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U. S. D E PA R TM E N T OF L A BO R

BUREAU OF LABOR STATISTICS
ROYAL M EE KE R j Commissioner

BULLETIN OF THE UNITED STATES \
BUREAU OF LABOR ST A T IST IC S] * * ‘
M I S C E L L A N E O U S

j WHOLE
( NUMBER

S E R I E S :

158

N O .

GOVERNMENT AID TO HOME OWNING
AND HOUSING OF WORKING PEOPLE




IN FOREIGN COUNTRIES

O C T O B E R 15, 1914

W A S H IN G T O N
•

G O V E R N M E N T P R IN T IN G O FF IC E
1915

5




CONTENTS.
Government aid to home owning and housing of working people in foreign
countries:
Page.
Introduction and summary.................................................................. ......................... 9-28
Inadequacy of private initiative in providing housing................................ 9,10
Methods of Government aid in Europe............................................................. 10,11
Loans of public funds to public-welfare building associations................... 11,12
Slum clearances and rehousing in Great Britain............................................
12
Benefits from sanitary housing.............................................................................. 12,13
Summary of housing work in countries where Government aid has been
most important....................................................................................................... 13-28
Austria............ ..................................................................................................... 13,14
Belgium................................................................................................................ 15,16
Denmark.................................................................................. ........................... 16,17
France................................................................................................................... 17-19
Germany.............................................................................................................. 19-21
Great Britain...................................................................................................... 21-22
Hungary............................................................................................................... 22,23
Italy....................................................................................................................... 23, 24
Norway.................................................................................................................
25
Sweden................................................................................................................. 25, 26
Australia............................................................................................................... 26, 27
New Zealand...................................................................................................... 27, 28
Other countries..................................................................................................
28
Austria................................................................................................................................... 29-93
Introduction................................................................................................................ 29-32
Exemption from or reduction of taxes.............................................................. 32-40
Conditions governing exemption................................................................ 33-36
Administrative decree of January 7, 1903...............................................
36
Stipulations in contract of sale.................................................................... 36, 37
Results of tax exemption and reduction................................................... 37, 38
Reforms suggested............................................................................................ 38-40
State housing fund........................................................................................... ..
- 40-49
Conditions for grant of loans......................................................................... 41-47
Administrative features.................................................................................. 47, 48
Success of State housing fu n d ..................................................................... 48, 49
Hereditary right of construction (Baurecht) ..................................................... 49-52
Practical use of the Baurecht.......................................................................
52
Building laws ............................................................................................................
53
Expropriation laws................................................................................................... 53-57
Expropriation of insanitary areas................................................................ 54-57
Unearned increment tax ( Wertzuwachssteuer) .................................................. 57, 58
Creation of a bureau on housing..........................................................................
58
Housing work of the State as an employer...................................................... 58-62
1. Loans to building associations............... ................................................. 58-60
2. State-built houses for Government employees................................. 60-62




3

4

CONTENTS.

Government aid to home owning and housing— Continued.
Austria— Concluded.
Page.
Housing work of carriers of State social insurance........................................ 62-64
Proposed extension of housing work by social insurance institutes. . . . 64, 65
Municipal housing work.......................................................................................... 65-68
Public-welfare building enterprises................................................................... 68-90
Cooperative building associations............................................................... 68-73
Non cooperative public-welfare building enterprises (foundations,
stock companies, societies, etc.)............................................................. 73-83
Statistics of public-welfare building enterprises................................... 83-90
Need for additional building capital.................................................................. 90, 91
List of references consulted................................................................................... 92, 93
Belgium............................................................................................................................... 95-115
Introduction................................................................................................................ 95, 96
Legislation in force................................................................................ ................ 96-105
Administration of the law.............................................................................
96
Funds for building loans................................................................................ 96, 97
Limitation on amounts advanced..............................................................
97
Tax exemptions and reductions................................................................ 97, 98
Conditions of loans to building associations and loan companies. . 98, 99
Loans to individuals...................................................................................... 99,100
Life insurance as a guaranty of loans................................................... 100-102
System of annual and monthly repayments of loans....................... 103-105
Practical effects of legislation........................................................................... 106-112
Operations of the General Savings Bank............................................. 106,107
Operations of building and loan associations..................................... 107-109
Life insurance as a guaranty of repayment of loans.........................109,110
State aid through tax exemption............................................................ 110, 111
Housing activities of Provinces...................................................................
Ill
Housing activities of municipalities and charitable institutions.. .
112
Proposed reforms................................................................................................... 112-115
Bill of January 30, 1901............................................................................ 112,113
Bill of November 12, 1912......................................................................... 113,114
Reforms proposed by local patronage committees........................... 114,115
Conclusion....................................................................................................................
115
List of references consulted.................................................................................
115
Denmark............................................................................................................ .............. 117-124
Introduction............................................................................................................ 117,118
Legislation in force...................................................................................................
118
Application of the laws....................................................................................... 118-120
Success of the housing acts....................................................................................
120
Report of the Yalby Workingmen’s Building Association, January 1
to June 30, 1913................................................................................................ 120-122
Government proposal for revision of law...................................................... 122,123
Housing State employees and immigrant labor.............................................
123
Small holdings...................................................................................................... 123,124
List of references consulted.................................................................................
124
France................................................................................................................................ 125-156
Introduction............................................................................................................ 125-127
Legislation in force in aid of workmen’s dwellings.................................. 127-137
Conditions applying to cheap dwellings.............................................. 127-130
Tax exemptions for cheap dwellings.........................................................
130
Building and loan associations................................................................ 130-132
Institutions authorized to construct low-cost dwellings...................
132




CONTEXTS.
Government aid to home owning and housing— Continued.
France— Concluded.
Page.
Legislation in force in aid of workmen’s dwellings— Concluded.
Institutions authorized to make loans to individuals.........................
132
Public offices for cheap dwellings.......................................................... 132,133
Special provisions for aid in housing of large families........................
133
Facilities for transfer of property.................................................................
134
Conditions governing loans to individuals...............................................
134
Life insurance to guarantee repayment of loans................................ 134-136
Workmen ’s gardens, public baths, and lodging houses........................
136
Administration of the law.......................................................................... 136,137
Legislation in force in aid of ownership of small holdings...... .............. 137-142
Facilities granted to purchasers...................................................................
137
Individuals entitled to loans.................................................................... 137,138
Real estate loan companies....................................................................... 138-141
State loans to other than real estate loan companies............................
141
Administrative bodies...................................................................................
142
Practical effect of legislation............................................................................. 142-147
Building associations................................................................................... 142,143
Real estate loan companies....................................................................... 143-145
Statistics of the building associations................................................... 145-147
Tax exemptions.................. .................................................................................. 147-149
Loans and other housing activities of public bodies................................ 149-156
Savings banks.......................... .................................................................... 149-151
Bank of Deposits.......................................................................................... 151-153
National Old-Age Retirement Fund.........................................................
153
Charitable institutions . . ........................................................................... 153-155
Departments and municipalities............................................................. 155,156
List of references consulted...................................................................................
156
Germany............................................................................................................................ 157-281
Introduction............................................................................................................ 157—
160
Summary of efforts to improve housing....................................................... 160-168
Work of Imperial and State governments.......................................... 160-162
Work of cities......................................................................................................
162
Work of pub lie-welfare building associations..................................... 162-165
Causes of present housing conditions..................................................... 165-168
Activities of the Imperial Government.........................................................168-183
Housing work of imperial administrative authorities for their em­
ployees.......................................................................................................... 169-171
Imperial post office and telegraph department.............................
169
Imperial navy department............................................................. 169,170
Administration of imperial railroads............................................ 170,171
Administration of the Emperor William Canal.............................
171
Housing work of imperial housing fund............................................... 171-183
Loans to building associations......................................................... 171,172
Results of loans to building associations..................................... 173,174
Conditions for the granting of building loans............................. 174-179
Grant of hereditary right of construction on Governmentowned land......................................................................................... 179-183
Building loans by the State insurance institutes...................................... 183-199
Conditions under which loans are granted.......................................... 186-191
Statistics of State insurance loans........................................................... 191-199
vUnearned increment tax in aid of housing......................................................
199




6

CONTENTS.

Government aid to home owning and housing— Continued.
Germany— Concluded.
Page.
Housing activities of Prussia............................................................................. 199-215
State housing fund............................................................................................
200
Erection of dwellings by the State for its employees.................... 201, 202
Building loans, etc........................................................................................ 202-205
Statistics of housing work of Prussia.................................................... 205-211
Tax exemptions and concessions............................................................ 212-215
Housing activities of Bavaria............................................................................ 215-219
State provision for housing Government employees...................... 215, 216
Loans to building associations.................................................................. 216-218
Financial aid through the State Agricultural Mortgage B a n k .. . 218, 219
Housing work of Saxony..................................................................................... 219-221
Housing work of Wurttemberg......................................................................... 221, 222
Housing work of Grand Duchy of Hesse....................................................... 222-226
Housing work of Grand Duchy of Baden..................................................... 226, 227
Housing work of Grand Duchy of Mecklenburg-Schwerin.........................
227
Housing work of Grand Duchy of Oldenburg.................................................
228
Housing work of Grand Duchy of Brunswick.................................................
228
Housing work of Duchy of Saxe-Meiningen................................................ 228, 229
Housing work of Duchy of Saxe-Coburg and Gotha.....................................
229
Housing work of Schwarzburg-Sondershausen........................................... 229, 230
Housing work of Schwarzburg-Rudolstadt.......................................................
230
Housing work of municipalities....................................................................... 230-266
For their own employees.............................................................. ............ 230, 231
For the general working classes.............................................................. 232-266
Proposed housing reforms................................................................................... 266-279
List of references consulted............................................................................. 279-281
Great Britain and Ireland.......................................................................................... 283-347
Introduction............................................................................................................ 283, 284
Legislation in aid of housing............................................................................. 284-291
Supervisory powers of local Government board......................................... 291, 292
Financial aid to housing by the General Government............................ 292-294
Housing work of local authorities................................................................... 294-325
Clearance schemes for large slum areas................................................ 295-299
Action against small slums and insanitary houses........................... 299-303
Provision for new housing by local authorities.................................... 303-325
Housing work of rural authorities................................................................. 326,327
Government aid to housing work of societies, private persons, etc----- 327-331
Housing legislation in Scotland...........................................................................
332
Action of municipal authorities of Scotland (slum clearances, housing,
and loans)............................................................................................................. 332, 333
Action of local authorities of Scotland against insanitary houses----- 333-335
Government aid to societies, private persons, etc.. in Scotland...............
335
Special housing needs of Ireland..................... ..................................................
336
Action of municipal authorities in Ireland (slum clearances, housing,
and loans)............................................................................................................ 336, 337
Rural housing in Ireland................................................................................... 337-341
Summary of conclusions and recommendations of the British Land
Inquiry Committee in regard to urban housing.................................. 341-345
List of references consulted............................................................................. 346, 347
Hungary............................................................................................................................ 349-358
Introduction...............................................................................................................
349
Tax exemptions and reductions...................................................................... 349, 350




CONTENTS.

7

Government aid to home owning and housing— Continued.
Hungary— Concluded.
Page.
Building operations of the State.................................................................... 350, 351
Housing work in Budapest............................................................................... 351-353
Housing work in cities other than Budapest___ - .................................... 353, 354
Public-welfare building associations.............................................................. 354, 355
Housing of agricultural laborers......................... ............................................. 355-357
List of references consulted............. ...................................................................
358
Italy ................................................................................................................................... 359-379
Introduction...............................................................................................................
359
Housing legislation in regard to Rome......................................................... 359, 360
Movement for dwellings for working people in Italy.............................. 361-379
Housing work of cooperative societies, etc........................................ 362-364
Housing work of private organizations under the law.................... 364-366
Housing work in Milan........................................ ...................................... 366-370
The garden city of M ilanino.................................................................. 370-372
Housing work in Bologna.......................................................................... 372-376
Housing work in Venice........................................................................... 376-379
Luxemburg..........................................................................................................................
379
Netherlands..................................................................................................................... 381-388
Introduction...............................................................................................................
381
Legislation in force................................................................................. ............ 381, 382
Administration.................................................................. . . ....................................
382
Funds for housing loans..........................................................................................
382
Financial aid by the State............................................................................... 382, 383
Communal financial aid for housing.............................................................. 383, 384
Expropriation and long-term lease....................................................................
384
Extent of State financial aid.......................................................................... 384, 385
Housing work in Amsterdam.................................... ...................................... 385-387
Housing work in Rotterdam............................................................................. 387, 388
List of references consulted................. *.............................................................
388
Norway............................................................................................................................. 389-401
Introduction........................................................................................................... 389, 390
Legislation in force.............................................................................................. 390-395
Administration.............................................................................................. 390, 391
Funds available................................................................................................
391
Purpose of loans.- . ..........................................................................................
391
Loans to individual borrowers................................................................. 392-394
Loans to building associations.....................................................................
394
Loans to communes for purchase of small holdings........................ 394, 395
Miscellaneous provisions................................................................................
395
Operations under the law.................................................................................. 395-399
Occupation of purchasers of allotments under the act of 1903.................
399
Proposed reforms................................................................................................. 399-401
List of references consulted................... ........ .....................................................
401
Roumania..................................... ................................. .....................................................
401
Spain................... ........................... .......................................................................................
403
Sweden.......................................................................... ..............................................
405-415
Introduction..............................................................................................................
405
Legislation in force.............................................................................................. 405,406
Success of the Swedish homestead system................................................. 406-408
Occupations of purchasers...................................................................................
408
Proposed reforms.................................................................................................. 408-410
Division of large estates..........................................................................................
410




8

CONTENTS.

Government aid to home owning and housing— Concluded.
Sweden— Concluded.
Page.
Housing of State employees............................................................................. 410,411
Housing work in Stockholm............................................................................. 412-414
Housing work in cities other than Stockholm........................................... 414, 415
List of references consulted.................................................................................
415
Switzerland..........................................................................................................................
417
Australia.......................................................................................................................... 419-430
State loans for workers’ dw ellings....................................................................
419
Legislation in force.............................................................................................. 419-423
Administration..................................................................................................
420
Funds...................................................................................................................
420
Purposes for which advances may be m ade...................................... 420, 421
Amounts and conditions of loans.......................................................... 421, 422
Interest ra te s....................................................................................................
422
Repayments........ .......................................................................................... 422,423
Stamp-tax exemption.....................................................................................
423
Foreclosure proceedings................................................ .............. .................
423
Practical effects of legislation........................................................................ 423-428
New South Wales......................................................... ....................................
424
Queensland.................................................................................................... 424, 425
South Australia............................................................................................ 425-427
Victoria...............................................................................................................
427
Western Australia............................................................................................
428
Government land purchase and building................................................... 428-430
Western Australia....................................................................................... 428, 429
New South W a le s ....................................................................................... 429, 430
New Zealand................................................................................................................... 431-437
Introduction.......................................................................................................... 431-436
Expenses of administration.................................................................................
436
Occupations of purchasers...................................................................................
436
Life insurance guaranty.......................................................................................
436
Benefits of system....................................................................................................
437
Canada (Ontario)...............................................................................................................
439
Cuba......................................................................................................................................
441
Chile.................................................................................................................................. 443-445




BULLETIN OF THE

U. S. BUREAU OF LABOR STATISTICS.
W HOLE

N O . 158.

WASHINGTON.

O C T O B E R 15, 1 9 1 4 .

GOVERNMENT AID TO HOME OWNING AND HOUSING
OF WORKING PEOPLE IN FOREIGN COUNTRIES.
INTRODUCTION AND SUMMARY.

It is a common observation that a characteristic tendency of recent
times, with the great development of industry, has been the concen­
tration of the population into cities. With this growth has come the
problem of the overcrowding of dwellings and insanitary conditions
endangering the health of the entire community.
The attempt has been made by health regulations on the one hand
and by building regulations on the other to correct insanitary condi­
tions where they have existed and to prevent their development in
new buildings and in new quarters.
But haphazard opening of new streets and building sites in rapidly
growing areas and cheap, speculative building, liable to fall quickly
into decay, have constantly led to the development of new slum
areas and of houses unfit to be human dwellings and threatening
the health of the community.
INADEQUACY OF PRIVATE INITIATIVE IN PROVIDING HOUSING.

In the larger cities the question of cheap and, at the same time,
sanitary dwellings for workingmen of small earnings has in many
cases become an acute one. The ordinary means of supply by the
erection of houses by capitalists for investment have rarely proved
adequate. So we find national, State, and local housing commis­
sions, societies for the promotion of the erection of workmen's dwell­
ings, and everywhere the conclusion that private initiative has proved




10

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

inadequate to deal with the problem and that systematic Govern­
ment regulation, encouragement, and financial aid must be given.1
The fact that international housing congresses have been held in
Europe since 1889 gives some indication of the public interest in the
subject in European countries and of the activity of organized effort
to deal with some of its problems. The following list of international
congresses shows the countries in which they have been organized and
held:
1. Paris, 1889.
2. Antwerp, 1894.
3. Bordeaux, 1895.
4. Brussels, 1897.
5. Paris, 1900.
6. Diisseldorf, 1902.
7. Liege, 1905.
8. London, 1907.
9. Vienna, 1910.
10. The Hague, 1913.
METHODS OF GOVERNMENT AID IN EUROPE.

Most European countries have, as the result of investigation and
study, enacted legislation providing for Government aid in one form
or another for the better housing of the working people. The method
of granting this Government aid differs greatly in detail in various
countries, but the form in which the aid is given may be described
as of three main classes.
i
Compare in regard to American housing conditions: Baltimore, M d., Housing Conditions in Baltimore
1907; Cambridge, Mass., First Report of the Cambridge Housing Association, 1913; Chicago, 111., Tenement
Conditions in Chicago, Report of Committee of City Homes Association, 1901; Breckinridge & Ab bott,
Series of Articles in American Journal of Sociology, November, 1910, to January, 1913; Cleveland, Report
of Bureau of Sanitation, 1914, published by Department of Public Welfare; Fall River, Mass., Housing
Conditions in Fall River, C. Aronovici, 1912; Grand Rapids, Mich., Report of the Housing Committee
of the Charity Organization Society, 1913; Kansas City, M o., Report on Housing Conditions b y Board of
Public Welfare, 1913; Lawrence, Mass., The Lawrence Survey, Todd & Sanborn, 1912; Lowell, Mass.,
The Record of a City, G. F . Kenngott, 1912; Louisville, K y ., Report of the Tenement House Commission,
1910; Housing Conditions in Main Line Towns, M. Bosworth, 1913 (study of five towns— Ardmore, Haverford, Bryn Mawr, Ivayne, Rosemont— on main line of Pennsylvania Railroad, showing development of
slum conditions in wealthy suburban towns); New Y o rk City, The Tenement House Problem, DeForest
& Veiller, 1903 (2vols.); First Report of the Tenement House Department of the City of New Y o rk , 1902-3
(2 vols.); Report of the New York City Commission on Congestion of Population, 1911; Philadelphia, Second
Annual Report of Philadelphia Housing Commission, 1912; Pittsburgh, Pittsburgh Survey, Vol. V I , 1914,
T he Civic Frontage; Rhode Island, Tenement House Conditions in Five Rhode Island Cities, Rhode Island
Bureau of Industrial Statistics, 1911; Richmond, Report on Housing and Living Conditions in the Neglected
Sections of Richmond, V a ., G. A . W eber, W hittet & Shepperson, 1913; San Francisco, First Report of the
San Francisco Housing Association, 1911; St. Louis, Housing Conditions in St. Louis; Report of the Hous­
ing Committee of the Civic League of St. Louis, 1908; Satellite Cities, G . R . Taylor; A St. Louis East Side
Suburb, The Survey, February, 1913, pp. 582-598; Gary, The Survey, March, 1913, pp. 781-798; Spring­
field, Mass., Report on Housing Conditions in Springfield, Mass., C. Aronovici, 1912; The Housing Problem
in Texas, a series of newspaper articles by G. W . Briggs, 1911; Washington Housing Conditions, Report
of the President’s Hom e Commission, Washington, 1908; Neglected Neighbors, C. F . W eller, The J. C.
W inston Co., Philadelphia, 1909; A description of an objectionable building on Rhode Island Avenue,
The Survey, May 16, 1914, p . 204; Four Washington alleys, The Survey, Dec. 6, 1913, pp. 250-252.




GOVERNMENT AID TO HOUSING---- INTRODUCTION.

11

1. Building directly, for rental or sale.
(a) For Government's own employees—
National, as in Austria, Germany, Hungary, and Roumania.
State or provincial, as in Germany, Switzerland, and
Roumania.
Municipal, as in Germany, Hungary, and Roumania.
(b) For working people generally, as in France, Germany,
Great Britain, Italy, Australia, and New Zealand.
2. Making loans of public funds (including also Government
guaranty of loans) to—
(а) Local authorities, as in Austria, Belgium, Denmark,
Germany, Great Britain, Hungary, Luxemburg, Swe­
den, and Norway.
(б) Noncommercial building associations, as in Austria,
Belgium (by savings bank whose deposits are guaran­
teed), Denmark, France, Germany, Great Britain,
Italy, Luxemburg, Netherlands, Sweden, and Norway.
(c) Employers, as in Germany, Great Britain, and Luxem­
burg.
(d) Individuals, as in Germany, Great Britain, Australia, New
Zealand, and Norway.
3. Granting exemptions from or concessions in taxes or fees or
granting some other form of subsidy to building associations or others,
as in Austria, Belgium, France, Germany, Italy, Hungary, Roumania,
Spain, Switzerland, Australia, and New Zealand.
It should be noted that classed under the loans of public funds are
the loans which have been made of the funds of the State accident
and sickness insurance associations in Austria and of the funds of the
invalidity and old-age insurance institutes in France and in Germany.
These loans in Germany represent the most important financial aid
to housing anywhere developed, having reached a total of over
$118,000,000.
LOANS OF PUBLIC FUNDS TO PUBLIC-WELFARE BUILDING ASSOCIA­
TIONS.

By these various methods European countries have expended mil­
lions of public funds to aid in the erection of low-cost and sanitary
dwellings for wage earners. Most important among these methods
of aid is that of loans to public-welfare building associations. These
are associations in which the dividends which may be paid to the
stockholders are limited usually to 4, or at most 5, per cent on the
paid-up capital. In many cases it is also required that upon the
dissolution of the association any surplus which may exist shall not
be divided among the stockholders but must go to some specified
public purpose.



12

BULLETIN OF THE BUREAU OF LABOE STATISTICS.

In continental European countries, where building associations
operating under the various housing laws have attained the greatest
growth, as in Belgium, France, Germany, Italy, and Austria, their
operations are hedged about by many regulations and restrictions
whose principal objects are to safeguard the security of the capital
and to see that all the dwellings erected with the funds advanced
are of a kind designed to carry out the purposes of the law and that
they are so managed that their benefits will be received by the class
of persons intended to be served. Such regulations may require
that the authority advancing money pass upon the by-laws of the
association, examine at any time its financial operations and con­
dition, pass upon the details of land purchase, plans and specifi­
cations of buildings to be erected, estimates of cost, sale price or
rental, and income. Proper use and maintenance of rented build­
ings may be assured by the right to approve rentals, to inspect the
buildings, and to enforce repairs. The funds are usually advanced
to the building association which builds for sale or rental to its own
members, or acts as an intermediary, loaning the money for the pur­
pose of building or for purchase.
SLUM CLEARANCES AND REHOUSING IN GREAT BRITAIN.

Probably next in importance in the work in the interest of
improved housing are the clearance schemes under the Housing of
the Working Classes Act, 1890, and the Housing and Town Plan­
ning Act, 1909, which municipalities have been carrying on in
Great Britain. In these schemes the municipal authorities have
undertaken the purchase and clearance of insanitary slum areas
in cities and the laying out of new streets and lots and the erection
of sanitary dwellings to rehouse the tenants displaced by the
improvements. London has been the leader in work of this char­
acter, the cost of its clearance schemes sanctioned by the Local
Government Board from 1890 to 1913 amounting to over $5,000,000.
Many other municipalities have also undertaken housing schemes of
the same character, the total loans by the Public Works Loan Board
approved for such purposes between 1890 and 1913 being $13,171,601.
BENEFITS FROM SANITARY HOUSING.

It is often claimed in general terms for these housing schemes
that they improve sanitary conditions and thus benefit large areas
and even the entire community. The best indication of such results
in one direction is in the notable reduction in death rates in the
areas covered under these clearance schemes when compared with
the death rates in the same areas under their former insanitary con­
ditions and with the same groups of tenants. Thus, in Liverpool,
according to the report of the British Local Government Board,



GOVERNMENT AID TO HOUSING---- INTRODUCTION.

13

in some of the slum areas which have been the subject of clearance
schemes and where displaced tenants have been rehoused upon the
same areas, a death rate ranging from 40 to 60 per 1,000 (with a
death rate from phthisis of 4 per 1,000) has, by the improved sani­
tary conditions brought about, been reduced by more than one-half
(the death rate from phthisis being correspondingly reduced).1
In the face of such results as these— and similar results may be
found in other cities— it is perhaps not to be wondered at that those
who are active in promoting housing reform sometimes reply with
some impatience when it is pointed out that the municipal schemes
returning less than 3 per cent do not pay.
In the pages following are given for the countries most active in
housing reform summaries showing the forms in which public aid
has been given and the extent of the operations, so far as ascer­
tainable. These summaries are followed by more detailed statements
for each country, giving the particulars of legislation, methods of the
administration of the laws, and extent and success of operations
of various kinds where public aid in any form has been granted.
The material upon which this report is based is found in various
official and nonofficial reports to which reference is made in the
proper places.2
SUMMARY OF HOUSING WORK IN COUNTRIES WHERE GOVERNMENT
AID HAS BEEN MOST IMPORTANT.
AUSTRIA.

In Austria housing activity has manifested itself chiefly in three
forms:
1. By the creation by law of a State housing fund in 1910, endowed
by the State for the improvement of the housing conditions of per­
sons of small means, with the purpose of making direct loans up to
20 per cent of its available funds to districts, communes, etc., and to
public-welfare building associations for the erection of workmen’s
dwellings or of acting as guarantor for second mortgages up to 90
per cent of the value of the property;
2. By tax concessions or exemptions in favor of healthful or lowcost dwellings built by communes on public authorization, by work­
men’s cooperative societies for their members, by employers for their
workmen, and by public-welfare building associations;
3. By the State and the municipalities also engaging in building
houses for their own employees and making loans to public-welfare
building associations. The special form of aid to housing is given
in loans by the State insurance funds.
1 Forty-second Annual Report of the Local Government Board, 1912-13, P t. I I, Housing and Town
Planning, p. xxii.
2 Attention m ay be called here to the recent first annual report of the Massachusetts Homestead Com­
mission (1914, Public Document N o. 103), which covers in a more general manner the field of this report,
and includes a survey of State aid to agricultural laborers and farmers in securing homesteads.




14

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

The amount of the Government endowment of the State housing
fund as fixed by law is 25,000,000 crowns ($5,075,000), to be made
available during the years 1911 to 1921, inclusive, in yearly amounts
ranging from about $300,000 to $800,000. A public-welfare building
association which serves as an intermediary in most of the housing
loans as defined in the law is one which limits its dividend to 5 per
per cent of the paid-up shares, and in case of dissolution refunds to
its members only the paid-up capital, devoting any remaining balance
to public-welfare purposes. At the end of April, 1913, the direct
loans of the State housing fund amounted to about $165,000. Up
to the same date the fund had guaranteed loans and advances
amounting to about $2,735,000.
At the end of 1912 there were 634 public-welfare building associa­
tions in the Empire, the associations having increased to this number
from 336 in existence at the end of 1910. This rapid growth is due
to the organization of the State insurance fund authorized by the
law of 1910. An investigation made at the end of 1912 showed, for
405 associations reporting, capital invested in buildings and building
lots amounting to $12,967,640.
For the work of the State as employer the Government first appro­
priated in 1907 4,000,000 crowns ($812,000). A further amount of
1,000,000 crowns ($203,000) was provided for a special fund for work­
men in State salt mines. The State also provides service dwellings
for some of its officials and employees in nearly all branches of admin­
istration. As an industrial employer it has done extensive housing
work for the employees of State railroads, tobacco factories, and salt
mines. At the end of 1912 the administration of State railroads had
built houses at a cost of $5,022,423 and had in process of erection
houses estimated to cost $1,048,292. These houses are for rental to
employees of the State railroads, preference being given to members
of building associations of such employees. Renters are prohibited
from keeping lodgers or roomers. A large number of the munici­
palities in Austria have built dwellings especially for their own em­
ployees. A number of cities have also made loans for the erection
of dwellings for the general working population. The cities most
active in this work have been Vienna, Trieste, Olmiitz in Moravia,
Prague, Roveredo in Tyrol, and Villach in Carinthia.
The carriers of the State social insurance (the accident insurance
institutes and sick funds) assist in housing work by the erection of
dwellings and the issuing of loans to public-welfare building associa­
tions. The report for the year 1910 shows an investment in lands
and buildings of $732,000. The net income on these properties
ranged from 3.32 to 4.22 per cent, in most cases reaching 4 per cent.
The amount of mortgage loans for workmen’s dwellings was $216,914.
All the loans have been made at 4 and 4| per cent.



GOVERNMENT AID TO HOUSING---- INTRODUCTION.

15

BELGIUM.

To Belgium belongs the credit of being one of the pioneers in the
housing movement through State intervention. Its act of August 9,
1889, though not the first in order of date, originated some novel fea­
tures and has served as a model for later laws, particularly the French
and Italian legislation. There are three distinct parts to the law: (1)
Creation of committees of patronage; (2) loaning of money by the
General Savings Bank; (3) institution of life insurance in connection
with the repayment of loans by individual borrowers. It also accords
to associations of workmen who build or purchase low-cost dwellings,
as well as to the committees of patronage, certain exemptions from
stamp taxes, registration, transfer, and mortgage fees.
The duties of the committees of patronage, as set forth in the law,
are: (1) To encourage the building and letting of workmen's sanitary
dwellings and their sale to workmen, either for cash or by annual
payments; (2) to study the sanitary conditions of workmen's dwell­
ings and the hygiene of their location ; (3) to encourage thrift and life
insurance, and also to promote the formation of loan and mutualbenefit societies and pension funds.
The most important feature of the law is the authorization to the
General Savings Bank, a semiofficial institution whose deposits the
Government guarantees, to loan a part of its reserve at a reduced rate
to encourage the proprietorship of homes among working people.
The amount that the bank could so loan at a reduced rate was
originally limited to 5 per cent of its total loans, but in 1901 this
limit was raised to 7^ per cent.
Although the law did not contemplate that the General Savings
Bank should make loans to Provinces, communes, or charitable and
relief institutions, yet it authorized these to accept gifts and legacies
for the construction of workmen's dwellings. The privilege of raising
loans for the purposes of the act was extended to Provinces and com­
munes in 1891.
The loans from the savings bank are made only through an inter­
mediary. Four different kinds of associations under the law are en­
titled to obtain these loans, namely, joint stock and cooperative loan
companies and joint stock and cooperative building companies. The
General Savings Bank, with the sanction of the minister of finance,
determines the rate of interest on these loans. These associations in
turn make loans to individual workers desirous of purchasing homes.
The rate of interest to borrowing companies, as fixed by the Gen­
eral Savings Bank, was, until 1899, 2\ per cent for the loan companies
and 3 per cent for the building associations. In 1899 rates were
generally raised to 3 per cent for loan companies and 3J per cent for
building associations.




