Building fund

“ Of course if the Public Works Loan Commissioners lent a larger proportion of building capital than they do now, they would be justified in charging interest at a somewhat higher rate, the difference between the new and the present rate going to a national reserve fund, out of which possible losses might be paid. ”

“ William Steward, Esq., would submit to the meeting a proposal he held in his hand, which was to raise a building fund of £1,000, in shares of £10 each, on which interest at £3 per cent. per annum is to be paid till the fund will enable them to liquidate it ”

“ The executive may begin building whenever they choose, and incur [Pg 235] debts, and mortgage both land and building as soon as they possess either. They can spend on bricks and mortar all the money they receive to the extent of £250,000, without putting by a penny towards the endowment fund. ”

“ Amidst all the many things I again made my requests about means for the Building. And now observe: About five minutes, after I had risen from my knees, there was given to me a registered letter, containing a [Pg 46] cheque for £300, of which £280 are for the Building Fund, £10 for my own personal expenses, and £10 for Brother Craik. The Lord's holy name be praised for this precious encouragement, by which the Building Fund is now increased to more than six thousand pounds."
MR. MÜLLER'S FIRST ORPHAN-HOUSE.
"Jan. 25 [1847] .—The season of the year is now approaching, when building may be begun. ”

“ Instalments covering interest at that rate and providing a sinking fund towards the repayment of the principal would be of substantially less amount than the subscriptions to the building societies, and would not exceed the rents tenants have been accustomed to pay without any prospective advantage. Schemes to practise thrift and to induce people to take a greater interest in their homes and to enable them to acquire homes which are really attractive on reasonable terms are to be encouraged by every means which the Legislature or private individuals can adopt without causing pauperisation. ”

“ Furthermore, building-association stock is not taxable in most States.
Individual and moneyed corporations are coming to consider the matter of loans, and means leading to their repayment, on the building-association plan. This will be brought about largely by the low price of money throughout the country at this time. Savings banks, mortgage companies, and life-insurance organizations are finding it difficult to loan their funds at a price that will pay their fixed obligations; hence, they are seeking means which will lead to a more profitable investment of their funds. ”

“ We’re cutting the red tape that prevents some of these projects from getting started as quickly as possible. And we’ll set up an independent fund to attract private dollars and issue loans based on two criteria: how badly a construction project is needed and how much good it will do for the economy. ”

“ This year I urge the Congress to honor my request for model cities funds to rebuild the centers of American cities by granting us the full amount that you in the Congress authorized--$1 billion.
The next essential is more housing--and more housing now.
Surely a nation that can go to the moon can place a decent home within the reach of its families.
Therefore we must call together the resources of industry and labor, to start building 300,000 housing units for low- and middle-income families next year--that is three times more than this year. ”

“ Bond issues were pyramided by communities with the same disregard of the coming of the pay day which characterized the individual. We built great cathedrals of education, with motion pictures and swimming pools and all sorts of gewgaws and frills. We erected public buildings in many cases entirely beyond possible needs of communities for a hundred years. Just as private enterprise overbuilt in every direction, governmental building activities got out of bounds. The people have to pay the bill. ”

“ For some distance up all the radii of which we have spoken, the arteries which lead from this heart of the commercial world, a similar process has been going on to a greater or less extent. Banking-houses, insurance-offices, and commercial buildings, have been built or rebuilt at an immense cost, the outlay depending rather on the rapidly increasing value of the ground than on the actual charge for building. ”

“ From funds made available under the heading Federal Buildings Fund, Limitations on Availability of Revenue, claims against the Government of less than $250,000 arising from direct construction projects and acquisition of buildings may be liquidated from savings effected in other construction projects with prior notification to the Committees on Appropriations of the House of Representatives and the Senate. ”

“ But important as are these well-known factors of land, municipal and site improvements, building construction and house furnishings, it is a striking fact that they do not influence housing costs to nearly the same extent as does the cost of finance. What makes a workingman's home almost prohibitive to-day is the price paid for the capital employed in building the house. More capital is required to-day than formerly, and is paid for at a higher rate. Since the capital is usually employed in a small-scale speculative venture, the investor naturally requires a high return on his money. ”

“ In many communities where Demonstrations have been held, the small contributions necessary have been readily volunteered by the various organizations, business firms or individuals directly interested in the financing and furnishing of homes. Contributions may be secured from bankers, stores, public utilities, real estate dealers, building material dealers, insurance men, etc. The amounts contributed by the various interests should be carefully apportioned and only a sufficient sum collected to pay the actual expenses of the Demonstration. ”

“ The chief destruction of capital comes from the erection of expensive buildings on cheap lots, while the erection of cheap buildings, known as tax payers, even on expensive land, should not lead to loss, although it may not lead to great profit. On a street whose traffic is increasing rapidly a business building costing several times the value of the land may profitably be erected, since within ten years the value of the land may overtake the cost of the building. ”

“ These principles place paramount the fact that housing construction and financing for the overwhelming majority of our citizens should be done by private enterprise. They contemplate also that we afford governmental encouragement to privately financed house construction for families of moderate income, through extension of the successful system of insurance of housing investment; that research be undertaken to develop better and cheaper methods of building homes; that communities be assisted in appraising their housing needs ”

