retained its early character of a residential center. Located on a low, narrow peninsula which extends along the west side of upper New York Harbor it was rather sparsely covered with little individual wood houses, set in the familiar pattern of rectangular streets, laid out in a multitude of long narrow blocks, as nearly alike as possible—the traditional American town. Slowly growing, it was taking its place as a suburb of New York City. For the most part, industry had left it undisturbed. Self-contained and homogeneous, Bayonne had few serious problems.

How industry transforms a city

But the twentieth century brought a profound change. The Aladdins of industry noticed Bayonne's position on the shore line of the Port of New York, remarked the main line of the Central Railroad of New Jersey running along its water-front, and they saw the big "Hook," a huge tract of low waste land which juts into the harbor opposite Staten Island, along the ship channel into Newark Bay. This combination of transportation routes and undeveloped land meant opportunity. The Aladdins rubbed their magic lamps and behold!—a new Bayonne arose. A collection of huge industrial plants, built by corporations of national and international scope was placed on the Bayonne peninsula, with wharves, avenues, business buildings, schools, churches, institutions and recreational facilities, together with the transportation lines required to serve all this complicated machinery. And lastly, the army of workers arrived, who were to make the machinery go.

In the quick transformation, the Hook section went to the oil companies—the Standard Oil Company of New Jersey, and the Gulf Oil, the Vacuum Oil and the Tidewater Oil Companies, whose tankers could come and go from the wharves at their refineries to all the ports of the world. Manufacturing plants like the International Nickel Company, the American Radiator Company and the Pacific Borax Company, occupied locations near the railroad tracks. Somewhere near these refineries and factories the workers found housing of the sort offered by the local real estate market.

Bayonne was changed by the genii of industry from one end to the other in its physical aspect, and in its social structure it was changed from top to bottom. Formerly a quiet, residential suburb, it suddenly became busy, heterogeneous, industrial. A familiar story, this coming of industry into an old-fashioned city—so familiar, indeed, that its consequences are not heeded. But it is a process of revolution, and cannot avoid leaving scars.

Industry creates problems in housing

New times bring new problems and housing is one of these. In the picture of industrial expansion, as it exists in the minds of most people, housing does not figure prominently. The need of the wage-earner for a home is assumed to care for itself in the market furnished by the local real estate interests. Although all the resources of finance and of technical skill, driven by a relentless impulse for progress, are marshalled to secure the utmost efficiency of manufacturing plants, of railroads, shipping and other transport, as well as of many types of buildings like banks, warehouses and schools, how much science is used to keep the housing of the people abreast of the times?

The increasing complexity of the times and the steady rise in prices now bear very heavily on housing, and, in cities where industrial expansion takes place, breakdowns in housing production are occurring. It is not so much that new houses for the wage-earners are not built, but that such houses as are built are too expensive and of a low standard. Bayonne furnished one of these examples of housing breakdown.

Such was the local situation in 1917, and a new event arrived to precipitate the crisis. This was the entrance of the United States into the World War.

When war was declared, the business leaders in Bayonne knew that the local housing market could not well take care of the renewed influx of workers which would result from the big contracts for war material which were expected at the Bayonne plants. A small group of men, acting at the instance of the Bayonne Chamber of Commerce, undertook to deal with the situation in an effective way. This was the special Housing Committee of the Chamber of Commerce, headed by Mr. C. J. Hicks, Executive Assistant to the Chairman and to the President of the Standard Oil Company of New Jersey.

Mr. Hicks took a deep interest in the matter from the first. His first care was to survey the housing situation of the Bayonne workers and then to formulate a program of principles, upon which remedial action should be based. This he did, and the most striking thing about his ideas is, that, notwithstanding the critical nature of the local situation and the war emergency confronting him, he made no concession to expediency, but, instead, set the standards to be embodied in the local housing high above the ordinary. He recognized the essential of low cost, but he also insisted that the highest architectural ideal be attained. Specifically, he urged housing of an "open" plan, having all rooms flooded with daylight, and provided with complete sanitary equipment, set in garden surroundings, with sufficient recreation space. The Committee agreed that the restricted amount of land available in Bayonne made necessary the apartment type rather than detached homes or housing of the row type.

The Bayonne Housing Corporation organized

Mr. Hicks and his associates became deeply interested in the problem because they felt that it was a universal one, and they know that the situation in Bayonne existed to a greater or less extent in countless cities and industrial districts throughout the United States. Any experience, therefore, which would be gained in Bayonne was sure to be valuable elsewhere. The Housing Committee determined to proceed along as broad lines as possible and to reach, if they could, the heart of the problem of industrial housing. Their first practical step was to organize the Bayonne Housing Corporation for the purpose of building houses.