16

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

Repayment of advances is made according to separate agreement
in each case. The term of repayment is 10, 15, 20, or 25 years as a rule.
The loan companies, in order to receive loans from the bank, were
originally required to give assurance of their philanthropic purposes
by limiting their dividends to 3 per cent. This limit was in 1908
raised to 3| per cent if one-half or over of their capital stock was
paid in, and if all was paid in, the bank might increase it to 4 per
cent. These provisions do not apply to building associations. The
loan companies are subject to the inspection and approval of the local
patronage committees.
There is no definite or fixed maximum or minimum established in
the law as to the amount of loans the General Savings Bank may
make to the borrowing companies. Two general factors determine
the limits of loans: (1) The amount of subscribed capital not paid in,
and (2) the value of the land and security offered. To the loan com­
panies, if joint stock companies, advances may be made equal to onehalf of the capital stock subscribed and not paid in, plus a sum equal
to one-half of the value of the real estate owned, plus an amount
equal to 60 per cent of the property held by the company on mort­
gage of borrowers who are not protected by life insurance, or 70 per
cent of its value if borrowers’ payments are protected by life insur­
ance. The advances to building companies may be made only to an
amount equal to 50 per cent of the value of the real estate belonging
to the company.
Since the law of 1889 became effective, up to December 31, 1912,
the General Savings Bank had advanced more than 103,000,000 francs
($19,879,000) to workmen’s dwellings associations, permitting the
building of about 57,500 houses. On December 31, 1912, the number
of these associations having loan contracts with the General Savings
Bank was 176. The total amount of operations by 175 of these asso­
ciations from their formation to December 31, 1910, reached 138,000,000 francs ($26,634,000). On December 31, 1912, 167 stock com­
panies (131 loan companies and 36 building associations), which do
the bulk of the housing work, owed to the General Savings Bank about
39,134,000 francs ($17,203,000).
DENMARK.

In Denmark several laws have been enacted— the first in 1887 and
the most recent in 1914—intended (1) to aid cities by loans in the
clearance of congested areas and the erection of sanitary houses for
the laboring population, and (2) to aid cities and building associa­
tions by loans in erecting individual laborers’ dwellings. The four
acts passed have provided for these purposes $1,742,000.
The most recent law requires the loans made to be secured by a
first mortgage; and they may not exceed two-thirds of the value of
the property as determined by the minister of finance after appraise­



GOVERNMENT AID TO HOUSING---- INTRODUCTION.

17

ment. Loans must be paid off at the rate of 4 per cent per annum,
of which 3 per cent is for interest and the remainder for reducing the
principal of the loan. Building associations wishing to take advan­
tage of the law must submit annual reports of their operations to
the minister of finance.
Special facilities have existed since 1899 for the purchase of small
holdings. For this purpose the State had advanced $9,013,912 up
to March 31, 1914.
FRANCE.

French housing legislation is very similar in its provisions to the
Belgian and Italian laws, in that it recognizes and promotes concur­
rently (1) private initiative by the organization of committees of
patronage and by exemption from taxes and by authorizing institu­
tions, charitable organizations, hospitals, and savings banks to place
their funds in the building of low-cost dwellings; (2) communal initia­
tive by enabling communes, when especially authorized, to build
directly apartment houses for large families, and for this purpose to
secure loans under the same conditions as associations; (3) the estab­
lishment of public bureaus of low-cost dwellings (communal, intercommunal, and departmental), consisting of public establishments having
for their exclusive object the clearing of the land, the building and
management of healthful dwellings, as well as the sanitation of dwell­
ings already built, and the establishment of city or workmen’s gar­
dens. These bureaus are classed with building associations and may
utilize resources derived from (1) donations by communes or Depart­
ments, gifts, and legacies; (2) loans made by the communes, by the
Bank of Deposits, savings banks, etc. French legislation makes use
of the principle of life insurance to guarantee the repayment of
loans in a manner similar to that provided for by the Belgian law.
Probably the most important feature of the French law is the
authorization of the Bank of Deposits (Caisse des depots et consigna­
tions), a Government institution, to make loans to building and loan
associations, and of the National Old-Age Retirement Fund to make
advances to the real estate loan companies, for the construction of
low-cost workmen’s dwellings. These dwellings may be constructed
either for sale or for rent. Employers may construct them for their
employees, but chiefly the work is carried on by building associations
and real estate loan companies. These associations are divided into
two classes, stock companies and cooperative societies. In stock
companies the renters or purchasers are not necessarily shareholders,
and in reality are never such. Companies are established by capi­
talists who desire to assist in a philanthropic and social undertaking
and sire satisfied with a moderate profit. Under the cooperative
societies the stockholders are the actual owners of the dwellings con­
structed by this plan. Whatever the form of organization, how66171°— Bull. 158— 15------ 2




18

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

ever, the business of the society is threefold: (1) Construction of
tenements for sale or rent, (2) construction of one-family houses for
sale or rent, (3) making advances to individuals who wish to build
their homes or purchase garden plots not over 2.47 acres in extent.
Those building and loan associations which desire to take advan­
tage of the privileges of the law must comply with certain conditions:
(1) Limit their dividends to 4 per cent, (2) submit their by-laws for
the approval of the authorities, (3) make an annual report to the
housing council, and (4) comply with certain rules in the event of
winding up their affairs.
The privileges which building and loan associations complying with
these requirements may have are as follows: (1) Tax exemptions of
three kinds are granted: (a) Stamp and registration fees on their
documents, shares, bonds, mortgages, etc.; (6) licenses and excise
taxes on their interest from securities; (c) inheritance taxes, but
only if they confine themselves to the construction and sale of low-cost
dwellings and not for rental purposes. Certain financial advantages
are also accorded, as follows: (1) Three sets of institutions are per­
mitted to purchase their shares— charitable institutions, municipali­
ties and Departments, and the savings banks. Charitable institutions
may invest their funds only on authorization of the local prefect, and
they may not own over two-thirds of the capital of any single insti­
tution, and their shares must all be paid in. They may not invest
over two-fifths of their assets in these building associations. Munici­
palities and Departments are subject to the same restrictions as char­
itable institutions in regard to the amount of shares they may hold
in any building association. Savings banks may devote, under vari­
ous forms, one-half their own means to housing projects, under the
restriction that the sum of these investments added to the cost price
of their real estate holdings may not exceed 70 per cent of their own
means (fortune personelle) .
(2) Four classes of institutions are permitted to purchase the
bonds of building and loan associations, namely, the three above men­
tioned and the Bank of Deposits, a Government institution. This
latter may employ two-fifths of its reserves for this purpose.
(3) Ordinary loans may be made to the building and loan associa­
tions by charitable institutions, municipalities and Departments, and
by general savings banks provided they secure a mortgage guaranty.
(4) Municipalities and Departments may transfer land or buildings
to building and loan associations at a price not less than one-half
their value.
Loans to individual borrowers are made at rates of 3| and 4 per
cent interest. The principle of gradual amortization of loans in
periods of 10, 15, 20, or 25 years is adopted.
The effect of the French housing legislation is apparent from the
fact that on March 1, 1914, there were in existence in France 410



GOVERNMENT AID TO HOUSING---- INTRODUCTION.

19

building societies for low-cost dwellings, of which 258 were cooperative
and 152 were joint stock companies. These societies enjoyed fiscal
exemptions during the year to the amount of 903,360.68 francs
($174,348.61), and savings banks participated in housing work to
the extent of 18,037,703 francs ($3,481,276.68). From the Bank of
Deposits and the National Old-Age Retirement Fund advances have
been granted to the amount of 37,589,600 francs ($7,254,792.80), in
addition to sums received from the participation of charitable and
poor-relief institutions.
The number of dwellings which had benefited by the tax exemptions
in 1913 was 16,807 individual houses and 1,613 tenements having
11,848 apartments, or an average of 7.3 dwellings to each apartment.
These building and loan associations for low-cost dwellings and
individual owners of houses derived very substantial aid from the tax
exemptions which they received under the law. These exemptions,
which in 1912 amounted to $174,349, are made up of the following
items:
Land tax.......................................................................................................... $71, 588
Door and window tax.................................................................................. 61, 041
Inheritance tax.............................................................................................
28, 571
Licenses...........................................................................................................
6, 579
Stamp and registration dues.....................................................................
6, 570
Total..................................................................................................... 174,349
GERMANY.

In Germany where Government aid for the betterment of housing
of the working people has been given more largely probably than in
any other country, four agencies have been employed, using various
methods, the most important of which are the following:
1. The Empire:
(a) Houses built directly for rental to lower-paid Govern­
ment employees.
(b) Housing fund established for making loans to building
associations for workmen’s dwellings and for purchas­
ing land to be leased on long-time grants for building.
2. Individual States:
(a) Houses provided for lower-paid State officials and work­
men.
(b) Building loans and building premiums granted to State
officials and workmen,
(c) Houses built for rental to State officials and workmen
through housing fund.
(d) Loans for building associations and others through housing
fund.
(e) Exemptions from and concessions in taxes, fees, etc., on
workmen’s dwellings.



20

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

3. Invalidity and old-age insurance funds:
(a) Loans to communes, unions of communes, savings banks,
corporations, building associations, and employers, and
in some cases to employees.
4. Municipalities:
(a) Houses provided to be rented to municipal workmen.
(b) Houses erected for rental to the general working classes
and people of small means.
(c) Loans by cities to building associations for the erection o
workmen's dwellings.
The housing work of the Empire for rental to its own employees
has been quite extensive. In 1904 the amounts so invested were
shown to be in excess of $8,000,000. More important, however, is
the work of the housing fund established in 1901. Up to 1908 its
loans to 84 enterprises amounted to nearly $6,000,000. These enter­
prises had expended on land and buildings $27,335,259, having
erected 1,619 buildings with 7,856 apartments. In addition land
purchases had been made at a cost of $1,302,870.
Of the individual German States which have engaged in the work
of promotion of better housing, Prussia has been most active. Its
housing fund, established in 1895, had in 1911 reached a total in
excess of $34,000,000, its building operations and loans amounting
to $33,655,637. Of this amount there had been expended for direct
building for rental to State officials and workmen $17,269,562, in
loans to building associations for building $15,367,907, and in other
loans $1,018,168. In Prussia also building loans and building premi­
ums granted to industrial employees are important. For mining
employees, for example, loans amounting to $2,281,506, and building
premiums of $1,451,053 were reported at the end of 1910. These
were in connection with the provision of 8,353 houses with 17,799
apartments.
Most important of the funds for the promotion of better housing in
Germany are the invalidity and old-age institutes. Between 1891
and 1913 loans from this source amounte.d to $114,867,744.
An official investigation of the activities of German municipalities
made in 1909, covering cities with a population of 50,000 or more
and a few others, showed that 42 cities had provided houses to be
rented to municipal workmen, 15 cities had erected houses for rental
to the general working classes and people of small means, and 33
cities had made loans to building associations for the erection of
workmen’s dwellings. Of the 15 cities which had erected houses for
rental to the general working classes, 8 were in Prussia, 4 in AlsaceLorraine, 2 in Baden, 1 in Saxony. In this form of housing 5 cities
had been especially active, Freiburg, Miilhausen, Diisseldorf, Strassburg, and Essen. Among those cities most active in making loans



GOVERNMENT AID TO HOUSING---- INTRODUCTION.

21

to building associations were Berlin, Munich, Frankfort, Hamburg,
Posen, and Stuttgart. These loans for the most part have been made
at 3 and 3J per cent interest, although 4 per cent has been charged
in a considerable number of cases. The loan is often on a second
mortgage. Periods for repayment are allowed, in some cases even
up to 80 years. The building plans are usually subject to approval
and the use of the dwellings by working people of small means is
carefully safeguarded.
It will be seen that all of these agencies which have served as a
source of funds in aid of housing have worked through building asso­
ciations as the chief means for housing work. Between 1901 and 1911
the number of such associations in Germany rose from 466 to 1,167.
In 1911 the 645 associations from which detailed reports were avail­
able showed 14,144 buildings, including apartment buildings and small
houses, erected since their organization at a cost of $96,562,939. A
large part of the funds of these associations have been derived from
the loans made by the employer, the individual States, and the
insurance institutes.
GREAT BRITAIN.

In Great Britain Government activities in the interest of improved
housing are controlled by the housing and town planning act, 1909,
the latest of a series of housing acts. In this act Government aid is
provided for in three forms:
1. Large clearance schemes undertaken by local authorities in
insanitary areas, with rehousing of the displaced tenants;
2. Treatment of small slum areas and insanitary houses by local
authorities;
3. Providing new housing accommodation where needed, either
directly by the local authorities or by associations, corporations, and
private persons aided by loans of public funds from the Public Works
Loan Board.
This aid, according to the language of the act, was “ for the pur­
pose of construction or improving or of facilitating or encouraging
the construction or improvement of dwellings for the working classes.’ ’
As a means of giving this aid the law empowers the Public Works
Loan Commissioners to lend money to be used for erecting workingclass dwellings to public utility companies, private persons who either
own land in fee simple or have a lease or other claim upon it of which
50 years are still to run, and to societies or other organizations formed
for the purpose of constructing or improving dwellings for the work­
ing classes. Loans of this class may be secured by mortgages on
land or dwellings or both; where no other security is given the loan
may not exceed tw^o-thirds of the value of the property mortgaged
in the case of public utility companies and one-half in other cases.
The period for repajonent may extend to 80 years.




22

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

The slum clearance schemes in London under the various housing
acts have been in several instances on a large sc ale, and the schemes
undertaken between 1875 and 1913 cost over $13,000,000. The gross
rentals from the dwellings of the London County Council in the year
1912-13 amounted to $1,073,057. The total cost of the clearance
schemes in cities other than London is not known, but the official
reports show that the amount of loans sanctioned on account of such
work was in excess of $24,000,000.
The power which local authorities have to take action against
small slums and insanitary houses has not been largely used and has
not called for large expenditures. In London 16 schemes have been
undertaken at a cost of $1,030,978 and in Manchester 3 at a cost of
$169,885. A more important power, that of closing or requiring the
demolition of unhealthful houses, if the owners could not or would
not put them in proper condition, which was formerly difficult of
application, has been strengthened by amendments in the act of 1909
and has been found of great usefulness.
In the way of financial aid to improve housing the General Govern­
ment has made loans to both urban and rural local authorities, to phil­
anthropic and semiphilanthropic organizations, to building associa­
tions, and to private individuals. These loans up to March 31, 1913,
had amounted to $25,448,496, of which about one-half were to local
authorities and slightly less to associations, corporations, and private
persons. The loans in the last year were mostly at 3J per cent, the
remainder at 3f per cent. Of the loans to local authorities all but
about 4 per cent were to run 80 years, while the greater part of the
loans to associations, etc., run from 20 to 30 years.
The total loans to organized private enterprises 1891 to 1913 were
$7,076,530. Since the amendments in the law introduced by the act
of 1909 the amounts loaned annually have greatly increased— from
$327,477 in 1909 to $1,515,049 in 1913.
HUNGARY.

Housing legislation in Hungary is of very recent date. Several
early attempts to promote public-welfare housing work by means of
tax reductions for workmen's dwellings were complete failures. The
only law of practical effect was that of 1908. This law grants entire
exemption from the building tax to all dwellings newly erected in the
city of Budapest without regard to whether they are rented to work­
men or other renters. The houses remain exempt from the tax as
long as the income from rents does not exceed 4 per cent interest on
the cost of the ground, 6 per cent interest on the cost of the building
and the costs of maintenance and administration.
The city of Budapest which owns large areas of land suitable for
building purposes availed itself of the benefits of this law and in order




GOVERNMENT AID TO HOUSING---- INTRODUCTION.

23

to lessen the excessive scarcity of workmen’s dwellings voted nearly
$13,000,000 for the erection of such dwellings. Up to 1913 the city
built dwellings containing a total of 4,816 apartments, housing 22,481
persons, of whom 81.5 per cent were workingmen and their families,
electrical workers, etc.
The great scarcity of workmen’s dwellings in the capital caused
the enactment of the law of July 20, 1908, in which the ministry of
finance was authorized to build workmen’s dwellings at a maximum
total cost of approximately $2,000,000. These dwellings were to be
occupied primarily by workmen employed by the State and seconda­
rily by those in private employment. The result of the law is the
workmen’s colony at Kispest, a garden city, in which up to 1913
dwellings have been built that house 3,535 families with 18,000 per­
sons. The colony will ultimately house about 4,200 families.
Government aid for housing work was given not only to industrial
workers but also to agricultural workers who needed aid in this respect
still more than the former. Action was first taken in 1901 by the min­
istry of agriculture, which in the period 1901 to 1906 expended a total
of about $365,000 appropriated by Parliament for State subsidies to
workmen to aid them in acquiring their own homes. About 600 houses
were erected annually with the aid of these subsidies. This slow prog­
ress was not satisfactory to the Government, and therefore caused the
enactment of the law of 1907 (No. 46), which provided that a maxi­
mum aimual amount of $60,000 should be made available for subsidies
to be granted to communes to pay the interest and refund of loans
contracted by municipalities, communes, and authorized corporations
for the erection of dwellings for agricultural workmen. Each dwelling
under the act must be for one family only. About 6,000 dwellings
for agricultural workers in 23 districts and in over 200 communes
have been erected with the aid of such Government subsidies.
ITALY.

In Italy the legislation is intended to encourage the building and
acquisition of cheap dwellings for workmen by cooperative societies,
charitable associations, and mutual aid associations. When their
activities are not adequate the commune has authority to establish
a municipal bureau of cheap dwellings. In the first place, a number
of savings or loan associations 1 may consent to loans to building
associations at a rate not exceeding 4^ per cent, or may purchase
obligations or bonds issued by these associations. In order to par­
ticipate in these loans the associations must cause their by-laws to be
registered with the minister of commerce, and must not permit the
distribution of dividends in excess of 5 per cent on paid-up capital.
1 Savings funds, popular and cooperative loan banks, pawnbrokers, public charitable institutions, mutual
aid societies, insurance and tontine companies, national savings funds for invalidity and old age, and
real estate loan companies.




24

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

In addition, reductions in taxes (exemption from registration fees,
taxes on income, stocks, bonds, and loans, real estate and insurance
taxes) are granted to societies hnd employers who build dwellings for
their employees, and corporations and charitable associations pro­
viding cheap dwellings. The communes may themselves construct
workmen’s dwellings, when private initiative is not adequate. But
they must, first, submit to the referendum the question of adminis­
tration of workmen’s dwellings, and, second, rent these dwellings to
persons whose yearly incomes do not exceed 1,500 lire ($289.50).
Besides the direct management and private initiative the legislature
permits the formation of self-governing workmen’s dwellings or­
ganizations, empowered to receive from the communes which estab­
lish them the whole or a part of the capital appropriated for that
purpose, and empowered also to issue directly bonds of 50 and 100
lire ($9.65 and $19.30).
On the 1st of January, 1911, there were 558 societies and estab­
lishments for the building of workmen’s dwellings in operation,
divided as follows: Cooperative associations, 475; mutual aid socie­
ties, 19; self-governing institutions, 33; welfare associations, 6; mu­
nicipal offices, 25. On that date 237 communes in 55 Provinces oper­
ated cheap dwellings bureaus, of which 34 were in Milan, 17 in Flor­
ence, and 12 in Bologna.
Reports covering a little more than half of these organizations
showed paid-up capital of nearly $5,500,000. At the same time they
owned building sites valued at nearly $1,750,000, and completed build­
ings valued at more than $12,000,000. Furthermore, as measured
by the loans contracted by them, they were involved for an addi­
tional sum of nearly $5,000,000. The loans made by these organ­
izations are usually for a maximum period of 50 years, at rates varyng from 3J to 4£ per cent.
The total number of cheap dwellings for the people constructed
subject to the legal exemption of taxes, etc., at the beginning of 1911,
was 1,038. The Milan society had built, up to September 30, 1912,
52 apartment houses having 2,759 apartments, and 22 houses with
160 apartments.
The most recent data concerning the municipal management of
people’s dwellings show that in 18 communes where the building and
management of such dwellings has been undertaken, an expenditure
of $1,078,063 was involved. In addition, in 13 communes where the
building and operation of people’s dwellings is being carried on by a
system of independent management, the investment for building was
$1,006,148, almost the entire amount having been raised by loans
from the institutions authorized under the housing laws.




GOVERNMENT AID TO HOUSING---- INTRODUCTION.

25

NORWAY.

In Norway the law of June 9, 1903, in regard to loans on small
property holdings of workmen and their dwellings established a loan
bank with three branches under the guaranty of the State. The
capital of the bank, constituted out of State funds, was authorized
originally at 3,000,000 crowns ($804,000), and increased in 1912 to
10,000,000 crowns ($2,680,000). The bank is also authorized to raise
funds by the issue of bonds guaranteed by the State in a sum not to
exceed 60,000,000 crowns ($16,080,000).
The bank grants loans for two purposes: (1) For the purchase of
small holdings; (2) for the building, completion, or purchase of labor­
ers7 dwellings. The first kind of loan for the purchase of small farms
is made at 3J per cent maximum interest and upon the guaranty of
a commune, either to individuals without capital or to rural com­
munes for the purchase of land for subdivision into allotments for
laborers7 dwellings. The second type of loan for the erection of la­
borers’ dwellings is made at 4 per cent maximum interest and is in
all cases on the security of communal taxes.
Both classes of loans are payable in equal half-yearly installments.
For loans for the purchase of small holdings only interest payments
need be made for the first 5 years, and the payment of principal may
be extended over 42 years. In the case of loans for the erection of
workmen’s dwellings only interest is payable the first 2 years, and
repayments of principal may be extended to 28 years.
Since its organization up to June 30, 1913, the bank has made
22,600 loans, of which 13,140 were for the purchase of land holdings
and 9,460 for the building of homes. Somewhat over two-thirds of
those who have borrowed to build homes own their garden plots.
About one-third of the outstanding loans are for 1,000 crowns ($268)
or less; only about one-seventh exceeded 2,000 crowns ($536). The
outstanding loans on June 30, 1913, were approximately 32,000,000
crowns ($8,576,000).
SWEDEN.

In Sweden a royal decree of 1904 created a State fund to be avail­
able to lend to workingmen or others of small means for the pur­
chase of small holdings and for the building and completion or
purchase of laborers’ dwellings. Loans are made through inter­
mediary associations or employers. At present the maximum value
of a house purchased may not exceed approximately $1,072, while
that of a small holding and a house is not to exceed $1,876 or $2,144,
according as it is improved property or not. A purchaser of a small
holding must supply one-sixth of the purchase price, and of a house
one-fourth. Interest is charged at 3.6 per cent.




26

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

The total amount set aside for the five years 1905 to 1909 was
in round numbers $2,894,000, but proving inadequate it has grad­
ually been raised to $2,010,000 a year. During the year 1911, 1,096
small-holding loans, and 447 low-cost dwelling loans wsre made.
Public lands are also set aside in Sweden, and buildings and homes
for rental to those of small means are erected upon them. The
State also provides homes for many of its own employees on its canals
and railroads, the details of which do not lend themselves to a sum­
mary statement.
During the period 1871 to 1911 Stockholm advanced about
$1,206,000, by the aid of which 761 houses were constructed, con­
sisting of 1,728 apartments, each containing on the average one
room and a kitchen. Other cities in Sweden are doing similar work.
Attractive garden cities have also been created, although only one,
that of Solheim, has been really successful.
More recently (1907) Parliament prepared to aid companies desir­
ing to buy up large private estates to sell to those of small means or
to erect homes for them thereon. Loans are to be made by the
companies up to 80 per cent of the value of the security. Only the
small sum of approximately $540,000 has been voted for this purpose.
AUSTRALIA.

Although Australia is primarily an agricultural country, housing
loans to workers from State funds direct to borrowers have been in
force there since 1909. The legislation authorizing such loans is
State and not Commonwealth legislation. Five of the six States of
Australia have such laws. Queensland was the first State to inaugu­
rate the system in 1909, to be followed by South Australia and Victo­
ria in 1910, Western Australia in 1911, and New South Wales in 1912.
Besides making loans direct to individuals for the purchase of
homes, Western Australia and New South Wales provide for the
Government purchase of land or setting aside of Crown lands for
leasing to workers of small means and will build upon such land either
for purchase or rent.
The administration of the system is delegated to a special board
usually within the treasury department. Funds are generally raised
by the issue of bonds or by annual appropriation. In order to be
entitled to a loan a prospective borrower must show that he is a
wage-earner as determined by his income. Thus in Queensland the
maximum earnings of a borrower are limited to about $973, in South
Australia to $1,460, and in Western Australia to $1,947.
The maximum amount loaned to an individual varies from $1,460
in Queensland to $4,867 in Victoria. The rate of interest is 4, 5, or 6
per cent, but may be reduced i per cent if payments are prompt.
The security is a first mortgage and the amount loaned is limited to




GOVERNMENT AID TO HOUSING---- INTRODUCTION.

27

from two-thirds to four-fifths of the value of the security. The terms
of loans range from 15 to 42 years with a privilege of anticipating re­
payments at any time. Loans are generally negotiated through the
post office.
The total amounts of loans advanced under the above acts in
each of the States indicated on the date specified stood as follows:
Queensland (June 30, 1913).........................................................................................
South Australia (June 30, 1912).............................................................................
Victoria (June 30, 1912)................................................................................................
Western Australia (January 31, 1912)......................................................................

$2, 933,000
1, 238, 000
3, 262, 000
620, 000

In South Australia the amount above did not include about $476,000
which the State had invested in purchasing homes for rental, nor did
it include $318,000 which had been borrowed in order to discharge
other mortgages.
Thus far New South Wales has been engaged only in setting aside
Crown lands and building houses thereon for rental to workmen. The
first project of this kind developed, the Dacey suburb, is situated
five miles from the center of the city of Sydney adjoining the suburb
of Kensington. The area of the suburb consists of approximately
336 acres. On June 30,1913, there had been completed 67 dwellings,
all of which had been rented. Twenty-two additional dwellings
were then in course of construction. The rents are reported from 15
to 20 per cent lower than those charged by private landlords for
similar accommodations in the suburbs. A glance at the occupa­
tions of those renting these houses would indicate that the semi­
skilled workmen are the ones who more commonly take advantage
of securing these houses.
As to the number of houses which have been constructed under
State loans in the other States of Australia the latest figures show that
in Queensland it was 1,837 (June 30, 1913) and in South Australia
1,193 (June 30, 1913). In Victoria the State Savings Bank had
actually in force 2,359 loans for the purchase of homes or small shops
in connection therewith, as is provided by the law of that State.
NEW ZEALAND.

Under the State advance acts (1908-1913) there may be loaned
for the purpose of purchasing or erecting a dwelling on a land allot­
ment a sum not to exceed approximately $2,200, such loan not to be
in excess of the value of the dwelling or house to be erected. The
security required is a first mortgage. The interest on the loan is
charged at a rate of 5 per cent and is reducible to 4| per cent if pay­
ments are prompt. Kepayments are made in equal annual install­
ments or semiannually, as desired. It is to be noted that a deposit
of only approximately $50 is required at the time of securing the
loan, together with a small valuation fee of about $2. Any person




28

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

desiring an advance may make his application to the post office or
to any representative of the valuation department. No professional
assistance is required and no charge is made for preparing the appli­
cation. The department has no agent authorized to act on its behalf
in this respect. A worker to be entitled to a loan must prove himself
to be engaged in manual or clerical work and in receipt of an income
of not over $973 per annum.
The total advances to workers up to March 31, 1913, including
moneys repaid and again advanced was approximately $11,000,000.
During the year 1912-13 alone there was advanced $2,186,000,
involving 1,321 loans.
The main purpose of the Workers7 Dwellings Act, 1910, which
supersedes an earlier act of 1905, is to set apart Crown lands or to
acquire private lands and to erect dwellings for workers thereon.
The purchase of a dwelling is effected by a deposit of about $50 and
the payment of the balance is distributed over a period of 25^ years
in equal annual installments. A C worker ” under the act is defined
i
as one whose earnings do not exceed about $850 per annum and who
is landless.
On March 31, 1913, the number of houses erected under the act
of 1905 was 126, while up to March 31, 1913, 138 dwellings had been
erected for purchasers under the 1910 act. The report of the super­
intendent administering the act indicates that the larger proportion
of the purchasers of homes under the act are ordinary laborers.
Arrangements have been made under the act with the Government
life insurance department by which any purchaser of a worker's
dwelling may insure his life for the amount that may be owing on his
dwelling at the time of his death, if such should occur before all of
his payments have been completed.
OTHER COUNTRIES.

A considerable number of other countries have been active in giving
public aid for the betterment of housing conditions. In no case,
however, is the work yet on a large scale nor are the details available
for this report of such length as to make their summarization in this
place necessary. The reader will find the significant details, as far
as available in published form, given in the body of this report. The
other countries covered are: Luxemburg, Netherlands, Roumania,
Spain, Switzerland, Canada, Cuba, and Chile.




AUSTRIA.1
INTRODUCTION.

As late as 1894 Prof. von Philippovich in his work on housing con­
ditions in Vienna had to make the statement that while in other
countries an extensive movement for a reform of housing conditions
had manifested itself, in Austria such a movement was hardly
noticeable.
A few earlier attempts to deal with the housing problem were
unsuccessful. The workmen’s housing law of 1892 was a complete
failure and was superseded by the law of 1902. The development of
building associations was very slow, and the provision of dwellings
by public-welfare organizations was, with the exception of dwellings
erected by employers for their workmen, essentially limited to the
model colony erected by the Emperor Francis Joseph I Jubilee Foun­
dation and the workmen’s dwellings of the accident insurance insti­
tutes.
Only since the foundation in 1907 of the Central Association for
Housing Reform in Austria (.Zentralstelle fu r Wohnungsreform in
Oesterreich) and the creation in 1908 of a department for housing
in the new Ministry of Public Works has the housing problem in Aus­
tria been handled in a systematic manner.
The reason for this may be found in the fact that the transition of
Austria from an agricultural to an industrial State is taking place by
slow steps and, as a consequence, Austria has not experienced such a
rapid urbanization as other countries.
This does not mean, however, that housing conditions are more
favorable in Austria than elsewhere. Complaints as to a scarcity
of dwellings and as to housing misery have been heard for decades
in Austria, and Austrian housing statistics show that these com­
plaints are only too well founded; but the acknowledgment that
objectionable housing conditions exist came very slowly.
1 There being no comprehensive official report on housing work in Austria in existence, the present
article has been based chiefly on the following papers submitted to the international housing congress of
1910 in Vienna and of 1913 at The Hague by members of the congress from Austria: “ Die Fortschritte des
Wohnungswesens in Oesterreich wahrend der letzten fiinf Jahre,” by Dr. E m il von Fiirth (Vienna);
“ Verbesserung und Beseitigung schlechter W ohnungen,” by Dr. A . J. Fuchs (Vienna); “ Die Wohnungsuberfullung in Oesterreich und die Massnahmen zu ihrer B ekam p fu ng/’ by Dr. Ferdinand llling; “ Stadterweiterungsrecht,” by Dr. Karl Brockhausen and Siegfried Sitte; and “ Die Entwicklung des Wohnungs­
wesens in Oesterreich wahrend der letzten Jahre,” by Dr. Ewald Pribram and Dr. Karl Forchheimer.
The first-named paper was submitted to the congress of 1910, the others to that of 1913.