“ The money that is taken from you and me, or the more industrious members of the community, and that we should have laid out in having snug, comfortable houses built for us all, or two bed-rooms for our families instead of one, is employed, now that it has got into the tax-gatherer’s hands, in hiring the same persons to build two enormous houses for the government-man and the fund-holder, who live in palaces while we live in hovels. ”

“ And fifth, I ask you tonight to fund our HOPE housing proposal and to pass my enterprise-zone legislation, which will get businesses into the inner city. We must empower the poor with the pride that comes from owning a home, getting a job, becoming part of things. My plan would encourage real estate construction by extending tax incentives for mortgage-revenue bonds and low-income housing. And I ask tonight for record expenditures for the program that helps children born into want move into excellence: Head Start. ”

“ Tariff schedules, navy yards, army posts, rivers and harbors, post offices and federal buildings, pensions and patronage: these are fed out to concave communities as tangible evidence of the benefits of national life. Being concave, they can see the white marble building which rises out of federal funds to raise local realty values and employ local contractors more readily than they can judge the cumulative cost of the pork barrel. ”

“ People have not been tempted to invest in house property, which is always an anxiety, when they had such good alternatives in absolutely liquid securities. Next, there has been a very rapid rise in the cost of constructing a house—a rise of 10 or 12 per cent, during the last 10 years. Added to these causes which have discouraged the building of new houses, the increased activity of Sanitary Authorities, under the 1909 Housing and Town planning Act, has resulted in the closing of a large number of houses. ”

“ 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 ”

“ But the advance in the price of land suitable for a home site, the cost of construction, and the necessity of enlarging the plans at first proposed, made the task of securing sufficient funds to execute so large an undertaking too great to be attempted by the society. ”

“ National and Public-Utility Housing Schemes and public and industrial works of all sorts will naturally and properly claim priority in the matter of all building materials—and the private individual, so far as he can secure such materials at all, will only do so at a price that is the logical outcome of an unprecedented demand and an ominously inadequate supply. ”

“ Probably if a larger proportion of the capital required for land and building—say 85 per cent. instead of 66 per cent.—were lent to Public Utility Societies, they would spring up all over the country. A Public Utility Society is a group of people who band themselves together to build houses, undertaking to receive not more than 5 per cent. interest on their money. They build, and then let, and give the tenants a real inducement to look after the property well in the form of a bonus if the cost of repairs is low, and if the houses are well let. These Societies are making headway. ”

“ At length a plot of land is let to a smart enterprising builder, highly recommended by his timber merchant; and to induce the builder to proceed ‘with spirit,’ and secure the ground rents, liberal cash advances from the fortunate proprietor are suggested, and eventually made. The ‘architect’ will certify the cost of building work to warrant each advance, and the solicitor will take the builder's equitable security, and his receipt; the fees remaining with the ‘architect’ and lawyer as before. The freeholder once more is good for all, but gets no gain. ”

“ By means of a building society, a person who desires to possess a house enters the society as a member, and instead of paying his rent to the landlord, pays his subscriptions and interest to a committee of his friends; and in course of time, when his subscriptions are paid up, the house is purchased, and conveyed to him by the society. The building-society is thus a savings bank, where money accumulates for a certain purpose. But even those who do not purchase a house, receive a dividend and bonus on their shares, which sometimes amounts to a considerable sum. ”

“ This should include financial aids designed to yield more housing at lower prices. It should provide public housing for low-income families, and vigorous development of new techniques to lower the cost of building. ”

“ If a building and loan association, or bank, loans you money on the property, it has a direct financial interest in helping you guard yourself on certain points, such as making sure that there are no old mortgages, no unpaid back taxes, or bills for building materials, or other claims against the property. ”

“ Should the cost of building diminish but a little, the rate of profit of the builders on their own capital (in many cases not one-tenth of the capital they employ) will run up to 20 or 30 per cent, or even more; and at even a 20 per cent profit the bricklayers would find that a perfect rage for building would set in. Every speculative builder in the trade would strain his credit to the utmost, and take up every £100 from his bank that he could induce the bank manager to let him have. ”

“ I bore my testimony in the strongest terms against funding any interest, and proposed to open a land-office as a sinking fund for the whole of the back interest, including the indents, but I found no second. The interest of the whole was placed on one footing, almost without a division. ”

“ If made some years later, when the property has begun to pay, the risk and necessary financial loss of the lean years should be remembered, as any one building a road in the 193future will necessarily have the same problems to meet, together with the expenses of interest, depreciation, loss from operation, etc., both during the construction and the lean years following, all of which must properly be considered a part of the real cost of constructing and developing a property. ”

“ The same principle obtains in mills and factories: net profit can be increased by a judicious increase of capital expenditure, which adds to the account for interest, but deducts a larger sum from disbursements for maintenance, repairs, and accidents. Cheap money for good security has, too, had much to do with the new architecture of our cities—architecture which employs granite instead of sandstone, substitutes sandstone and marble for brick, and demands brick of new durability and beauty. ”