The war ended a few months later, and peace brought new economic disturbances. The post-war readjustments blocked the housing program of Mr. Hicks' committee but, notwithstanding every discouragement, after a long effort, financial backing of about $1,000,000 was secured and the first group of houses was completed in the winter of 1924-25.

These first garden apartments of the Bayonne Housing Corporation were built as a demonstration of an ideal method of producing wage-earners' housing. In essentials, the ideal is this: a home of five or six rooms and bath and "modern" conveniences, set in a beautiful environment of architecture and gardens; this home to be produced and operated on sound business principles and to be rented to yield a moderate return on the capital invested, and at a figure which the average thrifty wage-earner could reasonably afford to pay. It will be seen that there is no philanthropy in this ideal, but that it has both an economic and social basis.

The instrument created to undertake the enterprise, the Bayonne Housing Corporation, represents national interests among its stockholders who include representatives of corporations having industrial plants in Bayonne, and a few individuals. These corporations are the Standard Oil of New Jersey, Tidewater Oil Company, Vacuum Oil Company, Pacific Borax Company, Babcock & Wilcox Company, The International Nickel Company, Bayonne Supply Co.; and among the individuals are Messrs. John D. Rockefeller, Sr., John D. Rockefeller, Jr., E. S. Harkness, W. M. Cosgrove, of the American Radiator Company and J. E. Johnson, with Mr. George E. Keenen of Bayonne as President of the Housing Corporation. One of the most interested backers of this enterprise was the late J. H. Mahrken, a public-spirited citizen of Bayonne.

Housing based on business principles

From the first the sponsors of the Bayonne Housing Corporation decided that a more rigid application of business methods in housing was needed in order to bring the ideal home which they had in mind within reach of the wage-earner. They knew that houses were being built everywhere in great numbers, especially in smaller centres, but too much of this housing was of inferior types, and was too expensive in both production and operation costs. The expensive character of this new construction served to set an exorbitant level of rent and sale prices, to which the prices of older houses must inevitably rise in the course of a few years. In fact, such a situation had already developed in the metropolitan area of New York City. There, in a number of instances people were paying for the privilege of living in antiquated, depreciated, insanitary, inflammable, dark,

Breaking ground for the Bayonne wage-earners' homes. The Mayor of Bayonne and the officers and directors of the Bayonne Housing Corporation start the work

cheerless "cold water flats," as much as they would pay for the new apartments of the Bayonne Housing Corporation. When the rise in prices of old construction to the level of prices of new construction was finally complete, the wage—earner—even the high-paid one—would find that he could not afford a suitable home. He would accordingly be obliged to accept a reduction in his standard of living.

It was felt that capital, no less than labor, would deplore any reduction in the standard of living of the workers in industry, and the individuals interested in the Bayonne experiment were ready to lend a hand in placing the production of wage-earners' houses on a sounder business basis.

That the particular section of the real estate market which produces wage-earners' housing is careless of the social interest, and that it operates inefficiently, with heavy economic waste in many industrial centres of the country—this is a truth well known to housing experts. The fact is that housing suffers from a somewhat obsolete and primitive business system in which small-scale methods of operation, heavy overhead, inefficient production, and excessive speculation are the chief causes of failure. From an economic viewpoint, the great need in wage-earners' housing is efficient large-scale production.

The American worker enjoys his present high standard of living because modern business methods have been introduced into the manufacture of his food, his clothes, his household goods, his education, his recreation, even of his luxuries, and there is every reason why the same efficiency should apply in housing, which, next to food, is the largest item in the wage-earner's budget.

The social responsibility

But the cornerstone of housing policy is the social and civic responsibility. The home is more than an ordinary article of trade, to be bought and sold like a cake of soap or a box of cigars; on the contrary, it is a personal thing, in fact the most fundamental institution of civilization. The sponsors of the Bayonne undertaking felt that the most fundamental defect in wage-earners' housing was, that it was produced with too little regard for the social and civic welfare, which, after all, should be the basis of housing policy, and they sought to cooperate with officials, with other public-spirited organizations and citizens, and with labor in setting the standards of housing as high as possible.

The charter of the Bayonne Housing Corporation guarantees the social policy in housing. The Company is in the nature of a public enterprise having the support of the Bayonne Chamber of Commerce, and it solicits the active co-operation of labor, officials, and of public-spirited organizations and citizens in bettering housing standards in their city. It may be termed a capitalist enterprise only to the extent that a large-scale housing corporation involves important business responsibilities which necessarily must be assumed by capital interests. Because of its civic character, the Bayonne Housing Corporation may be said to be an unofficial public service corporation, without possessing the usual franchise privileges or being subject to regulation of its acts by the State in the same way that a public utility is controlled.