30

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

A summary view of the housing conditions of the individual
localities may best be obtained by considering the density of housing,
i. e., by investigating how many occupants there are on an average
in these localities to each apartment (Wohnung). A computation as
to size and rent of apartments in localities with more than 10,000
inhabitants subject to the rent tax (.Hauszinssteuer) has shown that a
density of from 4 to 4.6 occupants per apartment is to be considered
as typical.1 These figures become still less satisfactory the larger
the percentage in a locality of one-room apartments and the more
frequent the apartments without kitchen, i. e., actual one-room
apartments. Of 92 localities included in the investigation, 33 had
over 70 per cent of apartments without any kitchen, 21 from 60 to 70
per cent, 16 from 50 to 60 per cent, and 22, 50 per cent.
Especially unfavorable conditions prevail in the Province of
Galicia, where the housing density in most of the cities is above the
average. Dangerous overcrowding of apartments is, however, also
to be found in many other localities outside of Galicia, above all in
the city of Pola, Province of Istria. Here, one-room apartments
form more than half of all the apartments, and each apartment is
occupied by an average of 6.4 persons. The mining towns of Moravia
(Karwin, Witkowitz, and Mahrisch-Ostrau), as well as the mountain
towns of Bohemia (Pribram, Kladno, Dux, and Kuttenberg) show
also an objectionable overcrowding of apartments. In those suburbs
of Prague which are prevailingly inhabited by workmen (Nusle,
Ziskow, and Wrschowitz) and in Koniginhof on the Elbe four persons
to an apartment are found in nearly one-half of all apartments consist­
ing of a single room, which as a rule serves also as a kitchen. Hous­
ing conditions in many communes of Bohemia, as, for instance, Asch,
Tabor, Nachod, Klattau, Kolin, Jungbunzlau, and Trautenau are not
much better. The percentage of one-room apartments without any
kitchen is in all of these localities relatively very large (40 to 50 per
cent).
In the seven cities of the first class, i. e., cities with more than
100,000 inhabitants, building activity was in the last decade gen­
erally inadequate, failing to keep up with the increase in population.
The natural consequence was a change for the worse in housing
conditions.
The rapid growth of industrial towns, such as Aussig, Gablonz,
Konigliche, Weinberge, Sankt Polten, Oderfurt, Nusle, and Wrscho­
witz caused a raising of rents in all these localities. During the last
decade, higher rents were also the rule in cities like Reichenberg,
Prague, Bielitz, Karolinenthal, Eger, Briinn, and Vienna, where the
increase in population was by no means so rapid.
1 Pribram, Karl, “ Die Wohnungsgrosse und Mietzinshohe in hauszinsstenerpflichtigen Orten Oesterreichs,” in Statistische Monatsschriften, Vol. X V I I , November 1912, Briinn.




GOVERNMENT AID TO HOUSING---- AUSTRIA.

31

How serious the stagnation of the building activity was in Vienna
during the last years (1905 to 1912) may be seen from the following
table:
B U IL D IN G

A C T IV IT Y IN V IE N N A D U R IN G T H E

Y E A R S 1905 T O 1912, IN C L U S I V E .

[Source: Mitteilungen der Zentralstelle fur Wohnungsreform N o. 24: “ Die Bautatigkeit in W ien im Jahre
1911,” by Ewald Pfibram.]

Year.

1905...................................................................
1906...................................................................
1907...................................................................
1908...................................................................
1909...................................................................
1910...................................................................
1911...................................................................
1912...................................................................

New
buildings
erected.

600
471
475
314
299
289
431
585

Apart­
ments in
these
buildings.

13,052
10,564
9,642
5,911
5,411
5,387
8,321
11,870

The above table shows that even in 1912 building activity in Vienna
had not entirely recovered from its stagnation. Rents were, as a con­
sequence, raised from 10 to 20 per cent. The percentage of vacant
apartments dropped far below the normal 3 per cent. In 1908 it was
only 1 per cent, but in October, 1911, it had according to official sta­
tistics sunk to 0.3 per cent. In the case of workmen’s dwellings
proper this ratio was still less favorable. In the following wards,
which are chiefly populated by workmen, the number of vacant
apartments was on October 31, 1911: In the X Ward 63 (0.18 per
cent), in the X V I Ward 54 (0.12 per cent), and in the X V II Ward
only 27 (0.10 per cent).
The rapid increase in rents has naturally caused a still more rapid
advance of the price of land, which in certain parts of Vienna has now
reached exorbitant figures. Hand in hand with this advance of land
values went a general increase in the prices of building material,
which during the last years was an attendant phenomenon of the
general increase in the cost of living. In individual communes the
increase in building costs during the last year is estimated at from
10 to 30 per cent.
In Reichenberg, a large industrial town of northern Bohemia, the
rate of increase in population has in the last decade been lower than
in the preceding one, as a large percentage of those employed in the
city have moved to the suburbs. Housing conditions have neverthe­
less become worse during the last decade. Lodgers were kept in 13.2
per cent of all apartments, and 17.2 per cent of the population lived
in apartments consisting of a single room. The number of one-room
apartments was 2,170, or 23.9 per cent of all apartments. A great
majority of these apartments must be considered as overcrowded,
as they were occupied by more than 3 persons.




32

BU LLETIN OF THE BUREAU OF LABOR STATISTICS.

The results of the last census of December 31, 1910, showed that
in Brunn among a total of 27,491 apartments 920 were one-room,
and 10,9*57 two-room apartments (kitchens not being counted as
rooms). Of these 11,877 apartments, 2,638 must be considered as
overcrowded, as 594 of the one-room apartments were occupied by
more than 3 persons, and 2,044 of the two-room apartments by more
than 6 persons. The report on the results of the census remarks also,
that new dwellings with small apartments had not been built in a
sufficient number and that consequently there was in Brunn a great
scarcity of small low-rent apartments.
Conditions in Linz, the capital of Upper Austria, are very similar.
Only 465 new buildings were erected within the city limits during
the period between 1900 and 1911, or about 39 buildings per year.
According to the census, Linz had at the end of 1910 a population of
67,817 inhabitants living in 2,826 houses, with about 16,000 apart­
ments. Over 50 per cent of these apartments consisted of only one
room with or without kitchen. Only 278 of all apartments, or 1.7
per cent, were vacant at the end of 1911.
If the data given above show the housing conditions of Austria in
a very unfavorable light, it must, on the other hand, be stated that
at the present date the importance of the housing problem has been
fully acknowledged and that Austria no longer faces this problem with
apathy. The public bodies, the State and the communes, as well as
the parties directly affected by the scarcity of dwellings are making
a concerted attempt to cooperate in the improvement of housing
conditions.
EXEMPTION FROM OR REDUCTION OF TAXES.

Up to very recent times all the encouragement given by the State
to the movement for the erection of sanitaiy low-rent dwellings for
working people consisted in the enactment of laws granting exemption
from or reduction of taxes on dwellings erected for such a purpose.
The first of these laws, enacted February 2, 1892 (R. G. Bl.
No. 37), granted exemption from taxes for a period of 24 years for
all newly erected workmen’s dwellings, so as to stimulate the erection
of such dwellings by communes, public-welfare associations, work­
men’s building associations, and employers. In addition to restric­
tions relating to the owners of such dwellings, the law also contained
a number of restrictions as to the persons to whom the dwellings were
to be rented, and especially as to the maximum permissible rate of
rent per square meter (10.8 square feet), which was set at such a low
figure that it excluded an economic investment of capital in sanitary
and substantially built workmen’s dwellings. The law required,
moreover, the issuing of a lease whereby in very numerous instances
in which employers granted to their workmen the free use of dwellings,



GOVERNMENT AID TO HOUSING---- AUSTRIA.

33

or d e d u c t e d a specified amount from the wages for rent, these dwell­
ings were deprived of the exemption from taxes or the exemption
applied merely to certain classes of taxes. As a consequence, the law
was of small practical benefit, and during the 10 years it was in effect
there are recorded only 360 instances of its application.
On July 8, 1902, this law was therefore replaced by a new one
(R. G. Bl. No. 144) which is also based on an entire or partial exemp­
tion from taxes. This is, however, the only point of similarity
between the old and the new law. The purpose of the law is to benefit
the renter, not the landlord, and to encourage the renter to become
ultimately the owner of the dwelling. To secure this purpose the law
contains a large number of detailed provisions, of which only the
most important are given below. The benefits of the law apply to
all new dwellings erected for the purpose of furnishing workmen
with sanitary, low-rent housing accommodations; the dwellings may
be rented to the workmen, or the use may be given them free of
charge, or for a charge not specified in the labor contract and deducted
from their wages. The privileges of the law are also applicable to
family houses ( Familienwohnhduser) erected by federated districts
(.Bezivksvevban&e), communes, welfare associations, foundations,
cooperative societies, and trade-unions, and by employers for their
own workmen, which are sold to workmen on the installment plan in
such a manner that the entire sale price, or at least half of it, is to be
paid in 15 annual payments without reference to whether the work­
man takes title immediately or subsequently.
Dwellings coming under this law are granted permanent exemption
from State taxation in its various forms and from all fees and stamp
taxes, provided that the Provinces in which they are located grant
by law an analogous total exemption from provincial taxes and
the communes at least a reduction of 50 per cent of communal taxes.
Associations which in accordance with their constitutions occupy
themselves with the erection and renting of workmen's dwellings are
in addition granted the same privileges as to industrial taxation as
cooperative societies. All the above-mentioned privileges are granted
only to buildings erected within 20 years from the date of the pro­
mulgation of the law.
CONDITIONS GOVERNING EXEMPTION.

To realize the ruling purpose of the law it was necessary to limit the
total rental of the favored buildings to a certain percentage of the
capital invested; within the limit of this total the landlord may fix
the rent of the separate apartments as he pleases. The law has the
difficult task of trying to harmonize the requirements of hygiene and
stability in construction with low rents, or, in other words, of making
66171°— B ull. 158— 15------ 3




34

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

the income from rent sufficiently high to attract capital waiting for
investment, and at the same time of providing sanitary dwellings at a
rent sufficiently low to correspond to the moderate income of workmen.
The law, therefore, provides that the total income yielded from the
rent of a building favored under the law shall not exceed a maximum
rate of interest on the amount invested; this rate is to be fixed at speci­
fied time intervals by ministerial decree, and shall not be more than
0.2 to 0.5 per cent in excess of the usual local interest rate for mort­
gage loans.
The term “ workman” in this law includes practically all persons
gainfully employed whose yearly income in the meaning of the personal
tax law of October 25, 1896, does not exceed the following amounts:
{a) In the case of single persons, 1,200 crowns ($243.60); (6) in the case
of families with from 2 to 4 members, 1,800 crowns ($365.40); and
(c) in the case of families with 5 or more members, 2,400 crowns
($487.20). For the city of Vienna these maximum amounts are to
be increased by one-fourth, and in other large cities with a population
in excess of 50,000 inhabitants by one-eighth. Apprentices are to
be considered as workmen without reference to their compensation.
Temporary unemployment does not disqualify workmen in the
meaning of the law. In case of permanent disability of the head
of a household, as well as in the case of a change in the head of the
household, or changes in the amount of his total income or in the
number of the members of his family, the authorities may permit
his continued occupancy of the dwelling. Employers as owners of
dwellings favored under this law are not bound by the above-given
maximum income of workmen, in so far as workmen in their own
establishments are concerned.
The privileges of the law are not forfeited: (a) If a part, not to
exceed one-fourth, of the habitable rooms of a house or of a group of
workmen's houses under the same administration is rented not to active
workmen but to disabled workmen or other persons drawing a pension
whose yearly income does not exceed the maximum amounts stipu­
lated in this law; (b) if individual rooms are given over to common
use as laundries, dining or reading rooms, libraries, etc.; (c) if indi­
vidual dwellings or rooms are assigned to persons charged with the
administration or supervision of the building; and (d) if individual
parts of the building are rented to owners, lessees, or representatives
for the exercise of trades which by the police authorities are deemed
necessary for the supply of the renters with provisions. The law
prohibits, however, selling distilled liquors at retail in such favored
buildings.
Buildings entitled to the benefits of the law may be constructed
either as family houses, homes for unmarried persons (Ledigenheime) ,
or lodging houses.




GOVERNMENT AID TO HOUSING— AUSTRIA.

35

Family houses may be constructed to house one or more families.
As a rule they must not house more than six families, or, if higher
than one story, must not have more than three stories above the
ground floor and on each floor not more than four flats to a stair­
case. Family houses which are to be sold to the occupiers on the
installment plan may not house more than two families. Work­
men’s dwellings situated in large cities and planned to house a large
number of families must be equipped with a sufficient number of
stairs, separate laundries, privies, cellars, attics, etc., so as to comply
with the requirements of personal safety and hygiene and at the
same time give the individual families sufficient privacy. The gen­
eral rule is that in such dwellings there may not be more than four
flats to each stairway and floor; this rule is sometimes modified, but
under no conditions may there be more than six. Renters of flats
in family houses are ordinarily prohibited from taking in roomers or
lodgers. In large family houses, however, perfectly separated rooms
may be rented to single persons. In family houses favored under
this law and sold on the installment plan flats may be rented only
to workers.
The privileges of this law are applicable only to family houses in
which the floor space of the habitable rooms (living rooms, sleeping
rooms, and kitchens) in case of one-room flats is not less than 16
square meters (172 square feet) and not more than 25 square meters
(269 square feet), of two-room flats not less than 20 square meters
(215 square feet) and not more than 35 square meters (377 square
feet), and in the case of flats with 3 or more rooms not less than 30
square meters (323 square feet) and not more than 80 square meters
(861 square feet), and which correspond to the regulations to be
issued by ministerial decree.
Homes for unmarried persons are designed to house individuals
of the same sex in separate rooms. If unattached persons of dif­
ferent sex are housed in the same building they must be in rooms
which are perfectly separated. In such homes the rooms may be
designed for from one to three persons, preferably one, but no room
may be occupied by more than three. The floor space in such homes
must be in rooms occupied by one person at least 8 square meters
(86 square feet), in rooms for two persons at least 12 square meters
(129 square feet), and in rooms for three persons at least 20 square
meters (215 square feet), and the homes must in all requirements
correspond to the regulations to be issued by ministerial decree.
Lodging houses (ScMaf- und Logierhduser) designed for the lodging
in common of unattached persons of the same sex may be favored
under this law only if erected either by employers for their own
workmen or by unions of districts, communes, public-welfare asso­




36

BULLETIN OE THE BUREAU OF LABOR STATISTICS.

ciations, foundations, cooperative societies, trade-unions, institutions,
and associations which, according to their constitutions, occupy
themselves with the erection of workmen’s homes and are subject
to public supervision.
ADMINISTRATION DECREE OF JANUARY 7, 1903.

The law authorizes the ministers of the interior and finance, in
conjunction with the ministers of commerce, railroads, and agricul­
ture, to issue decrees regulating the construction, equipment, and
administration of buildings favored under this law, as well as their
provision with light, air* and water, and determining the principles to
be observed to avoid overcrowding or the use oi such buildings for
purposes contrary to moral or hygienic considerations. Such a decree
was issued under date of January 7, 1903 (R. G. Bl., No. 6).
STIPULATIONS IN CONTRACT OF SALE.

If buildings favored under this law are sold to workmen on the
installment plan, their selling price may not exceed the original cost
of the ground, construction, and equipment. The interest charged in
computing the annual payments may not exceed that charged by
savings banks and other standard credit institutions for mortgage
loans, and the annual installments must be so determined that in each
of them at least 1 per cent of the selling price is paid off. The owner
must in such cases submit to the political authorities for their approval
a draft of the contract of sale, which, in addition to the general legal
requirements, must state: (a) The date on which the purchaser may
take possession of the building; (b) whether transfer of title is to take
place immediately or at a later date, which is to be stated precisely
and which may not be later than three years after the conclusion of
the contract; (c) whether in case of deferment of transfer of title
there are any lease relations between seller and purchaser; (d) if
transfer of title is deferred, that the purchaser has the right to forbid
the sale or mortgaging of the building.
The seller may reserve the right, in case the purchaser is at least
two quarters in arrears with the payment of installments or taxes or
has failed to insure the building against fire, to foreclose on giving
six months’ notice if title has been transferred, or to rescind the con­
tract on two weeks’ notice if the transfer of title has not taken place.
In those instances where the seller is entitled to foreclosure he may
also reserve the right of repurchase. When the right to rescind is
reserved, the contract must contain provisions safeguarding the claim
of the purchaser to refund of payments made on the sale price or of
other expenditures. Reservation of the right to rescind the contract,
to foreclose, and to repurchase are in all other instances prohibited.
The seller must reserve for himself for a period of 50 years the right of




GOVERNMENT AID TO HOUSING---- AUSTRIA.

37

refusal and in case of a judicial sale must be specially notified. The
exercise of the right of refusal and repurchase must be based on the
original sale price, and installments paid on the sale price must be
returned to the purchaser. The contract must contain special pro­
visions relating to the refund of expenditures made for improvements
and to deductions for a possible diminution of the value of the build­
ing and must prescribe that in case the purchaser lets the building or
individual apartments in it the rent may not exceed the amount
stipulated by this law.
The owner of a building favored under this law must post in a con­
spicuous place at the entrance to the building a schedule of the rents
of all flats in the building and a set of house rules. The house rules
and the rent schedule must be approved by the local, political, and
tax authorities; the rent schedule must include the renting value of
those flats the use cf which is granted to workmen free of charge or
for a charge not specified in the labor contract and deducted from
the wages. Notice to vacate in all instances in the case of family
houses, including those furnished by employers to their workmen,
must be given at least eight days in advance, and this provision is to
be included in the house rules.
The granting of the privileges of this law for a building involves the
dedication ( Widmung) of the building for a period of 50 years to work­
men’s housing and welfare purposes and obligates the builder, as well
as each later owner of the building, to its maintenance according to
the requirements of this law and to the provisions issued in pursuance
thereof. The dedication with annotation of its duration must be
entered in the real estate register as a first lien of the State. If there
are any mortgages which are superior as liens to this dedication, the
granting of the privileges of this law is conditional on the waiving by
the owners of these mortgages of the superiority of their claims.
The law provides penalties in case buildings devoted to workmen’s
housing purposes are used for other purposes or if higher rentals than
those legally permissible are collected.
RESULTS OF TAX EXEMPTION AND REDUCTION.

Although the law of 1902 was generally considered practicable, it
did not produce the results anticipated. Of a total of 1,266 applica­
tions for exemption from taxes received during the years 1902 to 1908,
inclusive, only 498 were approved. The results were more satisfac­
tory in 1909, when exemption from taxes was granted in 339 instances
out of a total of 738 applications, and were still better in 1910, when
459 applications out of a total of 741 w^ere approved. Of the appli­
cations approved in 1909 and 1910 there were, however, only 3 from
building associations and 10 from communes, while all the rest were
from employers for dwellings erected by them for the housing of their




38

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

employees. The law failed in its main purpose, that of inducing pri­
vate capital to invest in workmen’s dwellings. The restrictions as to
the rents to be charged and renters to be benefited were too great to
make such investment sufficiently remunerative for private capital.
Especially the limitation of the benefits of the law to renters who are
active workmen and have an income not exceeding a specified amount,
which was set too low, excluded from the benefits of the law very
large classes who, although not workmen in the meaning of this law,
suffer in the same manner from the scarcity of available low-rent
dwellings.
Nevertheless the importance of housing legislation in the form of
tax. exemptions or reductions should not be underestimated in the
case of Austria. Attempts to promote building activity by means
of tax exemptions are not a novelty in Austria. All new buildings
and additions to buildings have for a long time enjoyed a so-called
exemption from taxes for 12 years. This exemption is, however,
merely an extensive reduction of taxes. The influence which these
measures exercise upon building activity is easily understood if one
considers how high the tax (Hauszinssteuer) which is levied on all
apartments rented and in some localities on all dwellings, whether
occupied by the owner himself or rented wholly or in part, is in
Austria. In Vienna, for instance, together with the communal taxes
it amounts to 41.20 crowns ($8.36) on each 100 crowns ($20.30) of rent;
in most large communes the communal taxes are, however, higher
than in Vienna, and the percentage of rent devoted to taxes is,
therefore, correspondingly larger.
As it had again and again been pointed out how heavy a burden
this high tax was on the rent, as well as how it tended to diminish the
provision of dwellings, and as demands for its reduction in the inter­
est of promotion of better housing conditions had repeatedly been
made, the revision of the rent tax was for a long time an object of
study by the Government and by housing reformers alike. The
results of these studies and of a special investigation made in 1903
led to the following conclusions: (1) That the high rent tax does not
manifest itself exclusively in an upward tendency of rent rates, but,
in many instances, in the keeping of land prices at a low level, and
(2) that a general reduction of the rent tax at the present time would
not bring about lower rents, but rather produce an increase in the
value of land and dwellings.
REFORMS SUGGESTED.

Nevertheless, in consideration of the general public demand, two
bills brought in by the Government in 1908 and 1909, with the
object of a reform of the taxes on improved real estate, provided for
a reduction of the rent tax on dwellings, on the one hand, and for a




39

GOVERNMENT AID TO HOUSING---- AUSTRIA.

lessening of the number of years during which new buildings were to
be exempt from taxes, on the other. Both bills failed of enactment
by Parliament partly for political reasons and partly because va­
rious provisions of the bills, especially concerning the taxation of
dwellings in rural districts and of factory buildings, encountered
strong opposition.
That part of the problem of taxation which concerns the housing
policy of the Government was solved by the law of December 28,
1911, submitted to Parliament by the minister of finance. Inasmuch
as a reduction of taxes applicable to existing dwellings would not
benefit the renters, but merely the landlords, and since a greater
building activity and consequently a greater supply of dwellings
could be brought about by a reduction of taxes for newly erected
buildings and additions to existing buildings which would induce
investment of private capital in the erection of new dwellings, the
law reduced the rent tax only for newly erected buildings. The law
went still further in its plan of promoting housing reform by pro­
viding an even lower tariff for new dwellings containing exclusively
small apartments. The committee on the high cost of living of the
Lower House, in discussing the bill, added a third specially reduced
tariff applicable to dwellings with exclusively small apartments which
are erected by public-welfare building associations. The rates of
taxation according to the above law are shown in the following
table:
RATES

OF

S T A T E T A X E S L E V I E D ON D W E L L I N G S IN V A R IO U S L O C A L IT IE S IN
A U S T R IA IN A C C O R D A N C E W I T H T H E L A W OF D EC . 28, 1911.

[Source: X m Congres International des Habitations a Bon March< . La Haye-Scheveningue septembre,
e
5
1913. Rapports. Rotterdam [1913]. Part 3, p. 9.]
-<r

■
Rates applicable to newly erected
dwellings in per cent of net rent.

Locality.

V ienna and the provincial capitals.................................
A ll other localities with the exception of those in
Tyrol and Vorarlberg......................................................
Tyrol and Vorarlberg with the exception of Inns­
bruck .......................................................................................

Former rates
of rent tax
now appli­
cable to all
dwellings
existing at
the coming
in force of
the law.

23*

General
(tariff A ).

19

Dwellings
Dwellings
with exclu­
with ex­
sively small
clusively
apartments
small
erected by
apartments public-wel­
(tariff B ). fare building
associations
(tariff C).

17

15

17*

15

13*

12

13|

12

Hi

10*

The law of December 28, 1911, in addition to granting to publicwelfare building associations a considerable reduction of the rent tax
favored them also with respect to other taxes, as, for instance, the
industrial tax and the transfer tax, the latter of which is very high in
Austria. Building associations are especially benefited by this pro­




40

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

vision in the acquisition of land for building purposes. In the case of
family houses sold by the associations to their members, this privilege
is, however, partly offset by the fact that the transfer tax must be
paid twice, first at the acquisition of the building land by the asso­
ciation and afterwards at the transfer of the house to the member of
the association. Attempts to avoid this double taxation have so far
been unsuccessful.
STATE HOUSING FUND.

The desire to promote the erection of dwellings with small apart­
ments, and especially of those erected by public-welfare building assotions, expressed in the above laws, dominates also all other Austrian
housing legislation. We find the same principle ruling in the law
providing for the creation of a State housing fund, established for the
purpose of facilitating the financing of the public-welfare building
activity.
The plan for the creation of a State housing fund originated in 1909
with the Central Association for Housing Reform (Zentralstelle fu r
Wohnungsreform) in close connection with the proposed reform of the
tax on buildings. The association proposed that part of the income
of the State from the rent tax be used for the creation of a housing
fund. In accordance with this suggestion, the Government in 1909
included in its bill relating to a reform of the tax on buildings a
plan for a housing fund prepared in the department for housing in
the ministry of public works.
The bill for a reform of the tax on buildings even at the present
date has not been disposed of in its entirety. Meanwhile it became
more and more difficult for persons of moderate meafts to secure suit­
able low-rent housing accommodations. Especially in large cities,
above all in Vienna, the scarcity of dwellings became so acute that
remedial legislative action became imperative. The plan for a
housing fund was, therefore, made the subject of an independent
motion in the parliamentary committee on the high cost of living by
Representatives Gross and Reumajin. From this motion originated
the law of December 22, 1910 (R. G. Bl., No. 242), which created a
fund for the betterment of housing conditions of persons of small
means, and charged the ministries of public works and finance jointly
with the administration of the fund, and with the working out and
issuing of a set of by-laws for it. Such by-laws were issued by them
under date of June 14, 1911 (R. G. Bl., No. 113).
Differences between the Government, on the one hand, and the
committee on the high cost of living, on the other, as to the amount
with which the fund should be endowed— the Government intended
to endow the fund with 11,000,000 crowns ($2,233,000) and the par­
liamentary committee asked for 60,000,000 crowns ($12,180,000)—




41

GOVERNMENT AID TO HOUSING---- AUSTRIA.

were finally compromised. According to the law, the fund is endowed
by the State with 25,000,000 crowns ($5,075,000) to be made avail­
able during the years 1911 to 1921, inclusive, in the following manner:
For the years 1911 and 1912 ............................ .1,
For the year 1913................................................. .1,
For the year 1914................................................. .1,
For the year 1915............................ ......................2,
For the years 1916 to 1918, inclusive, each
year........................................................................2,
Far the years 1919 and 1920, each y e a r .. . . 3,
For the year 1921................................................. .4,

500,
300,
500,
200,

000
000
000
000

crowns
crowns
crowns
crowns

($304,
($263,
($304,
($446,

500)
900)
500)
600)

500, 000 crowns ($507, 500)
500, 000 crowns ($710, 500)
000, 000 crowns ($812, 000)

C O ND ITIO NS FOR GRANT OF LOANS.

The object of the fund is to grant financial aid to incorporated
administrative bodies (districts, communes, etc.) and to publicwelfare building associations (gemeinnutzige Bauvereine) for the erec­
tion of dwellings with small apartments ( Kleinwohnungen) and the
acquisition of sites for this purpose, the purchase of such dwellings,
the purchase of dwellings which are to be remodeled or reconstructed
as dwellings with small apartments, and finally for the redemption of
mortgages other than of the first rank, which are a lien on such
dwellings built by public-welfare building associations before the
coming in force of this law. The law considers as public-welfare
building associations those associations which, according to their
by-laws, limit their dividends to 5 per cent of the paid-up shares, and
in case of dissolution agree to refund to their members only the
paid-in capital and to contribute any remaining balance to publicwelfare purposes.
To administrative bodies and associations, which in accordance
with their by-laws are authorized to receive savings deposits, the
housing fund may extend financial aid only if their by-laws include
among their activities the erection of family houses to be sold to the
occupants, and if the acceptance of savings deposits is in the by-laws
subject to the following conditions:
1. Savings deposits may be received only on current account without
issuance of pass books, and must be restricted to those members who
intend to purchase houses erected or acquired by the corporation or
association.
2. Partial or entire withdrawal of savings deposits must be con­
ditional on at least half a year's notice.
3. One-half of the savings deposits received must be invested in
a manner permitting easy conversion of the investments into cash.
4. The rate of interest paid and the method of computing it must
be determined with consideration of the rates and methods in use at
local standard credit institutions; and




42

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

5.
The total amount of the deposits of an individual member may
not exceed the prospective purchase or cost price of one of the
dwellings to be sold.
The fund is to grant financial aid in the first place by assuming
guaranty for loans contracted by the above-named legal persons and
for the interest on such loans (indirect financial aid), and secondly
by direct loans (direct financial aid) to these legal persons.
The main purpose of the creation of the fund is to facilitate the
obtaining of mortgage loans on dwellings with small apartments
beyond the limit of 50 per cent of the appraised value which is
required as security for the legal investment of trust funds. With this
end in view, the law authorizes the fund either to make direct loans
or to act as guarantor for second mortgages up to 90 per cent of the
appraised value of the dwellings. The fund may also acquire the
buildings on which loans have been made, or the mortgages which
have been guaranteed by it, if this should be necessary to prevent
financial losses to the fund.
According to its by-laws the fund is to be administered by two
separate departments, a loan and a guaranty department. While
direct loans may be granted only up to the amount of 20 per cent of
the annual endowment of the fund, mortgages may be guaranteed to
a much larger amount by the fund. This amount varies according
to the cash available, but may not exceed 200,000,000 crowns
($40,600,000), up to which amount the State is liable in a subsidiary
manner. Loans which the fund guarantees are declared proper legal
investments for trust funds. New and ample sources of credit, such
as deposits in courts, orphans' funds, reserve funds of insurance
institutes, etc., in this manner become free for investment in work­
men's dwellings.
As dwellings with small apartments within the meaning of the law
are to be considered: (1) Family dwellings with apartments of a
maximum habitable floor space (rooms and kitchens) of 80 square
meters (861 square feet); (2) homes for single persons (.Ledigenheime)
with separated rooms for not more than 3 persons and a minimum air
space of 12 cubic meters (424 cubic feet) for each person; and (3)
lodging houses for the housing of unattached persons in common
dormitories with 4 square meters (43 square feet) floor space to each
person. If a house is also used for other purposes than the renting
of small apartments within the meaning of this law, then the total
floor space given over to small apartments must be at least twothirds of the total habitable floor space of the house. Rooms occu­
pied by small shops are, for this purpose, to be considered as small
apartments.
The fund may finance only 90 per cent of the computable value
of a building, and as computable value is to be considered: The value




GOVERNMENT AID TO HOUSING---- AUSTRIA.

43

of the ground required, the value of that part of the building which is
given over to small apartments, in case of agricultural dwellings, also
the value of the required outbuildings (stables and barns), and
finally the value of small shops located in the building.
In guaranteeing a mortgage loan the housing fund obligates itself
to the following payments:
1. If the chief debtor is in default with a contractual payment,
although he has been admonished by means of a notice issued by the
court or by registered letter, to payment of the amount in default,
together with interest from the date of its maturity;
2. If the mortgaged property is in the hands of a receiver and the
revenues from it are insufficient for the covering of the contractual
obligations, to payment of the amount in default together with
interest from the date of its maturity;
3. To payment of that part of the guaranteed mortgage loan,
together with interest, from the date of its maturity, which, after a
forced sale of the mortgaged property, in so far as the latter is not bid
in by the party who made the loan, is not covered by the highest bid.
The fund assumes guaranty for a loan only if the party making
the loan obligates himself to notify, within a proper time limit, the
ministry of public works of each delay of the debtor in the payment of
annuities, of each extension granted to the debtor for payment of an
annuity, as well as of an intended cession or conversion of the mort­
gage loan or part of it. The administration of the fund must also see
to it that all mortgage creditors who have prior liens obligate them­
selves to notify the administration within a suitable time limit of any
intended cession or conversion of their mortgage loans, or part of
them, and agree not to grant any new loan within the lien of these
mortgages, even if partial payment has been made, until these
mortgages are entirely canceled.
Applications for the granting of direct loans from the fund are to be
made to the ministry of public works. Applications for the assump­
tion of guaranty are to be submitted by the applicant for a loan
directly to the ministry of public works or to the lender. The latter
may either refuse the loan, or submit the application to the ministry
with the request for its examination and for notification, as to whether
the administration, of the fund is willing to assume guaranty for the
loan and within what limits. Applications for both direct loans and
the assumption, of guaranty are disposed of jointly by the minis­
tries of public works and finance. The applications must be accom­
panied by a number of documents and papers specified in the by­
laws of the housing fund which are necessary to facilitate the judg­
ing of the buildings to be constructed from technical, sanitary, and
moral standpoints and to make clear important points of a financial
nature.




44

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

Applicants must submit a statement of their financial condition
which shall especially indicate the manner in which they intend to
raise the means required for the proposed building operations in
addition to the loan to be made or guaranteed by the housing fund.
In applying either for a direct loan or for the guaranty of a loan
by the fund the applicant must show: (1) That he has found a money
lender corresponding to the requirements of the by-lav/s of the hous­
ing fund wiio has either loaned him or promised to loan him at least
50 per cent of the total value of the proposed building; and (2) that
he has of his own means an amount equaling at least 10 per cent of the
total cost of construction and of the building site. In the case of
houses to be sold by the borrower to the occupants it is sufficient if
the borrower shows that the prospective purchaser has paid him on
account, without the right of recall, 10 per cent of the purchase price.
Sefore a loan on a building may be granted or guaranteed by the
housing fund, the building must be appraised by a State board of
valuation. In case of guaranty of a loan, the borrower may also
have the building appraised by private technical experts, and should
there be any difference between the official and private valuation, it
is left to the free judgment of the administration of the housing fund
which valuation is to be accepted as the basis for the proposed loan.
Loans made or guaranteed by the fund must usually be secured
by mortgage, and as the borrower must provide at least one-half the
necessary funds from some other source, the mortage given to the
housing fund will as a rule rank as a lien below the limit of security
for the investment of trust funds which the civil code in article 230
fixes at 50 per cent of the value of the property. In case of loans
made to or guaranteed for public institutions or autonomous cor­
porations, the giving of a mortgage to the housing fund may be dis­
pensed with.
In addition to obtaining a mortgage, the fund must also secure the
loan by reserving the right of refusal which is to be entered in the
land register. If the borrower erects or acquires houses for later
transfer to private individuals and has reserved the right of refusal,
the fund may make use of its right of refusal only if the borrower
does not exercise this right. As other loans are paid off, the loan
from the fund advances in rank until it falls within the limit of
security for the investment of trust funds, i. e., is first hen upon half
or less than half the value of the property upon which it is granted.
The borrower must agree that as long as the loan granted or guar­
anteed by the fund has not been fully discharged he will not make
any other contracts which might prevent it from gaining this favored
position.
In the case of loans guaranteed by the fund, the determination
of the rate of interest and refund and the manner in which these are




GOVERNMENT AID TO HOUSING-----AUSTRIA.

45

to be paid are left to special agreement with the lender. The rate
of interest charged may, however, not be in excess of the current
rate charged on mortgage loans by savings banks and other standard
credit institutions of the Province or part of a Province in which the
lender has his place of business.
The rate of interest for direct loans from the housing fund is com­
puted, independently of the rates in the locality in which the property
concerned is situated, according to the average usual rate of interest
charged on mortgage loans by the most important savings banks and
credit institutions of Austria. If, howrever, the rate of interest
charged by the workmen’s accident insurance institute in the terri­
tory in which the house is situated is lower than that average, the
rate of interest of the institute is to be applicable.
All loans made or guaranteed by the fund must be refunded in
annual payments. In the case of direct loans from the fund the
annual refund may not be less than one-half of 1 per cent.
Direct loans made by the fund may be terminated by either party
on half a year’s notice. The administration of the fund, however,
does not as a ride recall the loan so long as the debtor pays regularly
the annuities agreed upon and complies with his other contractual
obligations. The fund may recall the loan without previous notice
in the following instances:
1. If the building or individual apartments are not maintained in
proper condition and if the objectionable condition is not remedied
within 3 months after notice has been given;
2. If, after previous admonition, the annuities to be paid by the
debtor are not paid in full 3 months after due;
3. If distress has been levied against the mortgaged property or
part of it by means of a receivership or forced sale;
4. If the value of the mortgaged property has so decreased that
the amount owed on the property is no longer sufficiently secured;
5. If the debtor becomes bankrupt or defaults payments;
6. If the public-welfare character of the dwellings is, in the opinion
of the administration of the fund, no longer maintained;
7. If the property on which a loan has been made by the fund has,
without the approval of the minister of public works, been encum­
bered or been voluntarily sold, entirely or in part;
8. If, the property on which a loan has been made having been
sold with the approval of the minister of public works, the purchaser
does not comply with the obligations which he has assumed toward
the original borrower;
9. If the loan is not used for the purpose for which it was granted;
10. If the borrower fails to insure against fire;
11. If in the case of financial aid to cooperative associations,
societies, foundations, etc., these bodies do not comply with the




46

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

rules governing their supervision by the administration of the fund;
and
12.
If in the case of a loan on a house upon agricultural land, the
land is cultivated, without urgent reason, by other persons than
members of the borrower's family.
Contracts for loans which have been guaranteed by the fund must
provide for termination of the loan by either the debtor or the lender,
upon half a year's notice, unless the by-laws of the institution making
the loan exclude any recall by the lender.
The lender must, moreover, obligate himself to make use of his
contractual right of recall if requested to do so by the ministry of
public works.
Whenever the housing fund makes either a direct loan or guaran­
tees a loan, the borrower must obligate himself to the payment of a
fine of 5 per cent of the unpaid balance of the loan in case of recall of
the loan in the instances given above under Nos. 1, 6, 7, 9, 10, 11,
and 12.
The rents of a house built with the aid of a direct loan by the
housing fund or of a loan guaranteed by the fund must, as long as
these loans are not refunded, be fixed at suitable amounts, which,
although bringing a profit, must express the public-welfare character
of the house. The rents to be charged must be approved by the
ministry of public works and may not be changed without the latter's
consent.
Not more than one apartment nor more than one shop, in such
a house, may be rented to the same person.
Occupants of houses erected with the financial aid of the fund may
not be given notice to leave as long as they comply with their con­
tractual obligations or are not objectionable for other weighty
reasons.
The ministry of public works is authorized to inspect periodically
the process of construction and the completed houses. In, the case
of cooperative associations, societies, stock companies, foundations,
etc., which have obtained financial aid from the fund, the ministnr
is, moreover, authorized to exercise a general supervision, and espe­
cially to subject to inspection the entire business management and
accounting, to examine the books and correspondence, to be repre­
sented at the meetings of the officers or general meetings by a repre­
sentative without right to vote, who, on his request, must be given a
hearing, and to request the removal of objectionable conditions.
The costs of this supervision are borne by the fund.
LOANS TO INDIVIDUALS.

If a borrower acquires or builds family houses and sells them to
individuals, as opposed to corporations or other bodies, his contract
of sale must bind the purchaser not to sell within a period of 10 years,



GOVERNMENT AID TO HOUSING-----AUSTRIA.

47

except for good cause. Such houses may not be sold unless the
encumbrances upon them do not exceed 65 per cent of the total
cost, and unless at least 40 per cent of the mortgage loans made or
guaranteed by the fund has been paid off.
The borrower in making such a transfer must, in addition, observe
the following provisions:
1. Not more than one house may be sold to any individual person
or married couple.
2. The sale price must as a rule be based on the cost price, con­
sisting of the purchase price of the ground, building costs, interest,
costs of administration, and other actual costs.
3. In the contract of sale it is further to be agreed that—
(a) No restaurant or saloon may be established, nor may the
sale of distilled liquors be permitted in the house sold,
without the approval of the ministry of public works;
and
(i) The borrower reserves the right of refusal or, still better,
the right of repurchase for a period of at least 10 years,
and this right is to be entered in the land register.
If the provisions of the law of July 8, 1902, as to exemption from
taxes are applicable to such a house, the provisions given above
under 3 (a) and (b) are to be replaced by the corresponding provi­
sions of this law.
4. Sales to the highest bidder by means of voluntary auction may
take place only for good cause and require the consent of the min­
istry of public works.
5. If a parcel of agricultural land belongs to the house, the con­
tract of sale must stipulate that this land shall be cultivated, if
possible, only by the head of the family occupying the house or by
the members of his family.
6. The contract of sale must be submitted to the ministry of pub­
lic works.
The expenditures of the ministries of public works and finance for
the administration of the present law, especially the salaries of offi­
cials and employees occupied in this administration, are to be covered
from the income of the fund.
ADMINISTRATIVE FEATURES.

The law authorizes also the creation of local housing committees
( Wohnungsausschusse), which shall be consulted as to applications
for loans, and which shall also have the right to make proposals on
their own initiative. These housing committees shall be composed
by preference of representatives of communes, social insurance insti­
tutes, and social building associations.
A decree issued by the ministers of public works and finance in con­
junction with the minister of the interior, under date of August 18,



48

BULLETIN QM THE BUREAU OF LABOR STATISTICS.

1911 (R. G. Bl., No. 166), contains detailed provisions as to the forma­
tion of such committees and gives in an appendix a set of model
by-laws for them.
SUCCESS OF STATE HOUSING FUND.

Housing committees have, in pursuance of the law, so far been
formed in Aussig, Bielitz, Bregenz, Chrudim, Cracow, Freudenthal,
Gablonz, Graslitz, Gratz, Jaworow, Kolomea, Leoben, Marburg,
Teplitz, Warnsdorf, and Znaim, but their activity has been insig­
nificant. A large sphere of activity is open for these housing com­
mittees, above all in cities of the first class, especially in Vienna,
where a scarcity of dwellings has existed for years, but where a hous­
ing committee has not yet been formed.
The ruling idea in the creation of the housing fund was that this
fund should extend only indirect financial aid to housing workthrough the guaranty of loans. The law, however, also provided for
direct loans from the fund up to 20 per cent of its available means.
The wisdom of this latter provision was shown during the year 1912,
in which, on account of extraordinary financial stringency, loans
could not be obtained even with the guaranty of the fund. The
ministries of public works and finance, which administer the fund,
had special occasion for granting direct loans in the case of coopera­
tive building associations which had begun building operations but
could not continue them on account of lack of funds. At the end
of April, 1913, these direct loans had reached the amount of 812,111
crowns ($164,858.53). They were granted on second mortgage
security in the form of advances which were to be refunded at the
expiration of one year from the means obtained from a permanent
mortgage loan granted by some other party. Up to the same date
the fund had guaranteed loans in the amount of 7,832,686 crowns
($1,590,035.26) and advances in the amount of 5,643,888 crowns
($1,145,709.26), and has therefore altogether assumed guarant}^
for 13,476,574 crowns ($2,735,744.52). These loans correspond to
a capital invested in the houseson which they were madeof 21,613,9931
crowns ($4,387,640.58), i. e., the direct loans to a capital of 2,030,2781
crowns ($412,146.43) and the guaranties to a capital of 19,581,71s1
crowns ($3,975,088.15).
These results do not show so extensive a use of the fund as was
anticipated, since the means available would have permitted guar­
anteeing loans to a far greater total. On the other hand, direct
loans from the fund were larger than had originally been intended,
and this in itself would lessen the demand for guaranties. The
principal reasons, however, for the relatively small use of the guar­
anty privilege appear to have been the severe financial stringency




1 According to original report.

GOVERNMENT AID TO HOUSING---- AUSTRIA.

49

of the period and the fact that many cooperative building associa­
tions which will probably ask aid from the fund later on were either
in process of formation or were reorganizing in accordance with
the new legal proceedings, and hence were not in a position to under­
take building operations. Nevertheless it is felt that the law has
had good results.
In summing up our opinion of the new law, its importance can
not be rated sufficiently high. It has found a suitable middle course
for the union of these two great forces which dominate modern social
reform: Private initiative and State aid. Although the guaranty of
loans by the fund is also available for autonomous corporations, it
is designed to aid in the first place cooperative building associations
(i. e., associations of those persons who themselves suffer from the
scarcity of dwellings and by means of cooperation and common efforts
intend to provide for themselves cheap and sanitary dwellings). In
Austria such associations were until now left entirely to their own
resources. The lack of experience and business training of their
managers had in many instances led to very unfavorable results,
which should not be charged to the system of cooperation as such.
From now on, however, the State, as surety for the second mortgages,
is in a great measure materially interested in the fate of these build­
ing associations and must, therefore, care for their prosperous devel­
opment by supervising their business management, their building
activity and administration of the houses erected, and by preventing
them from engaging in risky enterprises.1
HEREDITARY RIGHT OF CONSTRUCTION (Baurecht).

All measures taken by the State discussed so far have as a common
object the public promotion of housing work. The legislature
justly believed that these measures would increase the supply of
dwellings and at the same time have a good effect upon their quality.
Housing legislation, however, did not stop at these measures, and
that the State has looked for still other ways to promote the public. welfare housing activity is a sign that the housing propaganda has
gained a strong foothold in Austria. Of experiments made in this
connection the most important is the effort to adapt the hereditary
right of construction (Erbbaurecht) to Austrian conditions. The
hereditary right of construction was introduced into Austrian juris­
prudence by the law of April 26, 1912 (R. G. BL, No. 86). The
initiative for the enactment of this law came from the Austrian
central association for housing reform (Zentralstelle fu r Wohnungsreform in Oesterreich) which addressed a petition to Parliament
requesting that the Erbbaurecht be considered in the proposed
adaptation of the civil code to present-day conditions. A chapter
devoted to the Erbbaurecht was in pursuance of this petition
1 Dr. Pribram in Mitteilungen der Zentralstelle fiir Wohnungsreform, N o. 17.
6 6 1 7 1 ° — B u ll. 1 5 8 — 1 5 ---------4




50

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

included in the draft of the amendment of the civil code. This
chapter, although based on the German Erbbaurecht, was given the
title “ Baurecht,” which is taken from the Swiss civil code. The
proposed extensive amendment of the Austrian civil code is still in
process of discussion and may not be enacted for some time. Dr.
Franz Klein, formerly minister of justice, made a motion in the
House of Lords to make the Baurecht the subject of a special law.
This motion was carried and the above-mentioned law was speedily
enacted.
In this connection it should be noted that the German hereditary
right of construction, more or less indigenous in origin, was not
created for the direct purpose of serving social ends, particularly
housing work, but was, as it were, “ discovered” in the civil code,
while in Austria the Baurecht was deliberately adopted to meet social
ends.
The law uses the term “ Baurecht” with the same meaning the
German law gives to “ Erbbaurecht,” defining it as follows: A parcel
of ground may be encumbered with the real, transferable, and
hereditary right to construct buildings above or below its surface,
which right is the Baurecht.
The right to build may not be restricted to a part of a building,
especially to a story; it may include not only all the ground re­
quired for the building proper, but also other parcels the use of
which is of advantage to the building.
The exceptional position of the Baurecht as compared with the
general civil code is accentuated in the following important deviation
from the principle of equality before the law. While the German
law gives to every owner of a piece of ground the right to encumber
it with an Erbbaurecht, the Austrian law restricts the persons au­
thorized to grant a Baurecht, so as to prevent land speculators from
using this new legal institution for their own ends. Anybody may
acquire a Baurecht in Austria, but only the State, Provinces, dis-*
tricts, communes, or public funds may grant a Baurecht. The legis­
lature expects of them that in granting a Baurecht they will be guided
by social and economic reasons, keeping the rate of the ground rent
sufficiently low so that the purpose of the Baurecht may be attained.
In addition, churches, ecclesiastic corporations, institutions, and com­
munities, as well as publie-welfare institutions and associations may
grant a Baurecht, provided that in the opinion of the political pro­
vincial authorities the granting of it is in the interest of the public.
The duration of a grant of the hereditary right of construction
has been limited to a minimum of 30 and a maximum of 80 years.
The maximum has been set in order to prevent the development of
the Baurecht into a new form of divided ownership. The minimum
duration, on the other hand, was fixed at 30 years because a Baurecht,




GOVERNMENT AID TO HOUSING---- AUSTRIA.

51

subject to recall without a legal minimum duration would not fur­
nish a suitable basis for a refunding plan and for real estate credit.
Of still greater importance is the undisturbed maintenance of the
Baurecht relations during the period for which the Baurecht is
contractually granted. Two principles of equal weight are here in
conflict. On the one hand, the grantee of the Baurecht ought to be
able, during the contractual period, to count with full security upon
the use of the dwelling he has erected, so that he may be spared the
nomadic life of the average small renter and be able to give his grow­
ing children a home conducive to their physical and moral develop­
ment. On the other hand, it does not seem desirable that the legal
position of the grantee should be entirely unassailable. The equali­
zation of these two conflicting principles is in the German Erbbaurecht left entirely to contractual agreement. The Austrian law does
not do away with the freedom of contract but restricts it. It pro­
vides, in the first place, that the Baurecht may not be restricted by
conditions of annulment, and then makes an exception permitting
the contracting parties to agree to an annulment of the Baurecht
on account of delay in the payment of rent, provided that such pay­
ment is in arrears for at least two consecutive years.
A Baurecht is established by entering the lease of the ground in
the land register as a first lien on the parcel of land. The person
entitled to build has the rights of owner to the building and the
rights of lessee to the piece of ground. A Baurecht may be granted
either with or without compensation. If the compensation, how­
ever, consists of payments to be made at regular periods (ground
rent), the amount of these payments and the dates on which they
become due must be determined independently of uncertain future
events, for the stability of the ground rent as well as the fixed dura­
tion of the Baurecht are fundamental conditions for the computa­
tion of the value of its usufruct and credit value. It would not,
therefore, be permissible to bring the ground rent into any relation
with the bank rate of interest and its fluctuations.
The Baurecht, although a servitude on the parcel of ground, is by
the law given the character of realty and the building acquired or
purchased on the basis of the Baurecht that of an appendage of the
latter. Credit institutes, which in accordance with their by-laws
may make loans only on realty, may, therefore, also make loans on a
Baurecht and its appendag§. In order to promote the erection of
workmen’s dwellings with the aid of the Baurecht the law declares
further that a mortgage on a Baurecht shall be considered as a legal
investment for trust funds provided that the amount of the mortgage
loan does not exceed one-half of the value of the Baurecht, and
provided also that it has been contractually agreed that the loan
shall be entirely refunded by means of annual payments at the latest




52

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

five years before the termination of the Baurecht. To make mort­
gage loans on Baurechte still more safe, the law provides that if,
before the end of the period for which it has been granted, a Baurecht
is canceled without the consent of mortgage creditors, this action
shall not become effective until all mortgages and other liens on the
Baurecht have also been canceled.
On the expiration of the Baurecht the building erected on the
leased ground becomes the property of the owner of the ground.
Mortgages and privileged liens (taxes, etc.) with which the Baurecht
is still encumbered at the time of its expiration then become liens
on the ground. The grantee of the Baurecht is, on its expiration, in
the absence of any other agreement, entitled to a compensation of
one-fourth of the value of the buildings in existence on the leased
ground. By means of this last provision the law puts a premium
on solid construction and proper maintenance of the buildings
erected on the Baurecht. If, on the expiration of the Baurecht,
the grantee is by law or according to contractual agreement entitled
to a compensation for the buildings erected on it this compensation
becomes subject to the mortgage and other realty liens with which
the Baurecht is still encumbered.
The law provides finally for the procedure at the granting of a
Baurecht and its entry in the land register, and regulates the fees
for it. Public-welfare building associations, privileged by the law
of December 22, 1910, with respect to transfer taxes, are granted
the same privileges for the acquisition or transfer of a Baurecht.
PRACTICAL USE OF THE BAURECHT.

The law has left the solution of many questions, especially the
method of valuation of the Baurecht for credit purposes, to practical
operation. This, combined with serious financial stringency, may
be the reason why building projects based on the Baurecht were not
carried out during the first year after the enactment of the law.
The project most ripe for realization is the plan of the policemen’s
pension institute to erect in Vienna on land owned by the State a
colony of houses (16 houses with 350 apartments) for policemen.
In Vienna the city council recently declared its willingness to grant
Baurechte on communal lands and a number of public-welfare build­
ing associations have filed applications for such grants, which in all
probability will soon be favorably acted upon. The city of Gratz has
resolved to grant a Baurecht to a large building association for the
erection of a colony of houses, and a number of other cities, as, for
instance, Aussig, Briix, Klagenfurt, and Salzburg, have in pursuance
of a resolution of the second Austrian housing conference declared
themselves willing to establish Baurechte.




GOVERNMENT AID TO HOUSING---- AUSTRIA.

53

BUILDING LAWS.

The enactment of building laws in Austria is reserved to the diets
of the individual Provinces. At the present date there are in exist­
ence 37 building laws, 21 of which were enacted for large cities, and
16— so-called provincial building laws (.Landesbauordnungen)— for the
rest of the country. Most of them date from the middle of the nine­
teenth century and do not represent modern ideas as to the housing of
the working people. The building laws at present in force in Austria
did not originally, as a rule, regulate the density of building. Later
amendments of these laws have given them an influence upon the
density of building in so far as specified parts of cities were reserved
for buildings conforming to certain specifications; zones with gradu­
ated building regulations were established, and exceptional facilities
for the erection of new buildings were granted for individual districts.
All building laws show, however, the same defect, i. e., notwith­
standing their amendment they have given little or no consideration
to the character of the different localities; and their special regulations
have all been framed principally for large tenements. The amend­
ment of a large number (12) of these laws is now under discussion,
and to promote a speedy reform of existing building laws the ministry
of public works has lately invited representatives of the individual
diets to a general conference.
EXPROPRIATION LAWS.

The Austrian civil code contains in article 365 the following general
provision as to expropriation: “ If the public good requires it a mem­
ber of the State must cede the complete ownership of an object,
subject to suitable indemnification.” The constitution, however,
which was promulgated later than the civil code, declares in article 5:
“ The right of property is inviolable. Expropriation against the will
of the owner may take place only in such cases and in such a form as
are determined by law .”
The prevailing opinion is that this provision of the civil code is
not to be considered as an expropriation law, and that expropriation is
permissible only if based on a special law. Such special laws have
been enacted in a number of instances where the expropriation of pri­
vately owned land was necessary for the construction of railroads,
streets, waterways, etc. The administrative authorities, to be sure,
have often issued orders of expropriation based merely on the above­
quoted article 365 of the civil code and were repeatedly sustained
therein by the highest administrative court ( Verwaltungs gerichtshof) .
This was, however, always done in instances in which a clearly de­
fined public interest and a specified piece of land were in question.




54

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

Article 365 of the civil code would not be applicable to expropriation
of a house for sanitary reasons.
The Austrian building laws provide in a few special instances that
expropriation shall be permissible for sanitary reasons, as in the case
of the opening of new streets or the widening of existing streets.
Most of the building ordinances merely obligate owners of unimproved
real estate to cede to the city for proper compensation in case of a
change in the building line that portion of their property which is to
form a part of the street area, but in some cases this obligation is
extended also to owners of buildings if the opening of new or the
widening of existing streets is found urgently necessary in the interest
of traffic, safety from fire, or in the public interest. Such provisions
are contained in the building laws of Galicia and of Bukowina and
in the building ordinances of the cities of Pola, Klagenfurt, and Lai­
bach. The building ordinance of Trieste is the only one providing in
a general way that the commune may take measures for expropri­
ation if such action is required in the interest of the public.
EXPROPRIATION OF INSANITARY AREAS.

Except in Trieste the removal of an insanitary building may be
effected by expropriation only if the building line of the street in
which the building is located is to be changed; the right of expropria­
tion is in all ordinances explicitly restricted to the land needed for
the street area, and is therefore not applicable to large areas. An
example of the expropriation of a large area (Zonenenteignung) is
to be found only in Prague, where the buildings of an entire ward, the
Josefstadt, and several smaller districts were by means of a special law
expropriated for purposes of sanitation.
The law was enacted with the intention of covering the costs of
the project by means of the prospective increase of land values. To
make the rebuilding of the insanitary dwellings compulsory, the law
granted to the commune the right of expropriation, and it is for this
reason that this project of sanitation deserves more detailed mention.
The area included in the project consisted of two separate districts.
The first one included an entire ward, the Josefstadt, and adjoining
parts of another ward, the Altstadt, together covering an area of
365,476 square meters (90.3 acres). The second consisted of a part
of the Neustadt, with an area of 14,672 square meters (3.6 acres).
The latter district, on account of its relatively small area, will not be
considered here.
The chief reason for this project was the improvement of sanitary
conditions. The morbidity from contagious diseases during the
period 1883-1889 was 35.31 per cent in the Josefstadt as compared
with 28.7 per cent for the entire city of Prague, and the mortality
percentage was 40.02 for the former against 28.7 for the latter. The




GOVERNMENT AID TO HOUSING---- AUSTRIA.

55

causes of these high rates were chiefly the low land on which the
Josefstadt was built—it was inundated nearly every year— the great
density of buildings, and the gross overpopulation. The two lastnamed conditions were connected with the fact that up to 1848 the
Josefstadt formed the ghetto of Prague, and its area was insufficient
for the large Jewish population.
During the period 1880-1890, in which a progressive improvement
was taking place in all other wards of Prague, housing conditions in
the Josefstadt grew still worse. Success of the absolutely necessary
sanitation of the district could be expected within reasonable time
only if the undertaking was effected uniformly and with special aid.
Such aid was fum'shed by the legislature, which exempted rebuilt
houses from all taxes and fees for a period of 20 years, and conferred
upon the commune the right of expropriation. The law of February
11, 1893, the operation of which was later extended by the law of
April 17, 1903, and finally by the law of March 24, 1913, gave to the
commune of Prague the right to expropriate real estate situated in
the area designated far sanitation the owners of which, within a period
of two years after previous notice in due form of law, had not taken
advantage of the exempting provision of the law. As a matter of
fact, only a few owners of real estate rebuilt their houses.
The law also authorized the commune to transfer the carrying out
of the project of sanitation to private contractors, to whom was
granted the same right of expropriation as to the commune itself.
Originally the commune intended to make use of this privilege, but
on account of a lack of acceptable bids it had to do the work itself.
The commune did not intend, however, to build on its own account.
Its activity was restricted to the acquisition of the condemned real
estate, demolition of the old structures, and sale of the newly acquired
building lots after the sanitation of the land had been effected. The
right of expropriation proved to be indispensable for this activity,
for although use of it had to be made in only 25 per cent of all acquisi­
tions of condemned real estate, its mere existence made possible the
acquisition of condemned property by voluntary sale and prevented
exorbitant claims, which otherwise would have certainly been made
and would have endangered or even made impossible the entire work
of sanitation. The law provided explicitly that in determining com­
pensation the increase in the value of the ground through the proposed
work of sanitation and through 20 years’ exemption from taxes
should not be considered. In making this restriction the legislators
intended to aid in the realization of the purpose that the increase in
the value of the land should benefit the party who had actually made
the improvements.
The following data will show the extent and importance of this
work of sanitation. Before the beginning of the work the area given




56

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

over to streets was 23.59 per cent of the entire area included in the
project and for the Josefstadt the ratio was only 17.02 per cent. After
completion of the sanitation the area of the streets will form 40.71
per cent of the total area. After deduction of the area required for
streets and for a few historical objects which are to be preserved,
there is now available for building purposes an area of 257,000 square
meters (63.5 acres). Up to 1910 there had been erected 154 new
buildings occupying an area of 79,630 square meters (19.7 acres) and
housing 8,066 persons. The comparatively slow progress of the re­
building has its cause in the fact that the beginning of this work fell
in a period of very slow building activity, the after effect of a preceding
building boom.
The difference in the nature of the dwellings before and after the
sanitation work is shown by the following data:
NATURE

OF

D W E L L IN G S

BEFORE

AND A F TE R
PRAGUE.

THE

S A N I T A T IO N

WORK

IN

Before the begin­
In the new build­
ning of the sani­
ings.
tation work.

Average height of buildings................................................................................. 3.9 stories
Average area of building lots.........................................................................
253 sq. meters___
Number of apartments per hom e....................................................................... 8.3
Number of heatable rooms per apartment..................................................... 2.15 . .
Number of occupants per apartment................................................................ 5 . 7 .........................
Number of occupants per 100 square meters (1,076 square feet) of area
occupied by a building....................................................................................... 18.66.......................

4.8 stories.
582 sq. meters.
11.1.
3.45.
4.7.
10.13.

In the Josefstadt in the years 1893, 1903, and 1908 the amount of
rent paid and the average rent per occupant was as follows:
Year.

1893
1903
1908

.......................................................................................
.......................................................................................
.....................................................................................

Amount of all rents.

$123,345.64
102,083.89
135,164.30

Population.

Average rent per
occupant.

$10.44
12.50
30. 87

11,816
8,215
4,379

These data illustrate plainly the change which has taken place.
An insanitary, densely built, and overpopulated proletarian district
has been transformed into a spaciously built business and residence
district. The individual classes of apartments are represented in
the new buildings in the following ratio:
Apartments consisting of—
1 room and accessories.......................................................................23.1
2 rooms and accessories.....................................................................24.7
3 rooms and accessories.....................................................................31.4
Larger apartments...............................................................................20.8

per
per
per
per

cent.
cent.
cent.
cent.

But even the smallest of these apartments are not within the reach
of people of small means, for apartments of only 1 room, kitchen,
and accessories rent, according to location and height of the house,




GOVERNMENT AID TO HOUSING-----AUSTRIA.