This conception of a public-spirited housing corporation which represents all civic interests marks an important advance

Children's playground in New York's "East Side"

on the old idea of "company housing," which, though often inspired by good motives, nevertheless had certain fundamental defects. The chief fault of company housing was, that it superposed the landlord-tenant strife on the capital-labor antagonism, and thus created a combination which has been responsible for some of the most unsavory episodes in American industrial history.

The first group of homes

The principles on which the Bayonne Housing Corporation operates are successfully illustrated in this first group of houses, designed by Andrew J. Thomas, architect, of New York City. In these garden apartments the wage-earner enjoys a home of a much higher standard than the local real estate market offers, and he pays a rental of from two dollars or three to four dollars a room a month less. Specifically, this means the standard home mentioned, a home of four, five or six rooms—including a bathroom and other modern conveniences, steam heat and hot water supplied by the landlord—in a house which is well planned, soundly constructed, good architecturally, and set in the midst of gardens. This achievement brings within the reach of the higher-paid wage-earner an ideal home of the American standard of living. By thus demonstrating that the better-paid wage-earner can be ideally housed, the ultimate goal in housing, namely, the lower-paid ranks of the population—is brought nearer realization.

The methods which produced this success are treated at length in the following chapters, which explain the economics of industrial housing, the architecture of the garden apartment, and the history of the Bayonne Housing Corporation.

The Economics of Industrial Housing

CHAPTER I

Economics of Industrial Housing

THE economic factor is the main obstacle in industrial housing. The heart of the problem lies in the disproportionate increase in the cost of housing as compared with the general level of commodity prices and wages. As a result of this maladjustment, the average thrifty wage-earner can scarcely afford a suitable home.

What has caused housing costs to soar? As mentioned in the introductory chapter, the cause will be found, not in circumstances which are beyond control, but rather in the inefficiency and disorganization of the housing industry itself. The removal of this inefficiency is the immediate purpose of contemporary housing technique, which has for its ultimate goal architectural and social progress.

Economics, therefore, is fundamental in industrial housing. Housing economics is an extremely complex subject, and is involved deeply in the technique of housing architecture. It is generally misunderstood, perhaps because the housing industry is divided into many parts—into finance, real estate, city planning, architecture, contracting, house furnishings, real estate management and household operation—so that housing is usually looked upon from the point of view of one or two of these many, often conflicting, interests, and rarely is it considered as a whole. As might be expected, when any one group in housing seeks to advance, the contribution which it makes to progress is either unimportant or else is blocked by inertia in other quarters.

The effect of the new housing architecture

Notwithstanding this disorganization, there has been a steady improvement in housing design, particularly since the World War. During the time that housing costs were rising, architects have given their best efforts to improve housing architecture and they have finally succeeded in perfecting a home for the American wage-earner which in all respects measures up to his standard of living, the highest in the world. This technical achievement introduces a new factor into the situation. As compared with the older models of the speculative builders, the superior economy, efficiency, convenience, firesafety and beauty of the new architectural types should create a revolution in industry besides which the changes wrought by the automobile seem slight in comparison. One may safely assert that, had the new housing architecture, which includes the new system of site-and-town planning based upon it, been perfected ten years ago, so that it could have been introduced at the same price level on which the older types were produced, it would already have begun to transform the entire physical aspect of American industrial districts. Housing blocks, neighborhoods, towns, whole districts, would be covered with better homes and gardens, interspersed with playgrounds, parks and open spaces.

The social transformation would be no less profound. For, in such an environment, life would be fuller, finer and more reasonable, and democracy, for the first time since the days of the beautiful old towns of the Early Republic, would again be on the way to having a setting worthy of it.

The contrast of slums

To draw such an ideal picture seems an odd way of beginning a discussion of economics. Nevertheless, the subject of housing economics is so intricate and so generally misunderstood that it easily loses point unless it is illustrated in a clear picture which we may keep before our eyes, revealing the vision of the future, when intelligence, organization and imagination are at last brought widespread into housing. Nor will this ideal painting alone suffice. If we are to grasp its meaning to the full we must have another picture to place beside the first one which will show, by contrast, the present lack of leadership and of statesmanship and the resulting disorganization, from which issue huge social and economic waste and the demoralization of slums. This latter is the picture of the outward tenements of New York City and of the ramshackle wooden houses of other cities. By comparing these two pictures one sees which way progress lies.