57

at 600 to 900 crowns ($121.80 to $182.70) and those with two rooms
and accessories at 900 to 1,200 crowns ($182.70 to $243.60). These
apartments are to-day occupied by an entirely different class of the
population. For the housing of the displaced occupants the com­
mune had made no provision at all, and there was no necessity for
such action, for in the first part of the nineties, in anticipation of the
project, an extraordinary building activity, or rather an overpro­
duction had developed in the suburbs of Prague, so that the popula­
tion displaced through the sanitation of the Josefstadt easily found
housing accommodations in the newly erected family and apart­
ment houses of the suburbs. To these suburbs, which ai*e at a con­
siderable distance from their former quarters, these people of small
means would never have moved voluntarily, because their housing
habits made it more desirable for them to live in the center of the
city and in the vicinity of their working places. The laws which
made the sanitation work possible are, therefore, indirectly respon­
sible for the removal of these classes of the population from their
former highly insanitary dwellings to dwellings corresponding to
modern requirements. The distance of the suburbs from the center
of the city was after all not such a great inconvenience for them, for
the development and modernization of the traction system of Prague
were coincident with the sanitation work and the central part of the
city could be reached from the suburbs in a relatively short time.
The removal of these people was, moreover, inevitable, because the
improved area is surrounded by high-grade, expensive buildings, and
because the city was forced to sell the building lots at as high a price
as possible in order to reduce the deficit of 1,000,000 crowns ($203,000)
due to the sanitation work.
UNEARNED INCREMENT TAX (Wertzuwachssteuer).

The fourth convention of communal officials of German-Austrian
cities (Deutschoesterreichischer Stddtetag) had as early as 1905 advo­
cated the introduction of a tax on the unearned increment. The
same subject came up for discussion in 1908 at the sixth convention
of communal officials of Austrian cities (Oesterreichischer Stddtetag),
which framed a bill authorizing the communes to levy a tax on the
unearned increment. The introduction of such a tax was also
repeatedly proposed in the city council of Vienna.
These proposals have only lately come near to realization. On the
occasion of discussions as to the rehabilitation of the finances of the
individual Provinces the Austrian Government showed its willingness
to permit incorporated public bodies to levy a tax on the unearned
increment as a new source of revenue. The Government submitted
to the various provincial diets two model bills, one of which provided
for the obligatory introduction by all communes of an unearned



58

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

increment tax as a provincial and communal tax, and the other for
its optional introduction as a communal tax. Both bills provide
for progressive taxation of the unearned increment at the time of
transfer and are essentially based on the principles of the German
imperial law regulating the levy of such a tax. A noteworthy pro­
vision of the second bill is that it obligates the communes to use
only part of the revenue of the tax for their current expenditures,
while the balance of the revenue is to be assigned to a reserve fund
which shall be used for investments in land designated for communal
housing work or erection of schools, or for the refund of communal
debts.
The diets of Carinthia, Carniola, Trieste, and Tyrol have lately
enacted laws similar in their contents to the first-named model bill
introducing an unearned increment tax in rural and urban communes.
CREATION OF A BUREAU ON HOUSING.

A new Government department, the ministry of public works, was
created in Austria in pursuance of the law of June 27, 1908. In
determining the sphere of activity of the new ministry, special con­
sideration was for the first time given to housing work and a special
bureau on housing was established. The regulations for the activity
of the ministry of public works, published on July 6, 1908, provide
for the bureau on housing the following duties: Preparation of legis­
lation and administrative decrees on housing matters, and cooperation
in tax legislation relating to them; organization of housing work, and
promotion of sources of credit for it.
HOUSING WORK OF THE STATE AS AN EMPLOYER.

The housing work of the State as an employer takes a twofold form.
The State either loans money to building associations, the member­
ship of which consists entirely or to a large extent of employees of
the State, or it builds houses for them on its own account.
1. LOANS TO BUILDING ASSOCIATIONS.

The first form of this activity of the State was made possible
through the law of December 28, 1907 (R. G. Bl., No. 285), which
authorized the Government to create a fund endowed with 4,000,000
crowns ($812,000) for the promotion of housing work for employees
of the State. The law provided a further amount of 1,000,000
crowns ($203,000) for the endowment of a similar fund for workmen
in the State salt mines. Cooperation in the organization of the
housing fund for State officials which bears the name “ Emperor
Francis Joseph I Government Jubilee Fund 1908,” was one of the
first tasks for the newly created ministry of public works and its
bureau on housing matters.




GOVERNMENT AID TO HOUSING---- AUSTRIA.

59

CONDITIONS GOVERNING LOANS.

According to the regulations approved September 28, 1908, this
fund may grant building loans to cooperative associations which, in
accordance with their by-laws, make it their object to rent to their
members cheap and sanitary housing accommodations, limit their
dividends to members to 4 per cent, and do not accept savings
deposits. Associations composed exclusively of active State officials
and other employees in the Government civil service who have not
the character of officials are to be given the preference in making
such loans. However, the regulations permit loans to associations
which are only partly composed of State officials and employees,
provided that a part of the apartments, proportionate to the amount
of the loan, is reserved to State officials and employees. Building
loans are, as a rule, to be granted only for localities in which suitable
sanitary dwellings are either not available or are available only at
exorbitant prices.
Loans are made only on mortgage security, but not as a first lien,
for a prerequisite for a loan from the fund is that loans up to 50 per
cent of the value of the property (i. e., up to legal security for trust
funds) must be procured from private credit sources. A house on
which the fund grants a building loan may not be encumbered for
more than 90 per cent of its estimated value, inclusive of the ground,
and before such a loan is granted it must be shown that the associa­
tion has sufficient means of its own to cover the required balance of
10 per cent. Loans made by the fund bear interest at the rate of
3 per cent and must be refunded with one-half of 1 per cent per year.
In exceptional cases the fund may also advance the amount of the
first mortgage, provided security is furnished for its refund after
completion of the building.
Loans from the fund may not be recalled so long as the association
complies with its contractual obligations. The rents of houses on
which the fund has made loans must be set at suitable figures and
may not be raised without the consent of the ministry of public works.
Renters may not be given notice to vacate so long as they comply
with their obligations.
The regulations for the administration of the fund do not for the
present provide for any loans on one-family houses built by asso­
ciations with the ultimate object of their becoming the property of
members.
In the interest of practical promotion of the creation of Govern­
ment employees’ building associations the ministry of public works
has framed model by-laws both for associations composed exclusively
of persons in the Government civil service and for mixed associations,
and has worked out special forms for loan contracts to be concluded
with the fund. In consideration of the importance of orderly account­




60

B ULLETIN OF TH E BUREAU OF LABOR STATISTICS.

ing to the development of cooperative associations the ministry has
also published a book of instructions for the bookkeeping of publicwelfare building and housing associations which contains an easily
understood description of the method of bookkeeping, a collection of
forms of the books to be used, and the most important provisions of
laws regulating taxes and fees. In addition the ministry established
an extensive information service which has led to the creation of
numerous building associations of Government civil-service employees
within a relatively short period. In this connection it is an inter­
esting fact that of the new associations formed those composed ex­
clusively of Government employees are in the minority. The
extraordinary activity and energy of the newly formed associations
made it possible for the ministry of public works to grant up to date a
considerable number of building loans from the fund, and associations
in nearly all Provinces of the Empire are now among its beneficiaries.
Of special importance is the decision of the competent authorities
that houses built for the exclusive use of low-salaried civil-service
employees (Diener) who have not the character of officials shall enjoy
the benefits of the law of July 8, 1902, as to exemption from taxes.
More detailed data as to the activity of building associations of Gov­
ernment civil-service employees is given in the section of this article
which relates to building associations.
2. STATE-BUILT HOUSES FOR GOVERNMENT EMPLOYEES.

The State has for a long period provided service dwellings for some
of its officials and employees in nearly all branches of the adminis­
tration. A recent investigation of the Austrian bureau of labor
statistics relating to public housing work has, however, left such
service dwellings out of consideration, and therefore recent statistical
data in this respect can not be given in the present work.
In addition the State has done extensive housing work as an in­
dustrial employer. Especially active in this respect were the adminis­
trations of the State railroads, tobacco factories, and salt mines (the
tobacco and salt industries are in Austria monopolies of the State).
The administration of the State railroads uses for this work chiefly
the means of the provident funds in existence for the personnel of the
railroads, i. e., of the sick fund and old-age and invalidity fund.
The directorates of these funds build dwellings largely, and either
administer them themselves or rent them to a building association
with the provision that the association shall become the owner of the
dwelling as soon as it has refunded the capital invested in the dwelling
by the fund. Finally the directorates of these provident funds also
make building loans to building associations, and since the creation of
the State housing fund such loans have been made frequently.
Although the administration of the State railroads adheres to the
general principle that the capital invested in housing work should



GOVERNMENT AID TO HOUSING-----AUSTRIA.

61

bring a return of 4 per cent, it nevertheless sees to it that in dwellings
erected on its own account, as well as in dwellings on which it has
made loans, the rents charged are somewhat lower than the usual
local rents. The Government bears the costs of administration of
houses owned by the funds. The type of the houses built is governed
by the costs of the ground and building costs. Wherever possible
the administration builds one and two family houses. In the case
of larger houses the administration makes it a rule that there shall not
be more than four apartments to one floor. The buildings erected
comply with all sanitary requirements, and provision is generally
made for gardens and playgrounds for the children. Reading rooms,
baths, kindergartens, etc., are also provided. The renting of houses
to building associations is as a rule effected on a 50 years' lease. In
addition to 4 per cent annual interest the associations must pay a
corresponding refunding annuity, and become, after complete refund
of the invested capital, the owners of the rented houses.
Houses erected by the administration of State railroads or built
with financial aid from it may be rented only to employees of the
State railroads and primarily to members of building associations of
such employees. Renters are prohibited from keeping lodgers or room­
ers. Loans are granted up to 50 per cent of the value of ground and
buildings, at 4 per cent interest and 1 per cent annual refund.
Up to the end of the year 1912 the administration of State rail­
roads had built 466 houses with 4,373 apartments at a cost of
24,741,000 crowns ($5,022,423) and 53 houses with 648 apartments
at an estimated cost of 5,164,000 crowds ($1,048,292) were in
process of construction.
The administration of the salt mines limits its housing work to the
erection on its own account of houses for its officials, overseers, and
workmen, which are rented to them at a merely nominal rental.
Originally the administration adopted the type of the eight-family
house. Smaller houses were built later on, and in 1909 the first onefamily houses were ready for occupancy. At the salt mines dormi­
tories in which the workmen find free sleeping accommodations are
maintained.
Up to the end of the year 1908 the administration of the salt mines
had erected 89 houses with 133 apartments for officials, 57 houses
with 192 apartments for overseers, and 57 houses with 315 apart­
ments for workmen. Free service dwellings were furnished to 53
officials, 177 overseers, and 37 workmen.
In Eselbach, near Aussee, the administration has lately begun the
erection of buildings for a workmen's colony, the u Kaiser Franz
Joseph I. Jubilaums Arbeiterkolonie," which is to consist of a large
number of one and two family houses, part of which are already
completed. Another workmen's colony, consisting of 15 four-family



62

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

and 7 two-family houses, is in process of construction at Wieliczka,
and one of 5 four-family houses in Bochnia.
The central administration of the tobacco monopoly made in
1895, 1896, and in 1900 investigations into the housing conditions
of the workmen in its tobacco factories. The results of these investi­
gations showed highly unfavorable conditions and induced the
administration to begin the erection of workmen's houses for married
workmen and of homes for single workers. Up to 1900 the adminis­
tration had built in Hamburg, Joachimsthal, and Winniki six houses
with 88 apartments and one dormitory for single female workers.
Since then the housing work of the administration has come to a stop,
only one new apartment house for workmen having been added to
those built up to the year 1900.
HOUSING WORK OF CARRIERS OF STATE SOCIAL INSURANCE.

While the German workmen's insurance law has made it possible
for the carriers of the old-age and invalidity insurance, the State
insurance institutes, to become the chief credit source for housing
work, Austrian social insurance legislation has so restricted the
investment of the funds of insurance carriers that the latter have
no importance at all as a credit source for building loans in so far as
housing work is concerned. The provisions of the joint decree of the
ministers of the interior, justice, finance, and commerce of March 5,
1896, regulating the investment of the funds of private insurance
institutes, are also applicable to the carriers of the State social insur­
ance (i. e., the accident insurance institutes and sick funds), and
these provisions prescribe that mortgage loans may be made only
up to 50 per cent of the value of the realty in question, which is
equivalent to the security required for the investment of trust funds.
The law of December 16, 1906, relating to the old-age and invalidity
insurance of private salaried employees (Privatangestellte), has also
adhered to this principle. Although this law authorizes the minister
of the interior to permit in individual instances investments of funds
of the pension institute in a manner at variance with the provisions
of the decree of March 5, 1896, this authorization is not very farreaching, as the law further stipulates that such other investments
must represent security equal to the investments specifically per­
mitted by the decree. In consequence the workmen's accident
insurance institutes, which alone of all insurance institutes existing
in Austria have shown active interest in the housing problem, were
much restricted in their desire to aid in housing work. The granting
of loans on first mortgages is as a rule of not much assistance to build­
ing associations, they being easily able to secure such loans from
private sources. In order therefore to improve the housing con­
ditions of their insured members, the accident insurance institutes



63

GOVERNMENT AID TO HOUSING---- AUSTRIA.

decided in a number of instances to build on their own account.
The accident insurance institute of Trieste was the first to build.
It built eight workmen's dwellings in 1896, and the institutes of
Gratz, Vienna, and Salzburg soon followed its example.
The report on the financial administration and the results of acci­
dent statistics of the workmen's accident insurance institutes for the
year 1910, published by the ministry of the interior, shows the
investments of these institutes/in workmen's dwellings, which are
given in the following tables:
C O ST, P R E S E N T V A L U E , A N D IN C O M E O F W O R K M E N ’ S D W E L L I N G S O W N E D B Y A U S ­
T R I A N A C C ID E N T IN S U R A N C E IN S T IT U T E S A T T H E E N D O F T H E Y E A R 1910.
[Source: Die Gebarung und die Ergebnisse der Unfallstatistik der Arbeiter-Unfallversicherungsanstalten
im Jahre 1910. Vom Minister des Innern dem Reichsrate mitgeteilt. W ien, 1913, p. 74.]

Name of terri­
torial institute.

Location of work­
Cost of
Present
m en’ s dwellings ground and
book value.
buildings.
owned.

Vienna.....................
Salzburg..................
D o .....................
D o .....................
Gratz........................
D o .....................
D o .....................
Trieste.....................

Vienna.................. $166,696.64 $154,442.40
23,142.00
15,428.00
Kleinm iinchen..
24,035.20
Hallein.................
16,727.20
Lehen....................
64.997.37
63,290.16
Eggenberg...........
45.475.38
43,165.97
Leoben................. 125.100.03 118,105.31
100,780.95
Klagenfurt.......... 101,430.23
Trieste.................. 180.806.03 167,746.75

Gross
income.

Net irLcome.
Taxes,
fees,main­
tenance,
adminis­
tration, Am ount. Per cent.
etc.
•

$11,234.96 $5,043.30 $6,191.67
617.12
617.12
669. 09
669.09
567.09 2,531.61
3,098. 70
2.420.70
899.89 1,520.81
7,093.47 2,932.75 4,160.72
4.865.71 1,520.77 3,344.94
13,809.28 6,704.28 7,105.00

4.01
4.00
4.00
4.00
3.50
3.50
3.32
4.22

i

Although the income from workmen's dwellings owned by the
accident insurance institutes is on the whole satisfactory, as the net
income from all of them, with the exception of those owned by the
institute of Gratz, amounts to 4 per cent or more of the invested cap­
ital, the institutes are disinclined to continue to build on their own
account and prefer to promote the public-welfare building activity
by means of mortgage loans. The following table shows the mort­
gage loans made by the institutes up to the end of the year 1910:
M O R T G A G E L O A N S B Y A U S T R IA N A C C ID E N T IN S U R A N C E I N S T I T U T E S O N W O R K M E N ’ S
D W E L L I N G S U P TO T H E E N D O F T H E Y E A R 1910.
[Source: Die Gebarung und die Ergebnisse der Unfallstatistik der Arbeiter-Unfallversicherungsanstalten
im Jahre 1910. Vom Minister des Innern dem Reichsrate mitgeteilt. W ien, 1913, p. 76.]

Name of territorial institute.

Location of realty
on which loan was
made.

Estimated
value of
realty.

V ienna........................................................... Vienna...................... $107,590.00
D o ........................................................... ........ d o ........................ 111.650.00
54.810.00
D o ........................................................... Stadlau.....................
D o ............................................................ Wiener-Neustadt . 111.650.00
14.210.00
Prague ........................................................... Pardubitz.................
Briinn............................................................ Mahrisch - Schon4,318. 47
berg.
12,027.43
D o ........................................................... Bielitz.......................
14,707.82
D o ........................................................... ........ d o ........................
4,839. 76
D o ............................................................ Hussowitz...............
D o ............................................................ Julienfeld ........
19,233.97
4,356. 45
D o ........................................................... Neu-Leskau............
Lem berg....................................................... Cracow .....................
37,301.25




Liens pre­
ceding the
mortgage
loan of the
institute.

Am ount of
mortgage
loan.

Rate of
interest
in per
cent.

$52,325.41
46,950.97
26,906.69
54,441.63
7,105.00
1.461.60

$10,115.19

4.25
4.25
4.25
4.25
4.00
4.00

3.491.60
6.130.60
1,798.49
7,393.06
2,161.02
6,747.55

4.00
4.00
4.00
4.00
4.00
4.00

64

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

As this table shows, the accident insurance institutes made only a
very limited number of loans on workmen’s dwellings, even when
they could make them on legal security for the investment of trust
funds— i. ©., when the loans did not exceed 50 per cent of the value
of the dwellings. Yet the interest on the loans made was never less
than 4 per cent, while the institute of Vienna obtained 4J per cent.
PROPOSED EXTENSION OF HOUSING WORK BY SOCIAL
INSURANCE INSTITUTES.

As has already been said, such loans are of little assistance to build­
ing associations, for under ordinary circumstances they can secure
first-mortgage loans from private credit institutes. What the build­
ing associations need is easily obtainable, low-rate loans on secondmortgage security. A Government bill providing for an entire reform
of the social insurance system of Austria and for the creation of an
old-ag£ and invalidity insurance, which has been under discussion
for several years b}^ a specially appointed parliamentary committee,
removes a large part of the restrictions on investments of social insur­
ance funds. This bill, although providing that such funds shall as a
rule be invested according to the regulations set down in the previouslymentioned ministerial decree of March 5, 1896, authorizes the min­
ister of the interior to permit 25 per cent of the assets of the accident
and old-age and invalidity insurance institutes to be invested in the
erection of sanatariums and convalescent homes and the erection of
workmen’s dwellings, or for similar public-welfare purposes, in a
manner at variance with the rules laid down in the ministerial decree.
The parliamentary committee on social insurance goes even further,
and proposes to increase this percentage to 30 per cent.
This bill, if enacted, not only would make the funds of the accident
insurance institutes available for investment in workmen’s dwellings,
but also would permit the use of the much larger reserve funds which
would accumulate in the invalidity insurance institutes. With a
liberal policy of the directorates of these institutes and with proper
support of this policy by the minister of the interior, public housingwork should have ample funds at its disposal at a low rate of interest.
But even at the present date the creation of the State housing fund
has opened vast opportunities for the accident insurance institutes to
promote housing work, for the law creating this fund provides
explicitly that mortgage loans on workmen’s dwellings up to 90 per
cent of their value shall, if guaranteed by the fund, be considered as
legal investments for trust funds, and therefore enables the accident
insurance institutes to make such loans on second mortgages without
violating the provisions of the ministerial decree of March 5, 1896.
As the law creating the housing fund was enacted on December 22,
1910, and as the last financial statement issued by the accident in­



GOVERNMENT AID TO HOUSING-----AUSTRIA.

65

surance institutes covers only the year 1910, it can not yet be judged
how far they have made use of the guaranty of the housing fund in
the granting of mortgage loans on workmen’s dwellings.
MUNICIPAL HOUSING WORK.

Following the example of the State, the municipalities of Austria
have lately begun to take a greater interest in the housing problem.
A number of municipal administrations acknowledged above all the
usefulness and necessity of a systematic increase by the municipali­
ties of their holdings of land. The city of Vienna, for instance, ac­
quired during the years 1908 to 1912 building sites of a total value of
14,490,000 crowns ($2,941,470), the city of Linz purchased in 1911
and 1912, 166 joch (236 acres) of a total value of 1,000,000 crowns
(8203,000), and the city of Aussig has successively acquired build­
ing sites of a total area of over 300 joch (427 acres), an area suffi­
cient to enable it to influence the price of land. Olmutz and Znaim,
two municipalities of Moravia, have lately also purchased a consider­
able number of building sites.
The further activity of the municipalities in housing work consists
partly in direct construction of dwellings and partly in promotion of
public-welfare housing work.' In order to obtain a survey of the
activity of the communes in housing work the central organization
for housing work sent schedules to all municipalities with a popula­
tion of over 10^000 inhabitants, with the exception of the Czech mu­
nicipalities ; these schedules were answered by 96 out of a total of
114 municipalities.
This investigation showed that a number of municipal administra­
tions have built dwellings, especially for their own employees. The
city of Vienna erected up to 1913 for employees and workmen of the
municipal traction system and gas works 5 large apartment houses
with 609 apartments, and in addition put at their disposition 251
apartments in station buildings and purchased houses. Early in 1913
there were completed 9 additional houses with 1,334 apartments,
so that to-day the city of Vienna is the owner of 2,194 apartments
occupied by employees of its establishments. The cost of the 1,585
apartments erected for the employees of the municipal traction sys­
tem was in round numbers 8,218,000 crowns ($1,668,254).
Dwellings for their employees were further erected by the following
municipalities:
In Bohemia— Chrudim, 26 houses with 58 apartments; Kosir, 12
houses with 23 apartments.
In Moravia— Briinn, 3 houses with 45 apartments, cost 218,000
crowns ($44,254); Manrisch-Ostrau, 8 houses with 111 apartments,
cost 522,000 crowns ($105,966).
6 6 1 7 1 ° — B u ll. 1 5 8 — 1 5 -------- 5




66

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

In Silesia— Troppau, 5 houses with 52 apartments, cost 209,500
crowns ($42,528.50).
In Lower Austria— Sankt Polten, 3 houses with 39 apartments,
cost 250,000 crowns ($50,750).
In Tyrol—Innsbruck, 3 houses with 37 apartments.
In Galicia— Cracow, 2 houses with 24 apartments, cost 135,000
crowns ($27,405).
The municipality of Aussig, in Bohemia, has housed some of its
employees in purchased houses.
The more far-reaching task of municipal administrations to pro­
vide low-cost housing accommodations for persons of small means,
where private building activity is insufficient, has up to date been
accomplished in a relatively small measure. Most active in this
respect was the city of Trieste, which by a resolution of its city council
of July 17,1902, created an institution for the erection of sanitary and
cheap dwellings for people of small means (Instituto communale per
abitazioni minime), which is autonomous in its activity and subject
to the supervision of the municipality alone. The initial capital of
this institute consisted of an endowment of 400,000 crowns ($81,200)
from the city of Trieste and one of 150,000 crowns ($30,450) from the
municipal savings bank. As both the municipality and the municipal
savings bank had assured the institute of further contributions, it was
provided in the by-laws of the institute that one-half of the members
of its executive board must be nominated by the city council from
among the aldermen, so that the use of the municipal means for the
benefit of the poorer classes of the city’s population might be safe­
guarded. Up to the end of the year 1912 this institute had erected
38 houses with 653 apartments, at a cost of 2,707,000 crowns
($549,521). Thirteen houses with 233 apartments were in process of
construction, and plans for the erection of an additional 10 houses
with 180 apartments were under consideration.
The fact that in the summer of 1911 a considerable number of
families living in Vienna, although able to pay rent, could not find
housing accommodations, for the reason that they had numerous
small children, and the apprehension that this forced homelessness
would increase during the subsequent winter induced the city of
Vienna to take speedy remedial action.
On the initiative of the
central organization for housing reform it decided in October, 1911, to
create a special public-welfare association for the erection of emer­
gency dwellings (Notstandswohnungen). This was formed by the coop­
eration of the city of Vienna, the central organization for housing
reform, and a stock company for the erection of small apartments
formed by the General Austrian Mortgage Credit Bank (k. & priv.
.
allgemeinen oster. Bodencreditanstalt). The city of Vienna contribu­
ted 200,000 crowns ($40,600) and the above-mentioned stock com­




GOVERNMENT AID TO HOUSING-----AUSTRIA.

67

pany 400,000 crowns ($81,200) to the capital of this association for the
erection of emergency dwellings, and in addition the city of Vienna
granted the free use for 16 years of the building grounds required for
these dwellings. Up to the end of 1911 there had been erected on
these grounds 255 apartments, consisting of one room and kitchen,
at a cost of 574,960 crowns ($116,716.88), or 2,272.56 crowns
($461.33) per apartment. The families housed in these apartments
consisted of 1,535 persons, among whom 906, or 59 per cent, were chil­
dren under 14 years of age. On an average there were, therefore, 6
persons, and among these 3.5 children to an apartment. Only 63.3 per
cent of these families had previously lived in a home of their own
(i. e., in an apartment rented by them), the other 36.7 per cent having
been housed in homes for the homeless, as roomers, or in basements.
By occupation 76.6 per cent of the renters were workmen, 18.3 per cent
were porters in business houses and employees of transportation estab­
lishments, 3.4 per cent were in business for themselves, and the remain­
der were officials. Notwithstanding the extensive material aid by the
city of Vienna, the rents had to be fixed at 26 crowns ($5.28) per
month on account of the short-term amortization of the invested
capital. This amount seems, however, suitable, if it is considered
that 8.5 per cent of the renters had a weekly income of only 20 crowns
($4.06), while in the case of 55.9 per cent the weekly income was be­
tween 20 and 30 crowns ($4.06 and $6.09), of 28.1 per cent between
30 and 40 crowns ($6.09 and $8.12), and of 7.5 per cent over 40
crowns ($8.12).
This action of the city of Vienna was in the same year supple­
mented through the independent activity of the central organization
for housing reform, to which a number of private philanthropists had
made donations amounting to 176,000 crowns ($35,728) for the pur­
pose of providing housing accommodations for the homeless. With
this amount the central organization converted a communal building,
formerly used as a hospital, into a home for the homeless, which could
accommodate daily 10 families and 320 single persons, and in addition
it erected in the tenth ward of the city, at a cost of 84,000 crowns
($17,052), 32 emergency apartments for homeless families. These
apartments consist of one room and kitchen and are rented for 20
crowns ($4.06) a month.'
According to a resolution adopted by the first Austrian housing
conference (Nov. 25 and 26, 1911) the erection of emergency dwellings
and the adaptation of communal and private buildings as such can not,
however, be considered as rational methods of housing work, and all
these measures are justified only because under the existing circum­
stances it was absolutely necessary that a number of dwellings be
immediately put at the disposition of the poorest classes of the
population.




68

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

In addition to Vienna the following municipalities have erected
dwellings for the working classes of their population:
NUM BER

AND

C O ST O F D W E L L I N G S E R E C T E D F O R T H E W O R K I N G C L A S S E S B Y
S P E C IF IE D M U N IC IP A L IT IE S IN A U S T R IA .

Number of—
Province.

Municipality.

Cost.
Houses.

Prague...........................................
O lm iitz.........................................
W iener-N eustadt......................
Krem s...........................................
L inz...............................................
Salzburg.......................................
Gratz.............................................
Carinthia.......................................
D o ........................................... V illach..........................................
Tyrol ............................................. Bozen............................................
D o ........................................... Meran............................................
D o ........................................... R overedo.....................................
Vorarlberg..................................... Dornbirn......................................

B o h e m ia ......................................
Moravia
.....................................
Lower Austria.............................
D o ...........................................
Upper Austria.............................
Salzburg .....................................
Styria ............................................

Apartments.

3
Not given.
18
176
3
77
3
8
2
48
2
20
3
Not given.
2
Klagenfurt...................................
20
6
60
8
76
1
48
5
142
U4

$99,673.
$486,388.
N ot given.
$8,120.
$40,600.
N ot given.
N ot given.
$19,285.
$77,749.
N ot given.
$67,193.
$99,470.
N ot given.

i One-family houses.

Of the above houses those in Wiener-Neustadt and Dornbirn were
erected with the aid of the State housing fund.
In so far as the investigation conducted by the central organiza­
tion for housing reform makes it possible to determine, Austrian
municipalities had built altogether, either for their own workmen or
for the general working classes, 183 houses with about 4,000 apart­
ments, at a cost of 17,043,000 crowns ($3,459,729).
The investigation of the central organization for housing reform
has further shown that a considerable number of municipalities of
Austria have indirectly promoted the public-welfare building activity.
Thirty-two municipalities either sold building sites at reduced prices
or donated them to public-welfare building associations; 30 gave
special privileges as to payment of communal taxes and fees; 16
remitted certain building restrictions; while 23 communes helped
forward the creation of public-welfare building associations by pur­
chasing shares in them, the amount thus invested running up as high
as $40,600. Nine cities guaranteed second-mortgage loans on work­
men's dwellings and 5 made direct loans to public-welfare building
enterprises. The city of Cracow furnished a building site valued at
600,000 crowns ($121,800), the municipality of Wiener-Neustadt cre­
ated a municipal housing fund in 1911, and a similar fund is to be
created in the near future by the municipality of Baden.
PUBLIC-WELFARE BUILDING ENTERPRISES.
COOPERATIVE BUILDING ASSOCIATIONS.

The creation of the State housing fund, which provided an easily
available and cheap source of credit for public-welfare building asso­
ciations, opened to these corporations a wide field for practical activity.




69

GOVERNMENT AID TO HOUSING---- AUSTRIA.

The utility of the fund depended as a matter of fact on their energy
and initiative. Up to a few years ago only persons of a progressive
and enterprising spirit dared, in a few isolated instances, to under­
take the foundation of such associations, the success of which was
from the beginning very problematical, but this state of affairs under­
went a radical change with the creation of the State housing fund.
As recently as in 1897 there existed in Austria only 30 cooperative
building associations and 11 other public-welfare building enter­
prises (societies, stock companies, foundations, etc.). Four years
later, in 1901, the number of cooperative building associations had
increased to 55, while the number of other public-welfare building
enterprises remained unchanged. Under the influence of the 1 Em­
6
peror Francis Joseph I Government Jubilee Fund 1908,” created in
1907, the number of cooperative building associations had at the end
of 1909 reached 230. The number of building enterprises on the
noncooperative plan had increased by only 17 during the same
period. This is proof that in Austria the idea of cooperative organi­
zation had already found a fertile soil in the sphere of housing work,
but the creation in 1910 of the State housing fund caused a still more
rapid development of such building associations. Under the favor­
able prospects opened by this fund, the total number of public-welfare
building enterprises increased from 336 at the end of 1910 to 634 at
the end of 1912, or nearly double the number.
The following table shows the development in Austria of publicwelfare building enterprises:
IN C R E A S E IN

P U B L I C -W E L F A R E B U IL D IN G E N T E R P R I S E S D U R I N G 1897 TO 1912.

[Source: X m Congres International des Habitations k Bon Marchd. La Haye-Scheveningue, septeme
bre 1913. Rapports. Rotterdam [1913], Part 3, p. 29.]

Year.

1897.........................................................................
1901........................................................................
1908...................................................... ..................
1909........................................................................
1910........................................................................
1911.........................................................................
1912.........................................................................