Floor plan of typical building of the Bayonne housing

The factors of high cost

It is necessary to understand the tangle of economic and human factors which has caused the existing situation in industrial housing. In dissecting the corpse of the housing industry, we soon find, as already stated, that high prices was the disease which killed the patient. Everything that enters into the cost of a home—land, site utilities, building construction, finance, taxes, municipal assessments, household furnishings, maintenance, operation of the completed home—has enormously increased in price. Over the last generation, in nearly all items this increase is over one-half, and in many cases it is double or even triple. The popular impression is that the change in economic conditions after the World War was the cause of the unprecedented increase, but the truth seems to be that the war only served to bring to a head a crisis which had been slowly gathering force for many years. Housing costs have risen, but so have wages, and it is claimed by some students that the wage-earner was not much better off before the war than after it. There are some pitfalls in this claim, as will be pointed out, but it is to a large degree true. At any rate, there is little hope of solving the problem of high costs in housing by merely waiting until the economic readjustment, which is now taking place after the war, is completed. America must tackle the situation in a more fundamental manner. America must reorganize her industrial housing industry. This means that first there must be a thorough understanding of conditions in the housing industry, and of its organization and methods of operation. This knowledge will form a basis for reorganization.

The place of housing in American history

The key to the puzzle of the housing industry lies in understanding its place in the economic history of the American nation. Housing has always been intimately related to the real estate exploitation of a continent. This exploitation has made housing a small-scale business, individualistic, very loosely organized and highly speculative. Its roots reach down to pioneer economics, back to the days when each householder built his home in a clearing, cutting down the trees of the forest for building materials. As towns and cities developed, the primitive method of the frontier soon gave place to a system of division of functions and of responsibilities. In this more specialized system the local real estate sub-divider, the small capitalist investor and speculator, and the local builder, banker and lawyer, each had a part. The same system prevails to-day in most parts of the United States with but slight modification. Its method of operation is common knowledge and needs no description here. In fact, people are so accustomed to it that they overlook its defects.

In the latter part of the nineteenth century efforts were made to give to this small-scale local system the benefit of large-scale finance. Capitalists organized the large mortgage companies, and the huge insurance companies like the Metropolitan Life Insurance Company and the Prudential Life, which invested a part of their funds in mortgages. The workingman himself developed the extensive system of building loan societies, for the sole purpose of financing his own home. In this connection one may also mention the growth of large industries in the manufacture of building materials.

The introduction of these large-scale factors, however, although they were steps in the right direction, could not correct the fundamental defects of the system. The large mortgage companies found it more profitable to make loans on large building operations; the building loan associations, although stimulating the production of small homes in many districts, did not use their financial power to influence an improvement in housing technique and architecture, nor did they promote large-scale methods of production; and, in consequence, the economy of large-scale production of building materials was somewhat nullified.

Despite its grave defects, however, this system undoubtedly did function with fair success in many parts of the country. In many districts, particularly in the very smallest towns and villages, thrifty, well-paid wage-earners could obtain a home of four, five or six rooms and bathroom, with "modern" conveniences of heating and plumbing, at a price which they could afford to pay. In this way were built those millions of little homes which dot the industrial map of the United States.These houses are the familiar single houses, mostly wooden, or those other well-known types, the two-family houses, the brick row houses of the cities, known as the "Philadelphia" row house, and the New England frame "three-decker."

Weaknesses in housing production

"But," it may be asked, "how could this system of producing wage-earners' homes be wrong, if it provided homes by the millions?" The answer is that the system was wrong, first, because the architecture of the homes was usually inferior; secondly, the system could not minister to the lower-paid ranks as a general rule; and thirdly, because such success as the system did achieve in housing well-paid workers was due to certain favorable economic conditions in the nineteenth century, which for a long period offset the disadvantages of inefficient, small-scale, disorganized and speculative production, which were rooted in the housing business. Moreover—here is the point of it all—when these favorable economic factors gradually ceased to operate, the inherent weaknesses in the system came out. The result of the change is now apparent. The system on which the wage-earner had come to rely for supplying his home is failing him.

What were these favorable elements which enabled the obsolete system of producing wage-earners' homes to last so long? In general, they were exceptionally low costs of land, labor, building materials, transportation, and of taxes and finance.

Feature in rear wall of comfort station

These were advantages which dated from pioneer times and they belonged to the period of extensive economics, which coincided with the development of the United States and its earlier industrial expansion. They lasted until well into the twentieth century.

The factor of land value

But to-day these differentials are disappearing rapidly. Land, which, when the country was being settled and when our big industrial centres were being founded, could be had at almost nominal cost, is now scarce and, in most districts, is very high priced. The influx of population from the countrysides into the cities has brought about the rapid industrial expansion of the last fifty years, and has caused a tremendous speculation in urban lands, which is reflected in inflated prices. The studies made of the increase in land values in the new industrial cities of Gary and Lackawanna, and the history of certain tracts of land in New York City, illustrate, in a striking way, how great this increase is.