Cooperative
Associa­
building
associa­
tions with
tions with
limited
liability.
limited
liability.

30
55
176
230
306
482
601

4
6
7
8
8

Stock
com­
panies.

4
4
5
5

5
6
6

Founda­
tions.

Societies
and
other
associa­
tions.

1
1
1
1
1
1
1

6
6
13
16
17
17
18

Total.

41
66
199
258
336
514
634

From this it appears that of the 634 public-welfare building enter­
prises existing in Austria at the end of the year 1912, 601, or 95 per
cent, had selected the cooperative form, and only 33, or an insig­
nificantly small fraction, some other legal form of organization. The
particular advantage of this form is that it permits people with very
moderate means, as, for instance, workmen, to participate in pro­
viding the dwellings they themselves desire. The face value of the




70

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

shares is generally very low, usually 100 to 300 crowns ($20.30 to
$60.90), and shares may also be acquired on the installment plan.
On account of increasing the liability of a shareholder up to a certain
number of times the amount of his paid-up share, usually twice, this
form of organization has a sounder credit basis than other forms.
Finally, its democratic form of administration puts in the hands of
its members who are versed in business matters the management
of the association’s affairs, and these, as a rule, give their services
gratuitously or for a merely nominal remuneration.
To facilitate the creation of such cooperative building associations
and to provide uniform rules for their operation, the ministry
of public works has published a set of model by-laws which are to-day
in use by nearly all associations existing in Austria, principally for the
reason that the granting of financial aid by the State housing fund
is made dependent on the adoption of the provisions contained in
these model by-laws.
Legal forms other than the cooperative association with limited
liability are chosen only where housing work of a more charitable
character is in question— i. e., where the parties for whom the
houses are designed do not participate in providing the capital, as,
for instance, where employers erect dwellings for their workmen, or
private philanthropists for the poorest classes of the population.
COOPERATIVE BUILDING ASSOCIATIONS OF GOVERNMENT EMPLOYEES.

The Austrian cooperative building associations are not real estate
mortgage banks, but like those of Germany are actual building asso­
ciations which build on their own account. The classes of the popu­
lation by which such associations are founded are the officials
(.Beamte) and the middle and the working classes. Among the coopera­
tive building associations those founded by employees and workmen
of the Government civil service and of the State railroads were the
first ones to develop an extensive activity. Building associations of
Government officials exist in numerous localities of the State, and
wherever such associations exist they have been active with good
success. The greatest aid to their success has been the u Emperor
Francis Joseph I Government Jubilee Fund 1908/’ mentioned on a
preceding page. There were, however, various other circumstances
which influenced the prosperity of these associations: The permanent
employment of their members, the possibility of filling the managing
offices with persons versed in business matters, and, as a rule, also
learned in law, and last but not least the fact that in some localities
these officials were already members of economic associations, from
which it was relatively easy to form a building association. The
Vienna public-welfare building association was in this manner
formed from among members of the central federation of societies
of Austrian Government officials. This association has already



GOVERNMENT AID TO HOUSING— AUSTRIA.

71

built 6 apartment houses and 2 family houses, having together 140
apartments, and costing 1,669,000 crowns ($338,807). Among other
building associations of Government civil-service employees should
be mentioned those in Klagenfurt— 8 houses with 69 apartments for
a total cost of 756,000 crowns ($153,468)— in Linz-Urfahr (4 houses
with 58 apartments), and in Trieste (3 houses with 42 apartments).
The conditions for the development of building associations of
employees of the State railroads were also generally favorable. The
rapid development of these associations is, in the first place, due to
the fact that the administration of the State railroads granted them
building loans at a very low rate of interest from the State railroads'
old-age and invalidity funds. Additional effective aid is given to the
associations by the administration of the State railroads by means of
subsidies, reductions of freight charges on building materials, and in
individual instances by permitting the payment of shares subscribed
by members of the associations; as well as of rents due, to be effected
by deduction from the wages and salaries of these members.
In contrast to the building associations of officials in the Govern­
ment civil service, which as a rule build only apartment houses, the
building associations of the employees and workmen of the State
railroads build by preference one-family houses to be sold on the
installment plan to the occupants (Eigenhduser). The reason for this
is that railroad employees, especially conductors, brakemen, engineers,
firemen, and others employed in the train service, whose duties require
continuous traveling and constant alertness and are generally very
fatiguing and straining on the nervous system, feel a greater need for
complete rest and quiet and therefore isolation when off duty than
employees in the Government civil service. The erection of colonies
of one-family houses for railroad employees is, moreover, facilitated
by the fact that such houses may be built at any favorable point on
the line of the road outside of the city in which the employee has to
report for work, for the administration grants free transportation
between their places of residence and their working place, not only
to the employees, but frequently also to members of their families for
the purpose of purchasing foodstuffs, and to their children for trips
to and from school.
The following few examples will give some idea as to the results of
the activity of building associations of employees of the State railroads:
The largest of these associations is the association of railroad employees
for the erection of houses for one or more families in Vienna {Einund-Mehr-familienTiduserbaugenossenschaft fu r Eisenbahner in Wien).
Its activity extends over the entire State and during its short existence
of three years it has built 177 one-family houses and 40 houses for 2
or more families with 260 apartments, at an expenditure of 2,898,000
crowns ($588,294). Hardly loss was the activity of the building and




72

BULLETIN OF THE BUEEAU OE LABOR STATISTICS.

housing association of the employees of the Austrian State railroads
in Vienna, which has built 14 houses with 240 apartments, and of the
welfare building and housing association of employees of the State
railroads in Knittelfeld, which erected 56 houses with 198 apartments.
In Bohemia the association “ Stavebni druzstvo zrizencu drah v
zemich Koruny Ceske” in Prague has expended in round figures
1,500,000 crowns ($304,500) for the erection of houses for railroad
employees, and the association “ Stavebni v bytove druzstvo Lesetin”
in Prerau has built 58 one-family houses for such employees.
COOPERATIVE BUILDING ASSOCIATIONS OF PRIVATE SALARIED EMPLOYEES.

Private salaried employees (Privatangestellte) have rarely combined
to organize building associations. The annual report of the General
Pension Institute for Private Salaried Employees for the year 1911
ascribes this to the fact that the private salaried employee lives in a
constant fear because of the impermanence of his position, which he
may lose on relatively short notice either on account of sickness, hard
times, dissolution or bankruptcy of the firm he works for, and for many
other reasons. This fear of losing his position makes it seem undesir­
able for a private salaried employee with his generally very small
means to bind himself to one locality. Besides very frequently the
number of salaried employees in a locality is too small to organize a
building association with a prospect of successful activity.
COOPERATIVE BUILDING ASSOCIATIONS OF W ORKM EN AND OTHERS.

The fact that the members of an individual occupational group
frequently do not feel themselves strong enough to support a cooper­
ative building association has led to the creation of so-called mixed
associations, the membership of which includes all occupational
groups, private salaried employees, teachers, small merchants, work­
men, etc. Mixed building associations, as well as workmen’s building
associations proper, encounter great difficulties in raising the neces­
sary capital stock. While mixed associations are as a rule able to
raise sufficient means of their own, it is very hard for members of
workmen’s building associations to pay up the subscribed shares even
if they are permitted to pay for them in installments. The members
of these associations have, therefore, little prospect of soon securing
apartments erected by the association. Leaders of organized labor
have been fully aware of this fact and have, therefore, from the begin­
ning declined to advocate the foundation of such workmen’s building
associations. A way out of this hopeless situation was possible only
where other parties, as for instance employers, put considerable means
at the disposition of the workmen, or where organized labor, as the
administrator of social-welfare institutions, was itself in a position to
dispose of large funds which could be used for welfare housing work.
The Federation of the District Sick Funds of Vienna and Lower




GOVERNMENT AID TO HOUSING---- AUSTRIA.

73

Austria, which includes 59 sick funds, has in this manner endowed the
public-welfare building association founded by it with 1,000,000
crowns ($203,000), and proposed to erect 4,000 houses in 1912, 1913,
and 1914 with this capital and with the aid of the State housing fund.
Up to 1913 this association built two groups of houses with 378 apart­
ments, at a cost of 1,562,000 crowns ($317,086).
All other Austrian workmen’s building associations proper— i. e.,
associations composed exclusively of workmen— have only very
limited means and the results achieved by them up to date are, there­
fore, very modest. To quote only a few examples, the Workmen’s
Public-Welfare Building and Housing Association of Iglau has
erected one apartment house, 8 one-family and 19 two-family houses;
a like association of Troppau, 8 one-family and 16 two-family houses;
and the Workmen’s Building Association “ Sicheres H eim ” of Znaim,
32 one-family, 2 two-family, and 3 apartment houses. The cooper­
ative association “ Druzstvo pro stavbu laeinych a zdrabych obydli”
of Brunn has built 105 one-family houses for workmen.
As good examples of mixed cooperative building associations may
be mentioned the following with the number of houses each has
built: The association uOstmark” of Vienna, 65 one and two family
houses at a cost of 2,000,000 crowns ($406,000); the association
“ Heimat” of Vienna, 24 houses sold to members, and 1 apartment
house; the Public-Welfare Building and Housing Association of Teplitz-Schonau, 1 one-family house, 7 two-family houses, and 4 apart­
ment houses, at a cost of 500,000 crowns ($101,500); the PublicWelfare Building and Housing Association for Styria of Gratz, 12
apartment houses fcr workmen, costing 1,300,000 crowns ($263,900);
the association uDruzstvo pro stavbu urednickych dom u” of Prague,
a colony of houses with 48 apartments, for 795,000 crowns ($161,385);
the association “ Stavebni druzstvo delnickych a rodinnych domku
pro Plzen a akoli” of Pilsen, 60 houses costing 650,000 crowns
($131,950), and the “ Towarzystwo urzednikow badowy tanich
domoro mieszkalnych ” of Cracow, 9 one-family, 40 two-family, and
6 three-family houses for 1,850,000 crowns ($375,550).
NONCOOPERATIVE PUBLIC-WELFARE BUILDING ENTERPRISES (FOUN­
DATIONS, STOCK COMPANIES, SOCIETIES, ETC.).

The noncooperative building enterprises organized as foundations,
stock companies, societies, etc., are likewise to be considered as
carrying on practical housing reform. The activity of these enter­
prises is chiefly shown in the erection of apartment houses, as most
of them endeavor to provide housing accommodations for the poorest
classes of the population.
On the occasion of the jubilee of the 60 years’ reign of the Emperor
of Austria, the Bohemian Savings Bank of Prague in 1908 created




74

BULLETIN

of

the

bureau

of

labor

s t a t is t ic s .

a fund endowed with 1,200,000 crowns ($243,600) for the erection
of workmen's dwellings, and intrusted to the people's housing
societies (Volkswohnungsvereine) in Prague, Komotau, and Aussig,
which were specially founded for this purpose, the task of the erec­
tion of such dwellings. Only the last-named two societies have
actually built houses— i. e., that of Aussig 10 houses with 141 apart­
ments, and that of Komotau 19 one-family and 7 apartment houses.
The people's housing society created by the savings bank of
Laibach built 10 houses with 81 apartments.
EMPEROR FRANCIS JOSEPH I JUBILEE FOUNDATION.

As regards Vienna, there should be mentioned in the first place
the Emperor Francis Joseph I Jubilee Foundation for the erection
of popular dwellings and welfare institutions ( Kaiser Franz Joseph I.
Jubildums stiftung filr VoTkswohnungen und Wohlfahrtseinrichtungen) which was founded as early as 1896 on the occasion of the
impending jubilee celebrating the fiftieth year of the Emperor's
reign. The foundation was at its creation endowed by the Vienna
Town Extension Fund, which is administered by the ministry of
the interior, with 500,000 crowns ($101,500); by the First Austrian
Savings Bank with 500,000 crowns ($101,500); by the Lower Austrian
Chamber of Commerce and Industry with 40,000 crowns ($8,120),
and by the Lower Austrian Industrial Association with 20,000
crowns ($4,060). The Vienna Town Extension Fund further obli­
gated itself to donate annually to the foundation three-fourths of
the income from a specified large tract of land belonging to it. This
annual donation, which in 1911 amounted to 22,500 crowns
($4,567.50), increases materially the resources of the foundation.
Through donations from philanthropists the means of the founda­
tion had in 1911 reached the amount of 2,739,637 crowns ($556,146). During its 17 years' existence the foundation erected in the
sixteenth ward of Vienna a group of 32 apartment houses con­
taining 482 apartments, and 2 homes for single men and women,
the first having 44 and the second 25 rooms, and in the seventeenth
and twentieth wards 2 model lodging houses constructed after
the English Rowton system, with 1,450 sleeping compartments.
The annual financial report of the foundation for the year 1911
showed that it owned at the end of that year dwellings of a total
value of 4,205,226.50 crowns ($853,661), unimproved building sites
of a value of 213,443.86 crowns ($43,329), and furniture and equip­
ment of the dwellings erected of a value of 219,205.98 crowns
($44,499).
In 1911 the group of apartment houses, inclusive of the home for
single men (the home for single women had been rented to the Aus­
trian Association for the Protection of Mothers), housed, according
to the above-mentioned report, 1,752 persons, of whom 636 were



GOVERNMENT AID TO HOUSING---- AUSTRIA.

75

children under 14 years of age. The monthly rents charged for the
383 apartments available in the colony were as follows:
Twenty-four apartments with one room equipped with a cookstove, 14 crowns ($2.84) and up.
Forty-six apartments with one small room and kitchen, 14.50
crowns ($2.94) and up.
Two hundred and fifty-one apartments w~ith one large room and
kitchen, 19 crowns ($3.86) and up.
Forty-four apartments with one large and one small room and
kitchen, 29 crowns ($5.89) and up: and
Eighteen apartments with 2 rooms and kitchen, 34.50 crowns ($7)
and up.
The foundation includes in the rents a proportional charge for the
use of the welfare accommodations connected with the colony, for
janitor service, etc. This system has worked very well in practice,
for the renter pays only one fixed charge for rent and other privileges
and the foundation is saved complicated computations and numerous
collections.
The group in the sixteenth ward consists of two blocks of houses
separated by a private street. Each house has four stories, basement,
and attic, and faces in the rear on a large garden located in the center
of the block in which is also a playground for the children. The
houses have stone stairways and not more than four apartments to
a floor, so that the maximum number of apartments to one house is
never more than 16. In the houses first built the legal minimum
floor space of 20 square meters (215.3 square feet) for rooms without
kitchen, 16 square meters (172.2 square feet) for rooms with kitchen,
and 8 to 9 square meters (86.1 to 96.9 square feet) for kitchens and
small rooms was exceeded only if this was necessary for architectural
reasons. In the houses last built the kitchens have a floor space of
9 to 12 square meters (96.9 to 129.2 square feet), and the rooms of
20 to 25 square meters (215.3 to 269.1 square feet), and in order to
comply with the demand apartments consisting of only 1 room
and kitchen were prevailingly constructed. The height of the rooms
was generally 3 meters (9.8 feet). To each apartment belongs a
toilet room with sanitary water-closet and flushing device. Run­
ning water is installed in the hall of each floor.
To prevent overcrowding the foundation strictly prohibits the
keeping of roomers or lodgers (Bettgeher) in family houses, and by
the erection of homes for single male and female workers has pro­
vided housing accommodations in the colony also for unattached
persons.
The colony houses the following welfare institutions: Laundries,
a bathing establishment with departments for men, women, and chil­
dren, a dispensary, a popular library, a lecture room, a nursery,




76

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

cooking and sewing schools, and a gymnasium. Also, there are vege­
table gardens. The use of all these conveniences, except the vegetable
gardens, is free to the families, and for the use of the latter the annual
rental per garden plot of 25 square meters (269.1 square feet) is only
6 crowns ($1.22).
Notwithstanding all these advantages the rents charged for these
apartments are, as a rule, 8 to 10 per cent cheaper than the rents of
apartments in the neighborhood of the colony, which explains the
fact that the net income from the houses of this colony is only 3.55
per cent of the capital invested.
The rents in the home for single men, which is also located in the
colony, include likewise the free use of all the welfare institutions of
the colony, as well as the cleaning of the rooms. The rooms in this
home are furnished and rent for 3.50 crowns (71 cents) per week if
they contain only one bed and 5.50 crowns ($1.12) if they have two
beds.
The following list, which shows the varied occupations of the renters
of the apartments in the colony, should be of interest:
O C C U P A T IO N S O F T E N A N T S O F T H E B R E IT E N S E E C O L O N Y O F W O R K M E N ’ S D W E L L ­
IN G S E R E C T E D B Y T H E E M P E R O R F R A N C IS JO SE P H I J U B IL E E F O U N D A T I O N F O R
T H E E R E C T IO N OF W O R K M E N ’ S D W E L L I N G S A N D W E L F A R E IN S T IT U T IO N S IN 1911.
[Source: Sechzehnter Jahresbericht der Kaiser Franz Joseph I. Jubilaums-Stiftung fur Volkswohnungen
und Wohlfahrtseinrichtungen liber das Jahr 1911..1
Occupation.

Painters, journeymen.....................................
Bakers, journeymen........................................
Office clerks (in private and Government
em ploym ent).................................................
Sculptors, journeymen...................................
Bronze workers, journeymen......................
Bookbinders, journeymen............................
Printers, journeymen.....................................
Bookkeepers.......................................................
Publisher’s clerk...............................................
Messengers and porters..................................
Turners, journeymen......................................
Turners of iron, journeym en......................
Tu tor.....................................................................
Butchers and sausage makers, journey­
m en....................................................................
Barber, journeym an.......................................
Grocer....................................................................
Lady companion...............................................
Gardener, journeyman...................................
Glass workers, journeymen...........................
Goldsmiths, journeymen..............................
Engravers, journeym en.................................
Braziers, journeymen.....................................
Potters, journeymen.......................................
Commercial clerks............................................
Domestic servants...........................................
Superintendent of buildings........................
Unskilled female workers.............................
Passementerie workers, journeymen........
Editors.................................................................
Saddlers-, journeymen....................................
Tailors, journeym en.......................................
Type founders and setters, journeymen..
Shoemakers, journeymen..............................
Silk finishers, journeymen............................
Policemen...........................................................
Lithographer, journeyman...........................
Stonecutter, journeyman..............................
Street-car employees.......................................




Number.

Occupation.

Trunk makers, journeymen.......................
Unskilled male workers (gas, railroad,
e tc .)..................................................................
Hatters, journeymen.....................................
Technical engineer.........................................
Comb makers, journeymen.........................
Copyists.............................................................
Cashiers..............................................................
Waiter.................................................................
Piano maker, journeym an.........................
Piano tuner.......................................................
Cook.....................................................................
Store clerks.......................................................
Office clerk, fem ale,.......................................
Proof readers..............................................
Nurses, male and female.............................
Art embroiderer..............................................
Drivers...............................................................
Lacquerers, journeymen.............................
Leather workers, journeymen...................
W arehouse workers.......................................
Machinists and metal workers, journey­
men .................................................................
Brick masons...................................................
Milk dealer........................................................
Musician.............................................................
Optician, journeyman..................................
Pensioners, male and fem ale.....................
Plasterers, journeymen................................
Upholsterers, journeymen..........................
Stage hand........................................................
Joiners, journeymen.....................................
Cigar and tobacco dealer (fem ale)...........
Watchmaker, journeyman.........................
Gilder, journeyman.......................................
Saleslady...........................................................
Painters, journeymen...................................
Carpenter, journeyman................................
Chasers, journeymen....................................
Confectioners, journeymen....................... .

Number.

22

1
6
1

2
3
5
1

1
1
1
3
1
2

4

1

4

2

10

G
1
1

1

29
3

2

1
1
1
1
1
3
1

17

GOVERNMENT AID TO HOUSING-----AUSTRIA.

77

The foundation appoints for each house of this group a superin­
tendent selected from among the tenants of the house, who, in con­
sideration of a reduction of his rent, assumes the general supervision
of the house, the opening and closing of the house door (at 6 a. m. and
10 p. m.), the airing of the halls and stairways, the giving of informa­
tion, and the registration of the tenants with the police authorities.
For the cleaning work proper and the maintenance of the garden the
foundation employs salaried janitors. The superintendents of the
individual houses and the janitors are all subject to the orders of the
administrator of the colony, who has his office in one of the houses.
He is charged with the supervision of the entire colony, the renting
of the individual apartments, and the collection of the rents. Apart­
ments are leased only by the month, the rent being payable semi­
monthly. Renters may leave or be ordered to leave on two weeks’
notice.
On renting an apartment the tenant is handed a card, giving a
description of the apartment, an inventory, the highest permissible
number of occupants, and the amount for which the apartment is
being rented. Other columns provide for personal particulars as to the
tenant and the members of his household (name, age, occupation,
etc.), the date on which the apartment was rented, its condition at
the time the tenant moves in and leaves, and the time limit and the
reason for giving notice. Copies of this card are kept on file by the
administrator of the colony and by the secretary general of the foun­
dation. With this card the renter receives also a copy of the house
rules. Special rules for the use of the various welfare institutions in
the colony are posted in the entrance hall of each house.

The administration of the colony insists on strict observation of
the house rules and prompt payment of rents, but otherwise exer­
cises no paternalism over the tenants. Regular inspections of the
houses, at which a representative of the secretary general of the
foundation is present, make it possible for the foundation to ascer­
tain the condition in which the apartments are kept by the tenants
and give the tenants an opportunity to bring special wishes, sugges­
tions for improvements, and complaints to the knowledge of the
secretary general of the foundation.
The foundation does not permit tenants of its apartment houses
to keep lodgers (BettgeJier)— i. e., persons who rent merely a bed— in
this manner taking the first step in combating this system of keep­
ing lodgers, which is one of the worst evils in the housing system of
large cities in Austria. At the same time it recognizes the necessity
of finding means to provide housing accommodations for unattached
persons of the poorest classes of the population. In attacking this
problem the foundation came soon to the conclusion that to combat
effectively this custom of keeping lodgers by poor families it would




78

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

be necessary not only to replace the sleeping accommodations now
used for lodgers by essentially better accommodations, but also to
furnish them at a rental not higher than the prevailing charges. In
1904 the rent paid in Vienna by lodgers ranged; according to the
accommodations, from 2 to 3 crowns (41 and 61 cents) per week, and
was, therefore, on an average 2.50 crowns (51 cents). This corre­
sponded to the principle that a wageworker should not spend more
than 15 per cent of his income for rent, for according to official sta­
tistics 1 the average weekly wages in Vienna of unskilled workmen
were 16.80 crowns ($3.41) and those of skilled workmen 21 crowns
($4.26). These two classes form the chief element among lodgers,
and a weekly rent of 2.50 crowns (51 cents) corresponds to their
economic conditions. It was, therefore, a question of providing
sleeping accommodations which could be rented for this price to un­
attached workmen and so equipped that they not only offer com­
fortable housing, but also meet far-reaching moral and hygienic
requirements.
Hygienic lodging houses on a large scale will, however, be erected
by private enterprise only if it is reasonably certain that the capital
invested in such houses will yield a sufficient income. To make this
possible the law of July 8, 1902, which has been discussed at length
on a previous page, grants to such lodging houses 24 years’ exemption
from imperial, provincial, and communal taxes, and determines also
the maximum permissible income from such lodging house, which
for Lower Austria, of which Vienna is the capital, was fixed at 4f
per cent.
The Emperor Francis Joseph I Jubilee Foundation hastened to
make use of the privileges of this law, and on September 15, 1904,
began the building of a large model lodging house, which on October
15, 1905, was opened for the use of workmen. This lodging house is
located in the Brigittenau, the twentieth ward of Vienna, a growing
district with numerous industrial establishments. It is in the immedi­
ate neighborhood of two large railroad terminal stations, and within
a few minutes’ walk from four traction lines. Lodgers wishing to
walk may reach the central part of the city in 35 minutes.
The building occupies an area of 2,476 square meters (26,651.6
square feet), of which only 1,325.5 square meters (14,267.7 square
feet) are covered by buildings proper, while the rest of the area is
given over to a courtyard laid out as a garden. The building has
five stories and a basement, and through effective grouping of its
wings it was made possible for all rooms to have a direct supply of
air and light. The plans for the building were based on the system
of the Rowton houses in London, the sleeping compartments being
located in the upper stories only, while all rooms designed for use




1 Mitteilungen des Ministeriums des lnnern, No. 14,1901.

GOVERNMENT AID TO HOUSING---- AUSTRIA.

79

by the lodgers during daytime or for administration purposes are
located on the main floor and in the basement.
On the main floor are the administration offices, a large dining
room with seating capacity for 284 persons, in which nourishing meals
are served at very moderate prices, a kitchen for lodgers wishing to
prepare their own meals, two large reading rooms, one for smokers
and the other for nonsmokers, a room with lockers for the clothing
of the lodgers and an adjoining room where they may change their
clothing during daytime, a free dispensary, a sick room with four
beds, and a toilet room.
In the basement are located the bathing establishment with 18
cement bowls for foot baths, 13 hot and 3 cold showers, 7 compart­
ments with bathtubs and a wardrobe for the bathers; a barber shop,
shoemaker's shop, and tailor shop, storerooms, the engine and boiler
room, a disinfection room, and a room where lodgers may clean their
shoes and clothing.
The second, third, fourth, and fifth floors, in which the sleeping com­
partments are located, are similar in all respects. Each floor is 3
meters (9.8 feet) high, and consists of two sections, each of which is
reached by means of a separate stairway. Each section consists, in
addition to 4 toilet rooms, a tool room, and a service room, of 3 large
halls, in which are the sleeping compartments for the lodgers. Each
lodger has a floor space of 4 square meters (43.1 square feet) and an
air space of 12 cubic meters (423.8 cubic feet).
The sleeping compartments have doors opening inward and are
arranged on both sides of a corridor. The walls separating the indi­
vidual compartments are constructed of reinforced concrete and are
only 2 meters (6.6 feet) high, so as to permit free circulation of the
air. The furniture of each compartment consists of an iron bed with
springs, mattress protector, 3-piece mattress, hair pillow, 2 bed sheets,
and a double wool blanket, a linoleum bed mat, a stool, a clothes
hanger, and a chamber. The 8 wash rooms, which in contrast to the
Eowton houses are located on the separate floors, are each equipped
with 18 washbowls with direct supply of running water and direct
drain, stands for glasses, soap, and brushes, looking glasses, and a
corresponding number of roller towels. The sleeping compartments
may be used by the lodgers only between 8 p. m. and 9 a. m.
On each floor are 136 sleeping compartments available for lodgers,
making a total of 544 in the building. The sleeping compartments
being distributed in 24 separate halls, it is possible to take individual
halls out of operation, and to classify lodgers when assigning rooms.
The entire house is electrically lighted and is heated by steam.
The costs of construction, ground, and equipment of this model
lodging house were 660,000 crowns ($133,980).




80

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

The charge for the use of sleeping apartments is 2.8 crowns (57
cents) per week, 1 crown (20 cents) for two consecutive nights, and 0.6
crown (12 cents) for one night. The clerk in charge receives money
and valuables for safekeeping, free of charge. A charge of 5 heller
(1 cent) per night, and 10 heller (2 cents) for longer periods is made for
the storage of baggage. Lockers are rented to lodgers at a charge
of 10 to 20 heller (2 to 4 cents), according to the size of the locker.
The charge for a shower bath is 10 heller (2 cents) and for a tub bath
30 heller (6 cents), inclusive of towels.
This lodging house became so popular among the working classes
that during the year 1909 on an average 97.71 per cent of the
sleeping compartments were occupied. On many nights all beds
were taken by 7 p. m. and numerous applicants for sleeping accom­
modations had to be turned away.
The success achieved with this first model lodging house induced
the board of directors of the foundation, on the occasion of the jubilee
celebrating 60 years' reign of the Emperor, to erect in Hernals,
another industrial district of Vienna, a second and much larger lodg­
ing house. This new lodging house, the largest of its kind on the
Continent, was built according to the same principles as the first one,
and cost 1,385,000 crowns ($281,155), but in addition to 813 sleep­
ing compartments equipped like those in the lodging house first
built, the administration arranged 77 better furnished special com­
partments which were rented at 4.20 crowns (85 cents) per week, at
1.40 crowns (28 cents) for two consecutive nights, and at 80 heller (16
cents) for a single night. These special compartments are larger
than the ordinary compartments, and, in addition to being better
furnished, are each of them equipped with a porcelain washbowl with
running water. They are intended to accommodate workmen who
either desire better accommodations or who work nights and have to
sleep in the daytime, during which the ordinary compartments are
closed to lodgers. Both of these lodging houses are open only to
male workers over 14 years of age whose annual income does not
exceed 1,500 crowns ($304.50).
In 1911 the lodging house in Hernals housed 6,555 lodgers and the
one in the Brigittenau 4,282 lodgers. Three-fourths of these lodgers
rented sleeping compartments by the week. The average time during
which lodgers stayed at these lodging houses was 47.88 and 46.49
days, respectively. Of the entire number of sleeping accommoda­
tions available, on an average 96.6 per cent in Hernals and 99.72
per cent in the Brigittenau were rented. The net income from these
two houses was 4.60 and 3.96 per cent, respectively.




81

GOVERNMENT AID TO HOUSING---- AUSTRIA.

Below are given a few interesting statistics as to the age, conjugal
condition, occupation, and annual income of the patrons of these
lodging houses:
A G E , C O N JU G A L S T A T E , O C C U P A T IO N , A N D A N N U A L IN C O M E O F L O D G E R S O F T H E
T W O L O D G IN G H O U S E S O P E R A T E D B Y T H E E M P E R O R F R A N C IS J O S E P H I J U B IL E E
F O U N D A T I O N F O R P O P U L A R D W E L L I N G S A N D W E L F A R E IN S T IT U T IO N S D U R IN G
1911.
[Source: Sechzehnter Jahresbericht der Kaiser Franz Joseph I. Jubilaums-Stiftung fur Volkswohnungen
und Wohlfahrtseinrichtungen uber das Jahr 1911.]

Lodgers in the lodging house in—

Ilernals.

Brigittenau.

Number.

Age:
14 to 20 years..........................................................
21 to 35 years...........................................................
36 to 50 years..........................................................
Over 50 years.........................................................
Conjugal state:
Single.........................................................................
Married.....................................................................
W idow ed.................................................................
Divorced or separated.........................................
Occupation:
Industrial workmen (journeym en)...............
Industrial workmen (unskilled)....................
Store clerks.............................................................
Drivers.....................................................................
W aiters.....................................................................
Messengers and porters......................................
Copyists...................................................................
Pensioners...............................................................
Employees of transportation lines................
Apprentices.............................................................
Agricultural workers, gardeners, and others
Annual income:
U p to 1,000 crowns ($203)..................................
Up to 1,200 crowns ($243.60)............................
Up to 1,500 crowns ($304.50)............................

Per cent.

1,152
3,586
1,190
627

17.57
54.71
18.15
9.57

496
2,469
1,037
280

11.58
57.66
24.22
6.54

5,183
937
282
153

79.07
14.29
4.30
2.33

3,619
449
136
78

84.52
10.49
3.18
1.82

3,055
1,760
654
189
173
159
144
70
56
16
279

46.61
26.85
9.98

2,020

47.17
26.83
10. 72
4.53
2.48
2.43

3,422
2,470
663

52.20
37. 68

2.88
2.64
2.43

2.20
1.07
.85
.24
4.26

1 .1
01

1,149
459
194
106
104
59
32

1
.38

119

.75
.47
.47
2.78

962
1,737
1,583

22.47
40.57
36. 9 7

20
20

The foundation has prepared plans for the erection in the tenth
ward of Vienna of a group of houses with about 100 family apart­
ments, and of a third lodging house with about 1,300 sleeping com­
partments, construction of which was to begin in the fall of 1913.
OTHER PUBLIC-WELFARE BUILDING ASSOCIATIONS.

In addition to this foundation there are in Vienna two other publicwelfare building associations which have developed a very merito­
rious activity. These are the First Public-Welfare Building Asso­
ciation for the erection of dwellings with small apartments (Erste
Gemeinnutzige Baugesellschaft fu r Kleinwohnungen) and the PublicWelfare Stock Co. for the erection of dwellings with small apart­
ments (Gemeinnutzige aktiengesellschcift fu r Kleinwohnungsbau). The
former has built two groups of houses with 353 apartments, at a
cost of 1,577,000 crowns ($320,131), and the latter 4 apartment
houses with 77 apartments, at a cost of 620,000 crowns ($125,860).
6 6 1 7 1 ° — B u ll. 1 5 8 — 15 ---------6




82

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

Both of these associations have as their object the remedying of the
scarcity of small apartments for the working classes in Vienna.
Unfortunately, in order to make the buildings self-sustaining, it
was necessary to place the rents at a figure which only the betterpaid workmen can afford. In the buildings put up by the second of
the associations named above, rents ranged from 468 crowns ($95)
a year for the cheapest apartments, consisting of one room, a kitchen,
and a hall, up to 630 crowns ($127.89) for the more desirable of the tworoom apartments. It is generally considered that for this class of
workmen not more than one-fifth of the entire income should be
spent for rent. On this basis these improved apartments would be
available only for workers whose yearly earnings were not less than
2,340 to 3,150 crowns ($475 to $639.45). Such earnings, while not
unknown in Vienna, are rare. “ Workmen who on an average earn
71 crowns ($1.52) a day are very rare in Vienna.” Such wages as
approximate $2 a day “ are reached only by the aristocrats among
the workmen.” “ Considering their advantages, the apartments are
not too high priced, but the average wages of workmen are too lowr to
permit them to purchase these advantages.” 1
Of other public-wT
elfare building associations governed by principles
similar to those discussed above should be mentioned the following:
The First Public-Welfare Building Association for Workmen’s Dwell­
ings ( Erste gemeinnutzige Baugesellschaftfv/r Arbeiterhduser) in WienerNeustadt (17 houses with 158 apartments); the Public-W elf are Cor­
poration for the erection of workmen’s dwellings and dwellings with
small apartments (Gemeinnutzige Baugesellschaft fu r Arbeiter und
Kleinwolmungen) in Briinn (6 houses with 108 apartments); the
Association for the Erection of Workmen’s Dwellings (Gesellschaft
fu r den Bau von Arbeiterwohnungeri) in Prague (70 houses with 423
apartments); and the Building Association for the Erection of Popu­
lar Dwellings (Societa Triestina Construttrice di Edifici Populari) in
Trieste (4 apartment houses, 24 two-family and 131 one-family
houses, with a total of 314 apartments).
The Austrian public-welfare building associations differ widely as
to whether they should devote themselves to building tenements or
one-family houses to be owned by the occupant. The importance of
the one-family house is admitted, the only doubt being whether it is
economically defensible. Housing and economic experts have ad­
vised against the erection of such houses for ownership by people of
small means, except where the cost of ground and of building is so
small that the amount the purchaser must payfor interest and principal
need not be higher than the usual local rent for an apartment of like
size. Further, the purchaser should have a reasonable certainty of




1 Arbeiter Zeitung, Vienna, November 15, 1913.

GOVERNMENT AID TO HOUSING---- AUSTRIA.

83

a permanent income, and be able to make from his own means a first
payment of at least 15 per cent of the cost of the house.
The administration of the State does not seem to view with great
favor the erection by building associations of one-family houses to
be sold to the occupant. It has absolutely prohibited the Emperor
Francis Joseph I Government Jubilee Fund from making loans on
such houses, and loans by the State housing fund on such houses have
been conditioned on compliance with a number of stringent provi­
sions. The danger of speculative exploitation of such financial aid
played a great part in the enactment of these restrictive regulations.
In addition to famity and apartment houses the Austrian publicwelfare building associations have in recent years also built homes for
single persons (Ledigenheime). Such homes were built in two forms,
first, actual homes for single persons, as they are built in Germany, in
which furnished rooms are rented, and, secondly, sanitary lodging
houses, after the pattern of the English Rowton houses, which are
intended only for temporary housing of the poorest classes of the
population. Primitive lodging houses were also built in several
localities by employers, especially by mining companies and iron and
steel w~orks.
STATISTICS OF PUBLIC-WELFARE BUILDING ENTERPRISES.

The latest published official statistics as to public-welfare building
enterprises in Austria are based on the investigation of April 17, 1909,
and, therefore, do not show the effect on the development of public
housing work of the law of December 22, 1910, which created the
State housing fund. The only statistics of recent date available
are the results of a private investigation undertaken in 1913 jointly
by the central organization for housing reform {Zentralstelle fu r
*Wohnungsreform) in Vienna, the Bohemian Provincial Association
for Housing Reform (Oesky zemsky spolelc jpro reformu bytovou) in
Prague, and the Moravian Provincial Association for Housing Reform
{Zemsky svaz pro reformu bytovou) in Briinn. These results were
presented to the Tenth International Housing Congress by Dr. Ewald
Pribram and are reproduced here.
These three associations sent out 634 schedules, of which 405, or
64 per cent, were returned filled in. That such a large number of
building associations did not make any returns may be explained
partly by the fact that 120 of them were organized in 1912 and
had no positive activity to show, and partly by lack of time or edu­
cational training of the directors of such organizations. In the fol­
lowing tables, of which the first shows the general activity of Austrian
building associations, were included only the 405 reporting associa­
tions.




84

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

G E N E R A L S T A T IS T IC S O F C O O P E R A T IV E A N D O T H E R P U B L I C -W E L F A R E B U I L D I N G
A S S O C IA T IO N S IN A U S T R IA A T T H E E N D O F T H E Y E A R 1912.
[Source: X ^ Congres International des Habitations a Bon Marche. La Ilaye-Schdveningue, septembre
1913. Rapports. Rotterdam [1913]. Part 3, p. 39.]

Associa­
tions.

Fam ily
and apartment houses
erected or in process of construction.
Capital
invested
in build­
ings and
building
lots.

Total
amount of
paid-up
N um ­
ber shares or of
N um ­
capital.
re­
ber.
port­
ing.

Cooperative building associa­
tions .............................................
Other building associations. . .

601
33

384
21

Total....................................

634

405

$1,264.183 $10,394,006
1,439^ 280
2 , 573,634
2,703,463

12,967,640

N um ­ N um ­
ber
ber
with
with
one
two
apart­ apart­
ment. ments.

N um ­
N um ­
ber
ber
with
with
more Total.
three than
apart­ three
ments. apart­
ments.

928
263

294
32

46
1

303
197

1 2 ,963

1,191

326

47

500

1 3,456

Number of apartments in these houses consisting of—

One
Two
One
room,
room,
rooms
and
without
with
kitchen. kitchen. kitchen.

U n­
Three
known
or more
number
rooms
of rooms
and
and
kitchen.
kitchen.

Total.

493

Houses erected
for single persons.

N um ­
ber.

N um ­
ber of
rooms.

Cooperative building associa­
tions ..............................................
Other building associations...

150
158

1, 458
1, 801

1,141
'469

926
195

2,988
84

6, 663
2, 707

1
4

75
1,519

Total.....................................

308

3,259

1,610

1,121

3,072

9, 370

5

1,594

1 In this number are included 1 392 houses, for which the number of apartments could not be deter­
mined; however, 1,351 of them are beyond doubt houses with not more than 3 apartments.

The above table shows that the 405 public-welfare building enter­
prises included in the investigation erected 3,456 family and apart­
ment houses, with 9,370 apartments, and 5 homes for single per­
sons, with 1,594 bedrooms, at a total cost of $12,967,640. As
nearly all these dwellings were erected during the last 10 years, and
the majority of them even during the last five years, and as the
total increase in dwellings during the last decade was 294,485 for
all Austria, 1.2 per cent of the new dwellings were erected by
public-welfare building associations.
The progress of public-welfare activity may be best judged by
comparing the above data with those of an investigation as to publicwelfare housing work undertaken in 1909 by the statistical central
commission.1 According to this investigation, in April, 1909, 579
houses, with 2,795 apartments, had been erected by self-help organ­
izations. At the end of 1912 the number of houses erected by
1 Die gemeinnutzigen Kleinwohnungsanlagen in den im Reichsrate vertretenen Konigreichen und
Llindern nach der Erhebung vom 17 April, 1909, auf Veranlassung des k. k. Ministeriums fiir offentliche
Arbeiten bearbeitet von der k. k. statistischen zentral kommission. Briinn, 1901.




85

GOVERNMENT AID TO HOUSING---- AUSTRIA.

public-welfare building associations had, therefore, increased by
2,877 and the number of apartments by 6,575.
In the two tables following is shown separately the activity of
cooperative and noncooperative building associations by Provinces:
O P E R A T IO N S O F A U S T R IA N C O O P E R A T IV E B U IL D IN G
OF T H E Y E A R 1912.
[Source:

X ?*

A S S O C IA T IO N S T O T H E E N D

Congres International des Habitations a Bon Marche. La Haye-Scheveningue, septembre
1913. Rapports. Rotterdam [1913]. Part 3, pp. 42 and 43.]

Asso­
ciations.

Province.

Fam ily and apart­
ment
hou ses
erected or in proc­
ess of construc­
tion w ith—

N um ber of asso­
ciations
composed of—

Capital
Total
Total
invested in
m em ­ amount of buildings
ber­
paid-up
and
M ix­
Num ­
ship.
shares.
building
Two Three
One
N u m ­ ber
Offi­ W ork­ ed
lots.
re­
apart­ apart­ apart­
mem­
ber.
cials. men.
port­
ber
ment. ments. ments.
ship.
ing.

Lower Austria:
V ienna on ly. . .
0 n ts id e of
Vienna..........
Upper Austria........
Salzburg....................
S ty r ia ..= ..................
Carinthia..................
Carniola....................
Tyrol..........................
Vorarlberg................
Coastland..................
D almatia..................
Bohemia:
German asso­
ciations..........
Czech associa­
tions................
Moravia:
German asso­
ciations..........
Czech associa­
tions................
Silesia........................
Galicia.......................
B ukow ina...............
T otal..............

54

29

7

4

18

9,120

i $432,958

$1,921,395

159

42

10

27
9
5
14
3
9
13
1
12
5

12
5
2
9
3
3
8
1
3

2

4

40,387
28,166
8,648
73,141
19,204
4,019
29,273
10
9,602

349,972
237,307
43,442
557,844
262,885
94,801
313,635

19
6

2

2

1,018
569
279
2,223
851
110
440
25
426

76
4

1
2

6
5
1
5
3
1
6
1
2

59
19
23

21
4
3
7

5

34

3,159

134,508

755,566

51

17

136 11,840

322,516

3,428,264

1
2

1

1

1

125,657

82

.54

4

16

188

174

16

22

29

16

3

3

10

2,132

47,198

351,393

57

37

2

67
29
49
5

42
15
7
1

3
4
4
1

32
5

7
6
3

2,100
1,190
937
95

45,888
27,090
36,824
4,750

720,041
306,124
529,627
396,053

463
20
17

45
19
40

3

601

384

51

89

244 36,514

1,264,182

10,394,006

928

294

46

31

6

i Included in this amount is the paid-up capital of two associations the activity of which extends over all
Austria; the dwellings erected by them are shown in this table in the individual Provinces in which they
are located.




86

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

O P E R A T IO N S OF A U S T R IA N C O O P E R A T IV E B U IL D IN G A S S O C IA T IO N S T O T H E E N D
OF T H E Y E A R 1912— Concluded.

Fam ily and apartment houses
erected or in process of con­
struction w ith—

Province.

Lower Austria:
V ienna only
Outside of
V ienna
Upper Austria
Salzburg..............
Styria...................
Carinthia............
CarnioJa...............
T yrol....................
Vorarlberg..........
Coast land............
D alm atia............
Bohemia:
German as­
sociations
Czech asso­
ciations. . .
Moravia:
German as­
sociations
Czech asso­
ciations
Silesia...................
Galicia.................
Bukowina...........
Total

N um ­
ber
of
N um apart­
, ber
More
ments
than
of
un­
three
apart­
known
apart­ ments
but
un­
ments.
not
known.
more
than
three.

U n­
Three
One
One
Two
known
or
N um ­
room room rooms more
num ­
ber
To­
To­ N um ­
and no and
and rooms ber of
of
tal.
tal. ber.
kitch­ kitch­ kitch­ and
bed­
rooms
en.
en.
en.
kitch­
and
rooms.
en. kitchen.

39

250

248

284

251

10
8
8
64
9
2
18

111
20
8
154
32
28
20

104
33
15
124
36
18

104
43
22
179
24
9
55

62
54
16
31
70
29
109

6

5

6

6

33

24

207

137

109

33
1,324

Houses
erected for
single
persons.

Number of apartments in these houses
consisting of—

132

54

3
27
1

41

1,378

1380 1,105
3
2 208

1

273
133
53
509
130
57
164
63

494
3 2,250 2.250

24
22

120

12

121

63

51

247

9
12
1

520
73
64
41

23
31
10

488
35
23

107
49
32

27
37
56

645
176
12li..........
19.3!

41 42,903

150

41
1,351

303

24
3 123

1,458

1,141

926

5 2,988 6,663

1

75

1 Including 378 w ith not more than 2 rooms and kitchen.
2 Including 198 with not more than 2 rooms and kitchen.
3 Estimated.
4 In this number are included 1,392 houses for which the number of apartments could not be determined;
1,351 of them are, however, houses with not more than 3 apartments.
5 Including 576 w ith not more than 2 rooms and kitchen.




87

GOVERNMENT AID TO HOUSING---- AUSTRIA.
O P E R A T IO N S OF A U S T R IA N N O N C O O P E R A T IV E B U I L D I N G A S S O C IA T IO N S
P U B L I C -W E L F A R E C H A R A C T E R TO T H E E N D O F T H E Y E A R 1912.

OF

A

[Source: X m Congres International des Habitations a Bon Marche. La Haye-Scheveningue septembre
e
1913. Rapports. Rotterdam [1913]. Part 3, pp. 44 and 45.]

Number of associations organized as—

Province.

Associa­
tions with
limited
liability.

Lower Austria:
Vienna on ly ..
Outside
of
Vienna
1
TTrmpr Austria
Hftlzhiirj*
..'
Styria
. ...
Carinthia...............
Carniola
Tyrol
Vorarlberg
Coastlard
D alm atia...............
Bohemia:
German as­
sociations . .
Czech asso­
ciations
Moravia: German
associations. . . .
Silesia
. .
Galicia
.
Bukow ina.............

Stock
com­
panies.

Societies.

Founda­
tions.

2

1

1

3
1

Total
amount of
paid-in
capital
(stock or
foundation
capital).

Capital in­
vested in
buildings
and build­
ing lots.

$949,451

$1, 444, 548

1
1

40, 600
20,300

48,923
44, 254

3

1

101, 500

169,099

498,974

7

6

4

2

2

1

1

1
1

1

2

2

1

3

5

3

223, 300

2

1 ;

3

3

9,186

88, 102

1
1 I

1

3
1 i

5
2

2
2

86,823
8,120

184,324
95, 410

8 1
|

6

18 I
'

33

21

1,439, 280

2,573, 634

!
j

1

_____

Family and apartment houses
erected or in process of con­
struction.

N um ­
ber
with
one
apart­
ment.

N um ­
ber
with
two
apart­
ments.

N um ­
N um ­
ber
ber
with
with
more
three
than
apart­ three
ments. apart­
ments.

Number of apartments in
houses consisting of—

One
room
and
no
kitch­
en.

Lower Austria:
Vienna o n ly..
Outside of V i­
enna .............
Upper Austria___
Salzburg.................
Styria.......................
Carinthia................
Carniola..................
T y rol........................
Vorarlberg.............
Coastland. .............

One
room
and
kitch­
en.

these

4

54 |
81 !
32 !
58

19
68
45

263




86

106 !

2 | 537

....! 76 i..... !......
13
27

58
27

197 493

25
89

Houses
erected for
single per­
sons.

U n­
Three
Two
Num.
or
known
rooms more num ­
N um ­ ber
and rooms ber of Total,
of
ber.
kitch­ and
rooms
bed­
en. kitch­
and
rooms.
en. kitchen.

33

Bohemia:
German asso­
ciations........
Czech
asso­
ciations........
Moravia: German
associations........
Silesia........
Galicia. . .
Bukowina.
Total............

Total.

3

___

T o ta l...........

Province.

Number
of asso­
ciations
reporting.

149
57

158 1,801

249 !

622
84

2>
i

1,519

88

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

The table giving the operations of cooperative building associa­
tions shows that the 384 building associations reporting had a total
membership of 36,514, or an average membership of 95 per associa­
tion. This relatively high average is to be ascribed to the fact that
individual associations, as, for instance, the building association of
railroad employees in Vienna, had a membership far in excess of
1,000. The majority of the associations had not more than 50 to 70
members.
According to the occupation of their members, 89 associations were
entirely composed of workmen, 51 of public officials, and the members
of the remaining 244 had various occupations. The total amount
of paid-up shares in the 384 reporting associations was 6,227,500
crowns ($1,264,182), or about 170.6 crowns ($34.63) per member. As
a matter of fact the members have contributed considerably higher
amounts, for in the case of one-family houses purchased by them they
have to make a first payment of at least 10 to 15 per cent of the cost
of these houses, but such payments are, of course, not included in
the shares of the members. The capital invested by the reporting
associations in buildings and building lots was 51,202,000 crowns
($10,394,006). The total number of houses erected by the associa­
tions was 2,964, of which 928 were one-family, 294 two-family, 46
three-family, and 303 large apartment houses, and 1 was a home for
single persons. In the case of 1,324 houses erected by Czech build­
ing associations, it could be ascertained only that they were small
houses with not more than three apartments, and for 68 other houses
the number of apartments could not be obtained, but 27 of them
did not have more than three. An overwhelming majority of the
associations, therefore, build principally small houses, i. e., one or
two family houses, and this tendency is especially marked in indi­
vidual Provinces.
In the case of associations in Bohemia and Bukowina the number
of apartments in the houses erected could only be estimated; in all
other instances the reports gave detailed information. The total
number of apartments was for all Austria 6,663. As regards the
size of the apartments the table shows that those consisting of one
room and kitchen were most frequent. A gratifying fact is the small
number of apartments without kitchen erected by cooperative build­
ing associations. The table shows only 150 of these highly undesir­
able apartments.
Considering the progress of housing work by Provinces, the tables
show that, leaving Vienna out of consideration, building associations
have developed most rapidly in Bohemia and Moravia. In Bohemia
the Czech associations make a better showing than the German, but
the difference is very little greater than may be explained by the
predominance of the Czech population. The Germans, who in 1900



GOVERNMENT AID TO HOUSING-----AUSTRIA.

89

constituted 35 per cent of the total population, furnish 31.3 per cent
of the total building associations in the Province. The cooperative
form of association is overwhelmingly favored by both races, 94.3
per cent of the German and 98.4 per cent of the Czech associations
being of this kind. The German societies are considerably more in­
clined than the Czech to put up large houses; 50 percent of the Ger­
man, but only 3.7 per cent of the Czech buildings are for more than
three families. This may be due to the fact that the Czech population
lives mostly in rural districts, while the Germans congregate in the
cities. The building associations of Bohemia have put up nearly
one-half of all the houses erected in Austria by public-welfare build­
ing enterprises.
In Moravia, although the Czech associations are far the more
numerous, yet relatively the Germans are in the lead, since although
they constitute but 27.9 per cent of the population they conduct 33.7
per cent of the building associations. The cooperative form of
association is less general among the Germans here than in Bohemia,
only 85.3 per cent of their societies being cooperative. On the other
hand, all of the Czech associations are of this form. The small house
is in even greater favor here than in Bohemia, 79.2 per cent of the
buildings erected by the German associations and 98.3 per cent of
those erected by the Czech associations being designed for from one
to three families.
Lower Austria, including Vienna, has, next to Bohemia and Moravia,
the largest number of dwellings built by public-welfare building asso­
ciations. In Vienna alone 29 cooperative associations have built 250
houses with 1,165 apartments and a home for single persons with 75
bedrooms at a total cost of 9,465,000 crowns ($1,921,395). The build­
ing operations in Vienna of noncooperative associations were also
extensive, these associations having built 50 houses with 1,208 apart­
ments and 4 lodging houses with 1,519 sleeping compartments at a
total cost of 7,116,000 crowns ($1,444,548). Of the 2,373 apartments
erected in Vienna by associations of both classes combined, only
35 had no kitchen, 1,216 consisted of 1 room and kitchen, 457 of
2 rooms and kitchen, and only 285 of 3 or more rooms. The size of
380 apartments could not be definitely ascertained. The above data
show that the houses erected by cooperative associations contained an
average of 4.7 apartments each, and the houses built by noncoop­
erative associations an average of 24 apartments each. In Lower
Austria, exclusive of Vienna, the results were less satisfactory.
Reports were received from only 12 cooperative associations here,
which had erected only 111 houses with 273 apartments. Most of
these houses (76) were one-family houses.
The situation in the remaining Provinces requires little comment.
Public-welfare building associations have as yet accomplished rela­



90

BULLETIN OF THE BUREAU OF LABOR STATISTICS,

tively little, and what they have done has been mainly in the cities
In the country in these Provinces, where housing conditions are often
more deplorable than in the city, the cooperative building movement
has not so far gained any foothold.
The statistics above given show that the beginnings of public-wel­
fare housing work in Austria are quite promising, and if the positive
results have fallen somewhat short of the general expectations the
cause for this was not the feebleness of the housing movement, but
the great difficulties which each individual building association en­
countered in obtaining low-rate loans. There is in Austria even at
the present date a lack of ample sources of credit which would
furnish the required mortgage loans to public-welfare building asso­
ciations.
NEED FOR ADDITIONAL BUILDING CAPITAL,

In obtaining low-rate loans the public-welfare building activity
' depended principally upon the insurance institutes of the social insur­
ance system, the territorial accident insurance institutes, the general
pension institute for salaried employees, and the trade accident insur­
ance institute of railroad employees, the small means of which could
not satisfy all the requests for loans made by building associations.
Other good sources of credit are very scarce and generally of a local
character. A number of communal savings banks in Bohemia,
Moravia, and Silesia have granted low-rate building loans, or, in
individual instances, made small donations to welfare building enter­
prises, as was done by the savings banks of Prague and Laibach. As
a whole, however, the savings banks stand aloof from housing work.
This is especially true of those savings banks the administration of
which is in the hands of landlords. Next to the savings banks as
credit sources are the provincial mortgage banks (.LandesTiypotheTcenanstalteri). These, however, are forbidden by their by-laws to
make second-mortgage loans guaranteed by the State housing fund.
The provincial mortgage banks of Prague and Brunn have already
resolved to change their by-laws in this respect, but such a change
needs the approval of the respective diets, and the diets of Bohemia
and Moravia, in which the German and Czech representatives have
for years been in a deadlock, are unable to give their approval, as
they are never able to form a quorum.
If, therefore, the number of financial institutes granting mortgage
loans was from the beginning very limited, and the raising of large
loans encountered considerable difficulties at the time of the creation
of the State housing fund, this situation became still worse after the
fall of 1912, when the uncertain political situation consequent upon
the Balkan war caused an entirely unexpected financial stringency,




GOVERNMENT AID TO HOUSING-----AUSTRIA.

91

and the general condition of the money market made the raising of
low-rate mortgage loans absolutely impossible. Since then mort­
gage banks could hardly be considered at all as credit sources for
building purposes, for as a consequence of the low quotation of
mortgage bonds on the stock exchange and the lack of public demand
for these securities these banks charged such a high rate of interest
on mortgage loans that public-welfare building enterprises could no
longer afford to borrow from them. Private insurance institutes,
which under ordinary conditions had invested large amounts in
mortgage bonds, were forced to bring these bonds into circulation, so
as to be able to make building loans, and the market, which was
hardly able to absorb new mortgage bonds, was forced to place
large amounts of old bonds which were turned back into it. Neither
could the savings banks comply in the same manner as before with
the task of furnishing funds to the building market, for their deposits
decreased more and more, and, in addition, the Government required
them to invest a relatively large part of their assets in Government
bonds. In this manner it came about that at the beginning of the
year 1913 the public-welfare building activity was solely dependent
on the social insurance institutes and on a small number of savings
banks which had a large amount of quick assets. In the spring of
1913 the building operations of cooperative building associations
came to an absolute standstill and in several instances the State
housing fund was forced to make direct loans, because individual
credit institutes did not keep their promises to public-welfare building
associations.
Prospects of obtaining foreign capital, which were at one time good,
were not realized on account of the troubled political situation, for in
consideration of the latter foreign capitalists demanded a high inter­
est with the added conditions that a refund within 10 years would not
be permitted and that large funds must be placed within a short
period. In view of this situation, there was nothing left for the
housing movement but to wait for better times, and public-welfare
building associations found it advisable not to begin building opera­
tions unless they had binding promises of mortgage loans at a
reasonable rate of interest.




LIST OF REFERENCES CONSULTED.
Annalem fiir S©ziale Politik und Gesetzgebung vol. I. Berlin, 1912.
Das neue
Wohnungsfiirsorge-gesetz, von Prof. Dr. Carl Johannes Fuchs. Das oesterreichische
Erbbaurecht von Prof. Dr. Franz Klein.
Austria. Arbdtsstatistisches amt. Soziale Rundschau. Herausgegeben vom k. k.
Arbeitsstatistischen Amte im Handelsministerium. 1. -14. Jahrg. 1900-1913. Wien
[1900-1913].
Austria. Finanz-ministerium. Statistik der hauszinssteuerpflichtigen Wohnungen
nach dem Stande von 1908. Wien, 1909.
Statistik iiber die Ergebnisse des Arbeiterwohnungsgesetzes ex 1902 in den Jahren
1902 inklusive 1908 [Wien, 1910]. (Beilage 2 zu Heft I der Mitteilungen des
k. k. Finanzministeriums, X V I . Jahrgang 1910.)
Austria. Laws, statutes, etc. Das Gesetz vom 8. Juli 1902, R. G. Bl. No. 144, betreffend Begiinstigungen von Gebauden mit gesunden und billigen arbeiterwohnungen * * * Herausgegeben von der Zentralstelle fiir Wohnungsreform
in Oesterreich. Wien, Manz, 1908.
Gesetze und Verordnungen iiber die Arbeiterversicherung. Wien, 1896. (Taschenausgabe der osterreichischen gesetze. 29. bd.)
Die Wohnungsfursorgegesetze. Herausgegeben von Dr. Franz von Meinzingen
und Dr. Franz Pauer. Wien, Manz, 1912.
Austria. Ministerium des innern. Die Gebarung und die Ergebnisse der Unfalletatistik * * * Arbeiters-Unfallsversicherungsanstalten im Jahre 1910. Vom
Minister des Innern dem Reiehsrate mitgeteilt. Wien, 1913.
Austria. Statistische central-commission. Die gemeinniitzigen Kleinwohnungsanlagen
in den im Reiehsrate vertretenen Konigreichen und Landern nach den Ergebnissen
der Erhebung vom 17. April, 1909. Bearbeitet von der k. k. Statistischen Zentral
Kommission. Brunn, 1910.
Oesterreichisches Statistisches Handbuch, Jahrg. 29-31, 1910-1912. Wien, 19111913.
Statistische Monatsschrift. Neue Folge, X V I . Jahrg. Brunn, 1911.
Congres international des classes moyennes. 2d, Vienna, 1908. Schriften des II.
Intemationalen Mittelstandskongresses. Wien, 1908. 2. bd. Bauhandwerk und
mittelstandische Wohnungspolitik. Wien, 1910.
International congress for sanitary dwellings. 3d, Dresden, 1911. Bericht iiber
den III. Intemationalen Kongress fiir Wohnungshygiene in Dresden vom 2 bis 7
Oktober, 1911. Dresden [1912].
International housing congress. 9th, Vienna, 1910. Bericht iiber den I X . Internationalen Wohnungskongress, Wien, 30. Mai bis 3. Juni, 1910. Herausgegeben vom
Bureau des Kongresses. Wien, 1911.
International housing congress. 10th, The Hague, 1911. X m Congres International
e
des Habitations a Bon Marche. La Haye-Scheveningue, septembre 1913. Rapports.
Rotterdam [1913]. 3 vols.
Kaiser Franz Joseph I. Jubilaums-Stiftung fiir Volkswohnungen und Wohlfahrtseinrichtungen.
Jahresbericht iiber das Jahr 1911. Wien, 1912.
Mannerheim, Wien X X . Bezirk. Wien, 1905.
Mannerheim, Wien X V I I . Bezirk. Wien, 1910.
92




GOVERNMENT AID TO HOUSING---- AUSTRIA.

93

Palla, Edmund. Statistische Grundlagen zur Beurteilung des Wohnungswesens in
Oesterreich. Sonderabdruck aus dem mai-heft der Statistischen monatsschrift,
X V . Jahrgang, fur den I X . Internationalen Wohnungskongress, Wien, 1910.
Herausgegeben von der k. k. Statistischen Zentral-Kommission. Briinn, 1910.
Vienna. Btirgermeister. Die Gemeindeverwaltung der k. k. Reichshaupt- und
Residenzstadt Wien im Jahre 1912. Bericht des B iirgermeisters Dr. Richard
Weiskirchner.
Zentralstelle fiir Wohnungsreform in Oesterreich. Schrift^n.
Nr. 1. Ziele und Wege der Wohnungsreform in Oesterreich von Prof. Dr. Heinrich
Rauchberg. Wien, 1907.
Nr. 3. Die Steuer-und Gebuhrenlast der gemeinnutzigen Yereinigungen zum
Zwecke der Errichtung von Kleinwohnungen. Wien, 1908.
Nr. 4. Die Beschaffung der Geldmittel fiir die gemeinniitzige Bautatigkeit, von
Dr. Felix Freiherrn von Oppenheimer. Wien, 1908.
Nr. 5. Wohnungsfiirsorge durch Bearntenbaugenossenschaften, von Regierungsrat
Max Koska. Wien, 1908.
Nr. 6. Die Kosten einer Wiener Wohnungsreform und ihre Deckung, von Dr.
ing. Walter Conrad. Wien, 1908.
Nr. 9-10. Drei Aufsatze zur Frage der Gebaudesteuerreform. Wien, 1909.
Nr. 13. Die Bedeutung der Bauordnungen und des Bauwesens fiir die Wohnungsfrage, von Oberbaurat Theodor Bach. Wien, 1910.
Nr. 15. Bericht uber die I. osterreichische Wohnungskonferenz Wien, 25 und
26, November, 1911. Wien, 1912.