The introduction of the structural steel frame and the elevator, coupled with the development of high-speed transportation, are other factors which have contributed to the rise in the value of city land. They have immensely increased the possibility of deriving income from real estate, and have worked to raise the value of land, which depends on the income that can be obtained from it. As a result of this more intensive use of land, the buyer of a home site is apt to find that the future growth of the city has been heavily discounted, even in the prices of outlying land; and, to a certain degree, he must outbid the promoter who is seeking a location for a larger building. Zoning is offered as a solution of the problem presented by the rise in prices of city lands in anticipation of more intensive commercial uses: i. e., by forbidding business and industry to enter residence districts, their land values are kept down. This remedy, however, does not reach the important factor of the increased cost of public improvements.

Factor of public improvements

Even worse, the prospective home-builder discovers that the increased cost of municipal improvements of paving, sanitation and water supply, and of the public services, such as gas and electricity, which has been particularly large since the war, is also heavily reflected in the price of land, and in taxes and assessments. The experience of the United States Housing Corporation during the war is instructive. This and other cases lead the New York State Commission of Housing and Regional Planning to declare that the cost of public improvements is at least three times that of "raw"—or unimproved—land.

Factor of land utilization

Crude and wasteful methods of utilizing—or of sub-dividing land, as it is called—are a further heavy drain on the homeowner's resources, whether in the cost of procuring or of operating his home. This waste in land sub-division has received much attention in recent years from architects, who have pointed out that the customary methods of plotting home sites usually require an excessive proportion of space to be given over to streets (which are extremely expensive) as compared with that allotted to housing locations; and that, furthermore, the custom of laying out a street system long in advance of the buildings piles up heavy carrying charges on the costly municipal improvements and public services in the street, which lie idle, often for years. The overhead on this heavy waste in street construction and on the premature development of street systems increases the cost of taxes and assessments, as well as the rates for water, gas and electricity; and it also accumulates as carrying charges on the land.

The influence of these various factors which enter into the cost of land are now being subjected to scientific study. They are brought up to date in the 1925 report of the New York State Commission of Housing and Regional Planning in elaborate detail. The Committee on Community Planning of the American Institute of Architects, in their admirable 1925 report, also deals exhaustively with this huge economic waste, and concludes that it can only be stopped by sound community planning. The Committee's report offers a typical example of the waste in streets, showing how, in a tract of 580 acres, in which 190 acres, or 32.8%, are devoted to streets as laid out in the customary way, this high percentage could be reduced by proper design to 23⅓%, effecting thus a saving of 55 acres or nearly 10%, and, at the same time, providing a more efficient and attractive arrangement of home sites.

Construction costs

Coming now to construction costs, the higher wages at present paid in the building trades is a well-known fact and needs but little illustration here. In New York City, in 1913, carpenters received $4.50; bricklayers, $6.00; plumbers, $5.50; helpers and laborers, from $2.25 to $3.50 a day, while in 1923 the figures were $10.00, $12.00, $10.00, and from $6.00, to $8.00, respectively. This is to say nothing of the bonuses paid in some trades, reaching as high as $4.00 for masons, plasterers and tilesetters. Although existing rates of wages may be lower in the future, there is small chance of a return to the older relationships. The restriction of immigration has reduced the supply of labor and the competition caused by the steady, less dangerous employment at high wages which is now offered in the factories requires a higher level of reward if American youth are to be attracted into the building industry.

Building materials have not risen in price as much as has labor, but they are, nevertheless, in most cases from 50% to 100% or more above pre-war level. We are now doubtless on a permanently much higher price level than in 1913. At that time, because of disorganization and over-expansion, the materials industry was operating either with little profit or else at a loss. To-day, the higher wages paid for unskilled and semiskilled labor, together with the higher freight rates on railroad, ship and truck—all these factors more than offset any economies which may have been gained through the improvement in methods of mill-production of many important building materials such as steel, lumber, plaster and the metal products.

But the most important factor by far in the low cost of housing construction during the development period of the United States has been cheap lumber. It was cheap lumber, cut by low-priced labor from land of little or no value, and transported at small cost to the home site, which made possible the colossal production of wage-earners' homes in the nineteenth century. But now this tremendous advantage is passing, probably never to return. The cutting away of the forests, together with high wages, higher freight rates and the higher cost of depreciation of timber construction, are putting an end to the superior economy of wood over the other building materials.