BELGIUM.
INTRODUCTION.

In the movement for housing through State intervention Belgium
has been one of the pioneers. The act of August 9,1889, has proved to
be a very important and influential piece of legislation, having been
followed in the French housing act of 1894, and some of its principles,
for example, the insurance feature, having found their way into
German legislation. The royal commission on labor of 1886 had
disclosed in its investigations and report certain facts requiring
remedial legislation; and the interest and attention subsequently given
to the housing question, which culminated in the act of 1889, resulted
from the efforts of the commission.
In its report of 1886 the commission stated (vol. 3; p. 80) that
previous to that time efforts had been made to better housing con­
ditions of the workingman, but that such efforts were confined to
building associations in the large cities, and to some work which was
done by the semipublic charitable societies. Certain laws of national
scope had, however, encouraged the early movement. Thus the act
of August 12, 1862, stipulated that the registration fees and the
mortgage transfer duties on the acts, documents of sale, etc., of
cheap dwellings societies might be paid off in 10 annual installments
instead of at the time of the transaction.
The act of June 20, 1867, extended the privilege of limited liability
to these societies and exempted the rents of the houses constructed
by them from the provincial and communal income taxes and from
the stamp dues, while the act of March 28, 1821, had already with­
drawn for a limited time (8 years) certain land taxes on the property
of these building associations. The act of 1871 reducing the time of
exemption from the land tax for certain structures excepted from
the reduction those houses put up for the working classes. On the
strength of this experience the commission made its final recommen­
dations which were embodied in the act of 1889. It suggested
particularly further exemptions from taxes, and pointed out that in
Liege a house worth 4,428 francs ($854.60) paid taxes of various
kinds (5 in all) to an amount of 47.22 francs ($9.11).
Though the act as passed August 9, 1889, was amended in cer­
tain features in 1892, 1893, and 1897 and supplemented by a sep­
arate act in 1900, it still stands substantially as then passed. There
are three distinct parts to the law: (1) Creation of committees of
patronage; (2) loaning of money by the General Savings Bank and



95

96

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

Pension Fund (caisse generate d’epargne et de retraite); (3) institution
of life insurance in connection with the repayment of loans by indi­
vidual borrowers.
One of the recommendations of the commission of 1886 called for
legislation to modify the code in the matter of inheritance of property
so as to assure to the widow of the purchaser of a house its continued
ownership. It is to be recalled that the civil code as adopted in
Latin countries provides for the division of the property among the
heirs pro rata, and it was to prevent such an occurrence and to offer
a solution of the question like that of our homestead laws that this
recommendation was made. It was not, however, until 1900 that
the proposal was carried out. At that date there was introduced into
the Belgian housing legislation a fourth feature, which provided
that property on the death of the purchaser or owner should be kept
intact for the widow or minor children.
LEGISLATION IN FORCE.
ADMINISTRATION OF THE LAW.

The first part of the law of 1889 establishes in each local admin­
istrative district (arrondissement) a body which, for lack of a better
descriptive phrase, may, perhaps, be called a semiofficial committee
on good works. It is composed of not less than 5 nor more than 18
members, appointed for a term of 3 years. From 3 to 10 of the mem­
bers are named by the standing committee of the provincial council
and from 2 to 8 of them by royal decree. The duties of these commit­
tees of patronage (comites de patronage) as set forth in the original
law and further detailed by the administrative decree of July 7, 1891,
are as follows: (1) To encourage the building and letting of sanitary
workmen’s dwellings, and their sale to working people either for cash
or by annual payments; (2) to study the sanitary conditions of work­
men’s dwellings and the hygiene of their location; (3) to encourage
thrift and life insurance, and also to promote the formation of loan
and mutual benefit societies and pension funds.
In brief, therefore, these are committees of propaganda under
Government regulation. Subsidies may be granted to them by pub­
lic bodies to cover their working expenses. They report annually
to the minister of the interior, and a copy of their report is trans­
mitted to the superior council of hygiene (conseil superieur dliygiene) .
Each commune is also entitled to receive official communication of
the particular part of the report which concerns it.
FUNDS FOR BUILDING LOANS.

The second distinct feature of the law is the authorization to the
General Savings Bank, a semiofficial institution whose deposits the
Government guarantees, to loan a part of its reserve at a reduced



GOVERNMENT AID TO HOUSING— BELGIUM.

97

rate to encourage the proprietorship of homes among working peo­
ple. The total amount that the bank could so loan at a reduced rate
was limited to 5 per cent of its total loans, but by the decree of July
25, 1901, this limit was raised to 7\ per cent. This change was made
because the loaning limit was reached April 30, 1901, at 35,635,436.84
francs ($6,877,639.31), and in order to prevent embarrassment to nu­
merous loan companies.
Although the law did not contemplate that the General Savings
Bank should make loans to Provinces, communes, or charitable and
relief institutions, yet the law authorized them to accept gifts and
legacies for the construction of workmen's dwellings. The privilege
of raising loans for purposes of the act w
^as extended to Provinces
and communes by a decree of March 25, 1891.
The loans from the General Savings Bank are made only through
an intermediary; four different kinds of associations are contemplated
by the law as entitled to obtain these loans, namely, joint stock and
cooperative loan companies and joint stock and cooperative build­
ing associations. The General Savings Bank, with the sanction of
the minister of finance, determines the rate of interest on such loans.
These associations, in turn, make loans to individual workmen desir­
ing to purchase their homes.
LIMITATION ON AMOUNTS ADVANCED.

There is no definite or fixed maximum or minimum set as to the
amount of loans the General Savings Bank may make to the borrow­
ing companies. Two general factors determine the limits— (1) the
amount of subscribed capital not paid in and (2) the value of the land
security offered. The total loans of the bank at the reduced rates
allowed, however, may not exceed 7| per cent of its total loans, as
already explained. To a loan company, if a joint stock company,
advances may be made in the first instance equal to one-half of the
capital stock subscribed and not paid in, and, in addition, a sum equal
to one-half of the value of the real estate owned by the company, plus
a further amount equal either to six-tenths of the value of the prop­
erty held by the company on mortgages of borrowers who are not
protected by life insurance, or to seven-tenths of its value if the bor­
rowers' payments are protected by insurance (decree June 21, 1906).
Advances to a building company can be made only to an amount equal
to one-half the value of the real estate belonging to the company.
TAX EXEMPTIONS AND REDUCTIONS.

In addition to the advantages in securing funds, societies whose
sole object is to purchase, sell, or let dwellings for the working classes,
in compliance with the conditions of this act, are entitled to exemp6 6 1 7 1 ° — B u ll. 1 5 8 — 1 5 -------- 7




98

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

tion from certain stamp duties, registration fees, and mortgage trans­
fer fees; and the registration duty upon sales and awards to these
societies, or to public bodies, of real estate intended for purposes of
the act is reduced.
CONDITIONS OF LOANS TO BUILDING ASSOCIATIONS AND LOAN COM­
PANIES.

The rate of interest to borrowing companies is fixed by the General
Savings Bank with the concurrence of the minister of finance. It
differs for the two groups of companies, loan companies and building
associations. To the former the rate was fixed at 2J per cent and to
the latter at 3 per cent until 1899, when the rates generally were
raised to 3 per cent to loan companies and 3J per cent to building
associations, but until 1920 building associations may borrow at
2| per cent on complying with certain conditions.
Repayments of advances are made according to a separate agree­
ment in each case with the association negotiating the advance.
The term of repayment is, as a rule, 10, 15, 20, or 25 years.
The loan companies, in order to receive loans from the bank, were
required to give assurance of their philanthropic purposes by limit­
ing their dividends to 3 per cent per annum. This was, by decree
of June 4, 1908, raised to 3^ per cent if one-half or more of their cap­
ital stock was paid in: and if all was paid in, the bank might permit
them to increase the rate to 4 per cent. The above provisions do
not apply to building associations. The character of all companies
must be inspected and attested by the local patronage committees.
Their by-laws must- contain certain provisions, as follows: (1) An
agreement to accept the surveillance of the General Savings Bank;
(2) to submit to the bank directors for ratification all transfers of
shares not fully paid up (the reason for this requirement is that the
bank’s advances are determined by the amount of shares sub­
scribed but not paid up, and it relies to a certain extent for its
security upon the individual owners of shares); (3) to give to the
bank directors immediate notice of every sum called in; (4) to
transmit to the bank every year a certified statement of their affairs;
(5) to bond all their employees who handle money. To be entitled
to the rate of 2\ per cent, these companies must show that loans
made without insurance on the lives of the borrowers do not exceed
50 per cent of all loans; and it has now become customary for the
bank to insist that the by-laws of an association contain a stipulation
to the effect that any loan to a member may be foreclosed if the
security becomes in any way directly or indirectly impaired by rea­
son of said member contracting a drinking debt.
The General Savings Bank allows interest on the deposits of the
building associations at a rate equal to what it charges upon its ad­



GOVERNMENT AID TO HOUSING---- BELGIUM.

99

vances to the latter, as long as these deposits are equal to or less than
the amount of its advances to the associations (decree July 4, 1907);
on deposits beyond the amount of its advances the bank pays the
current rate of 3 per cent.
LOANS TO INDIVIDUALS.

As stated in the law, advances are made by the loan companies
and the building associations to workmen, as defined and certified
to by the patronage committee of their district. The certificate
which the workman obtains is attached to his deed of sale or to the
mortgage passed between him and the company. It is this certifi­
cate which entitles him to the benefit of a reduction in charges of
certain registration fees, etc., mentioned in the law. Furthermore,
any workmen or retired workers who are not owners of real estate
other than that which they occupy or cultivate as owners or renters
are exempt from the personal tax on the assessable rental value of
their property, from the door and window tax, and from the income
tax, provided their assessments do not exceed a certain amount in
proportion to the number of inhabitants of the locality of their
residence, as follows:
Seventy-two francs [$13.90] in municipalities of less than 3,000 inhabitants.
Ninety-six francs [$18,53] in municipalities of 3,000, but less than 20,000 inhab­
itants.
One hundred and twenty francs [$23.16] in municipalities of 20,000, but less than
40.000 inhabitants.
One hundred and forty-four francs [$27.79] in municipalities of 40,000, but less than
100.000 inhabitants.
One hundred and seventy-one francs [$33] in municipalities of 100,000 inhabitants
and over.

It is not necessary that the builder or purchaser occupy the house
himself. Only a workingman, as defined, however, can benefit by
the tax exemptions noted above. In certain localities— agricultural
districts, for example, and other places where no intermediary com­
panies exist— a workingman, through a solvent neighbor who will
go security for him, may get a loan from the savings bank direct at
3 per cent. The guarantor acts as the intermediary and collects the
installments, draws the mortgage, etc., in the manner of the regular
companies, and deals with the savings bank directly. Loans of this
character have been discontinued and are being gradually paid off.
The amount that can be loaned by the companies to any individ­
ual workingman is fixed by the General Savings Bank at 5,000 francs
($965). The value of the dwelling may not exceed 5,500 francs
($1,061.50), including the ground, the value of which, in turn, may
not exceed 1,500 francs ($289.50).




100

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

The loaning companies are allowed to charge 4 per cent interest on
their loans and to take a first mortgage on the property up to ninetenths of its value. Some companies loan at a rate as low as 3J per
cent. The borrower may complete the payments on his loan in 10,
15, 20, or 25 years, as he chooses, and may either pay an installment
every month or make 24 or 52 payments annually. A most impor­
tant consequence of these loans is that a borrower generally takes
out an endowment life insurance policy to guarantee the payment
of his loan.
LIFE INSURANCE AS GUARANTY OF LOANS.

This feature of the Belgian law is so important that article 8 of the
act of 1889 is quoted in full:
A r t i c l e 8. The General Savings Bank (Oaisse generale d’epargne
et de retraite) is authorized to write endowment life insurance for the
purpose of guaranteeing the reimbursement at the end of a fixed
period, or upon the death of the insured if occurring before that time,
of loans made for the construction or purchase of a dwelling.
The general conditions as well as the premium rates of tins insur­
ance shall be submitted for royal sanction.
The royal decree shall indicate the table of mortality, rate of inter­
est, and the deduction for administrative expenses which serve as a
basis for the fixing of premium rates.
To Belgium belongs the honor of having first tried this provision
in legislation of this kind. Perhaps, therefore; a somewhat fuller
discussion of this feature of the Belgian housing act may be justified.
The scheme is very largely the invention of M. Leon Mahilloii; a
former managing director of the General Savings Bank. On account
of the hostility shown by the intermediary companies; the insur­
ance was not rendered obligatory; but in order to force them to under­
take insurance the board of directors of the General Savings Bank,
on November 10, 1892; issued a decree stipulating that after January
1; 1893; advances at 2h per cen t1 wxmld be made only to those com­
panies whose reports showed that at least one-half their loans were
made to persons taking out life insurance to cover their payments.
The new regulation has had such a marked effect that about 85 per
cent of all loans are now made with the life-insurance feature.
As the bank is authorized to write this insurance; an insurance
bureau having distinct accounts is annexed to the General Savings
Bank; and its annual financial statements are published. Up to 1904
Farr’s life tables were the accepted basis of calculation; but since that
date the results of Belgian experience have been used; the premium
rates being fixed at 3 per cent with 3 per cent added for expenses.
Two-thirds of the sum set aside for expenses is turned over to the
General Savings Bank at the end of each year; and with this the
latter undertakes to bear the whole expense of the business. The



1 Since 1899 all loans have been made at 3 or 3| per cent.

101

GOVERNMENT AID TO HOUSING---- BELGIUM.

remaining one-third is put aside as a reserve fund for the insurance
bureau. Should this reserve become exhausted, the General Savings
Bank must make up the deficiency by advancing sums to be repaid
ultimately from the insurance department. Money is advanced for
the construction or purchase of a house, and a policy of insurance on
the life of the debtor is taken out by the creditor. Appropriate
declarations set forth, among other things, the habits of the person
to be insured and the actual state of his health, and these declara­
tions furnish the basis upon which the insurance department of the
General Savings Bank determines whether or not to accept the appli­
cant. Refusal to insure may be made without filing reasons. The
premium is indivisible and must be paid in advance for each insurance
year at the local agency of the General Savings Bank where the con­
tract is executed.
The premiums as established in 1893 were somewhat reduced in
1904 when a new system was put into effect, and again in 1907 (decree
July 29, 1907). The single premium plan was continued. To facili­
tate the payment of this heavy single premium its amount is added
to the principal debt and paid by the building society but is to be
Equidated by the borrower. The monthly installments of the bor­
rower under this plan, called “ Tariff V II,” cover the interest on the
loan and the annual premium on the policy. The borrower's account
with the building company is closed on the termination of the policy
or by death before its termination. The borrower pays equal annual
installments, and if he dies before the expiration of the policy the
insurance covers the balance due.
The following table shows the face value of an insurance policy
which, in case of death, will guarantee the payment of a 4 per cent
loan of $1,000, repayable in annual installments.
A M O U N T OF I N S U R A N C E N E C E S S A R Y T O G U A R A N T E E IN T H E E V E N T OF D E A T H
T H E R E P A Y M E N T O F T H E B A L A N C E D U E IN A N Y Y E A R OF A L O A N O F $1,000
R E P A Y A B L E B Y E Q U A L A N N U A L IN S T A L L M E N T S .
[To determine the premium 3 per cent is added for interest and 3 per cent for cost of administration. The
capital insured is payable immediately on death; it is increased by an interest payment of 4 per cent
annually. Source: Caisse generale d ’epargne ct de retraite. Compte rendu, 1907; Brussels, 1908, p. 86.]

Year of
loan.

Capital insured in each successive year
for loan repayable i n -

10 years.

1 st...
2 d ...
3 d .. .
4 t h ..
5t h . .
6 t h ..
7 t h ..
8 t h ..
9th . .
10th
11th.
12th.
13 th .

15 years.

20 years.

1 0. 0
$1,0 0 0 $1 0.00 >,0 0 0
0 .0 ,00
916.71
830. 09
740. 00
646. 31
548. 87
447.53
342.14
232.54
118.55




950. 06
898.12
844.10
787.93
729.50
668.74
605.55
539. 83
471.48
400. 40
326. 48
249.59

966.42
931.49
895.17
857. 40
818.11
777.25
734.76
690.57
644. 61
598. 81
547.10
495.41

Year of
loan.

25 years

SI, 000.00
975.99
951.02
925. 04
898. 03
869. 94
840.73
810. 35
778. 75
745. 89
711.71
676.17
639.20

Capital insured in each successive year
for loan repayable i n -

10 years.

14th.
15th .
16th.
17th.
18th.
19 th.
20th.
21st..
2 2 d ..
23 d ..
24 t h .
25 th .

15 years.

20 years.

$169.64
86. 48

$441. 64
385.73
327. 57
267. 09
204.20
13S. 78
70. 75

25 years.

$600. 76
560. 78
519.19
475. 95
430. 98
384. 20
335.56
284.97
232. 36
177.64
120. 73
61.55

102

B U L L E T IN

OF TH E BUREAU OF LABOR STATISTICS.

C O S T OF IN S U R A N C E P A Y A B L E IN A S IN G L E P R E M IU M ON A L O A N R E P A Y A B L E IN
10, 15, 20, A N D 25 Y E A R S , A C C O R D IN G TO A G E OF B O R R O W E R .
[Source: Recueil des lois, arretes et instructions concernant les habitations ouvrieres, annote par
O. Velghe. Brussels, 1911. p. 104.]

Ago at
nearest
birthday.

17..
18..
19..

20..
21..
22 ..
23..
24..
25..
26..
27..
28..
29..
30..
31..
32..
33..
34..
35..
36..

Cost of insurance payable in a single pre­
Cost of insurance payable in a single pre­
m ium on a loan of SI,000 repayable in—
m ium on a loan of $1,000 repayable i n ! Age at
| nearest
I birthday.
15 years. 20 years. 25 years.
10 years. 15 years. 20 years. 25 years.

$29.69
31.58
33.21
34. 24
34. 6.1
35.01
35.45
35.93
36.46
37.04
37. 68
38. 38
39.14
39.98
40. 90
41.91
43. 01
44. 23
45.55
47. 01

m. i6
46. 28
48.11
49.30
49.97
50,64
51.37
52.17'
53.05
54. 02
55. 07
56.23
57.50
58. 89
60.41
02.07
63.90
65.90
<>8.08
70. 47

$58.44
60. 80
62. 89
64.41
65.33
66.34
67.44

68. 66
69.98
71.43
73.02
74. 76
76. 66
78. 74
81.02
83.50

86.22

89.19
92. 43
95.96

$72. 66
75.32
77.73
79.60
80.92
82.36
83.94
85.67
87.56
89.63
91.88
94. 35
97.04
99.98
103.18
106. 68
110. 49
114. 63
119.14
124. 03

! 37.............
39.............
40..............
41..............
42.............
43..............
44.............
! 45..............
46..............
i 47.............
i 48..............
! 49..............
i 50..............
1 51.............
52.............
53.............
: 54.............
55.............

$48. 60
50.34
52.25
54.34
56. 62
59.12
61.86
64.85
68.11
71. 67
75.57
79. 81.
84.44
89.48
94. 98
100. 95

$73.08
75.93
79.04
82. 44
86.15
90.20
94. 61
99.42
104. 65
110.33
116.51
123. 22
130. 49
138. 36

$99.81
104. 01
108.57
113.54
118. 94
124. 80
131.17
138. 06
145.52

$129.35
135.12
141.37
148.13

114. 50
122.15

To give, a concrete illustration of how the above tables are used,
let it be supposed that a borrower 30 years old desires a loan of
$3,000, repayable in 15 years with the added security of the insurance
feature. Referring to the table immediately above, it is seen that
at age 30 the single premium on a policy for a term of 15 years to
insure the payment of a loan of $1,000 is $58.89. Therefore, to in­
sure the payment of a loan of $3,000 there is necessary a single pre­
mium equal to three times $58.89, or $176.67. This added to the
amount of the loan gives $3,176.67, the face value of the debt which
the borrower is required to pay to the association from which he takes
his loan.
Suppose, now, that the above loan was contracted June 15, 1905,
and that the borrower subsequently dies December 31, 1909. Re­
ferring to the first table presented immediately above (p. 101) it is
seen that the face value of a policy in its fifth year, as in the case here
cited, to insure the payment of a loan of $1,000 running for 15 years
is $787.93. Therefore, for a loan of $3,176.67 running for 15 years
it is:

= $2,502.99.

To this amount is to be added

interest at 4 per cent from May 1, 1909, the anniversary from which
the insurance runs, as determined by a royal decree (December 4,
1899, art. 7). The interest, then, from June 1 to December 31, 1909,
or 7 months, amounts to $58.40, making a total of $2,561.39 which
the insurance bureau of the General Savings Bank is obligated to pay
in complete settlement of the borrower’s loan with the building or
loan association with which he dealt.



108

GOVERNMENT AID TO HOUSING-----BELGIUM.

SY STE M OF ANNUAL AND M O N T H L Y R EPAYM EN TS OF LOANS.

To show how the system of gradual amortization in the payment
of loans bears upon a borrower the following tables are presented, as
given in a handbook prepared by the General Savings Bank for those
interested in its housing operations.1 The first table immediately
following shows the amount of the annual and monthly payments
required to pay off a loan with the insurance guaranty attached of
$1,000 at 4 per cent interest per annum according to the age of the
borrower concerned as shown in the first column. The second and
third tables, respectively, show what is required to pay off such loans
at 31 and 3J per cent interest per annum.
E Q U A L A N N U A L A N D M O N T H L Y P A Y M E N T S , IN C L U D IN G IN S U R A N C E P R E M IU M ,
R E Q U I R E D TO R E P A Y A L O A N O F $1,000 A T 4 P E R C E N T I N T E R E S T P E R A N N U M IN
10, 15, 20, A N D 25 Y E A R S B Y A B O R R O W E R O F S P E C IF IE D Y E A R S O F A G E .

Annual and monthly repayments on a loan of $1,000 at 4 per cent interest per
annum payable in equal installments in—
Age at nearest birth­
day.

10 years.

Annual.

21......................................
22......................................
23......................................
24......................................
25.......................................
27.......................................
28.......................................
29.......................................
30........ .............................. !
31....................................... !
32....................................... |
33....................................... 1
34....................................... i
35....................................... !
36....................................... :
37....................................... 1
38....................................... 1
39....................................... i
40....................................... |
41....................................... !
4 2 .....................................
43 .....................................
44......................................
45......................................
4 6 .................. ..................
47.......................................
48......................................
4 9 . . ..................................
50.......................................
51..................................
52...................................
53......................................
54................................ ..
55......................................

$127.71
127.76
127. 82
127. 89
127. 96
128. 03
128.12
128. 21
128.31
128.43
128.55
128.68
128.83
129.00
129.17
199.37
129.59 ;
129.83 i
130.09
130.38
130.69
131.04
131.42
131. 84
132.30
132. 81
133.37
133.98
134.66
135.41
136. 23
137.13
138.13
139. 23
140.45

M onthly.

$10.65
10.65
10. 66
10. 66
10. 67
10. 67
10. 68
10. 69
10. 70
10. 71
10.72
10. 73
10.74
10.76
10. 77
10. 79
io . 80
10.82
10.85
10. 87 ;
10. 90
10. 93
10. 96
10. 99
11.03
11.07
11.12
11.17
11.23
11.29
11.36
11 43
11.52
11. 61
11.71

15 years.

20 years.

Annual. |Monthly.

Annual. J
Monthly.

$94.67
94.74
94.81
94.89
94.98
9 5 .0 8

95.18
95.30
95.43
95.57
95.72
95.89
96.08
96.29
96.51
96. 76
97.03
97. 33
97.66
98.02
98. 42
98. 86
99.34
99. 87
100.45
101. 09
101. 80
102.58
103.44
104.38

$7.89
7.90
7. 91
7.91
7.92
7. 93
7.94
7.95
7.96
7.97
7.98
8.00
8. 01
8.03
8.05
8. 07
8.09
8.12
8.14
8.17
8.21
8.24
8. 28
8.33
8. 38
8. 43
8 40
8 5r
>
8. 62
8. 70

$78.72
78. 81
78. 90
79.01
79.12
79.24
79.38
79.53
79.69
79. 87
80. 07
80.29
80.52
80.79
81.08
81.39
81.74
82.12
82. 54
83.01
83.51
84.07
84.69
85.37
86.11

25 years.

Annual.

$6.57
6.57
6.58
6.59
6. 60
6. 61
6. 62
6.63
6. 65
6. 66
6. 68
6. 70
6.71
6. 74
6. 76
6. 79
6. 82
6.85
6. 88
6.92
6. 96
7. 01
7. 06
7.12
7.18

$69.65
69. 76
69. 88
70.01
70.15
70.31
70. 49
70. 68
70. 89
71.12
71.38
71.66
71.96
72.30
72. 67
73.08
73.52
74.01
74.55
75.14

Monthly.

$5.81
5.82
5. 83
5.84
5.85
5.86
5. 88
5.90
5.91
5.93
5.95
5.98
6.00
6.03
6.06
6.10
6.13
6.17
6.22
6.27

1
Caisse gdn&rale d ’6pargne et de retraite.
pp. 97-103.
1




Manuel des soci^tes d ’habitations oilvrieres.

Brussels, 1908,

104

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

E Q U A L A N N U A L A N D M O N T H L Y P A Y M E N T S , IN C L U D IN G IN S U R A N C E P R E M IU M ,
R E Q U I R E D T O R E P A Y A L O A N O F SI,000 A T 3f P E R C E N T I N T E R E S T P E R A N N U M IN
10, 15, 20, A N D 25 Y E A R S B Y A B O R R O W E R OF S P E C IF IE D Y E A R S OF A G E .
Annual and monthly repayments on a loan of $1,000 at 3| per cent interest per
annum payable in equal installments in—
Age at nearest birth­
day.

10 years.

Annual.

21..

22 . .
23..
24..
25..
26..
27..
28..
29..
30..
31..
32..
33..
34..
35..
30..
37..
38..
39..
40.
41.
42.
43.

44.
45.
46.
47.
48.

49.
50.

5.
1

5 2 ..

53.
54.
15.

$128.
126.
126.
126.
126.
126.
126.
126.
126.
126.
126.
127.
127.
127.
127.
12'
127.
128.
128.
128.
129.
129.
129.
130.
130.
131.
131.
132.
132.
133.
134.
135.
136.
137.
13S.

15 years.

20 years.

25 years.

Monthly,

Annual.

Monthly.

Annual.

Monthly.

Annual.

Monthly.

$10. 52
10.52
10.52
10.53
10.54
10.54
10.55
10.56
10.56
10.57
10.58
10.60
10.61
10.62
10.64
10.65
10. 67
10. 69
10.71
10. 73
10. 76
10. 79
10. 82
10.86
10. 89
10.93
10.98
11.03
11.09
11.15
11.22
11.29
11.37
11.46
11.56

$93.02
93.09
93.16
93.24
93.33
93.42
93.53
93.64
93.77
93.91
94.06
94.22
94.41
94. 61
94. 83
95.08
95.34
95.64
95.96
96.32
96.71
97.14
97.61
98.13
98. 71
99.34
100.03
100.80
101. 64
102.57

$7. 76
7.76
7.77
7.77
7.78
7.79
7.80
7.81
7.82
7.83
7.84
7.86
7.87
7. 89
7.91
7.93
7.95
7. 97
8.00
8.03
8.06

$76.99
77.08
77.17
77.27
77.38
77.50
77.63
77.78
77.94
78.11
78.31
78.52
78. 75
79. 01
79. 29
79.60
79. 94
80. 32
80. 73
81.18
81. 68
82.22
82. 83
83.49
84.22

$6.42
6.43
6.44
6.44
6.45
6.46
6.47
6.49
6.50
6.51
6.53
6.55
6.57
6.59
6.61
6.64
6. 67
6. 70
6. 73
6.77
6.81
6.86
6.91
6.96
7. 02

$67. 82
67. 93
68.04
68.17
68.31
68.47
68.64
68. 83
69.03
69.26
69. 50
69. 78
70.07
70.40
70. 76
71.16
71.59
72.07
72.59
73.17

$5.66
5.67
5.67
5.69
5. 70
5.71
5.72
5.74
5. 76
5.78
5.80
5.82
5.84
5. 87
5.90
5.93
5.97

8.10
8.14
8.18
8.23
8.28
8. 34
8.40
8.47
8.55

6.01
6.05
6.10

E Q U A L A N N U A L A N D M O N T H L Y P A Y M E N T S , IN C L U D IN G IN S U R A N C E P R E M IU M ,
R E Q U IR E D T O R E P A Y A L O A N O F $1,000 A T 3£ P E R C E N T I N T E R E S T P E R A N N U M IN
10, 15, 20, A N D 25 Y E A R S B Y A B O R R O W E R OF S P E C IF IE D Y E A R S O F A G E .
Annual and monthly repayments on a loan of $1,000 at 3J per cent interest per
annum payable in equal installments in—
Age at nearest birth­
day.

10 years.

15 years.

20 years.

Annual.

21......................................
22......................................
23......................................
24......................................
25......................................
26......................................
27......................................
28................................ ..
29.......................................
30......................................
31.......................................
32......................................
33......................................
34..................................
36.......................................
37......................................
38......................................




Monthly.

Annual.

Monthly.

Annual.

$124.55
124.60
124.66
124. 72
124. 79
124. 87
124.95
125. 04
125.14
125. 25
125.37
125. 50
125. 65
125. 81
125. 98
126.17
126. 38
126. 62

$10.38
10. 39
10.39
10.40
10. 40
10.41
10.42
10. 42
10.43
10. 44
10.45
10.46
10.48
10. 49
10. 50
10. 52
10. 54
10. 56

$91.39
91.46
91.53
91.60
91.69
91.78
91.89
92.00
92.12
92. 26
92. 41
92. 57
92. 75
92.95
93.17
93.41
93.67
93.96

$7.62
7.63
7.63
7.64
7.65
7.65
7.66
7.67
7.68
7.69
7. 71
7. 72
7. 73
7.75
7. 77
7.79
7.81
7. 83

$75. 28
75.36
75.45
75.55
75. 66
75. 77
75.90
76.05
76.20
76.37
76.56
76.77
77.00
77. 25
77. 53
77.83
78.16
78. 53

25 years.

Monthly.

$6.28
6.28
6. 29
6.30
6.31
6.32
6.33
6.34
6.35
6.37
6.38
6.40
6.42
6.44
6.47
6.49
6.52
6.55 i

Annual.

Monthly.

$66. 02
66.12
66.23
66.36
66. 50
66.65
66. 81
67.00
67.19
67.41
67.65
67. 92
68. 21
68.53
68. 88
69. 26
69.69
70.15

$5.51
5.51
5. 52
5.53
5.55
5.56
5.57
5.59
5.60
5.62
5.64
5.66
5.69
5.72
5.74
5.78
5.81
5.85

GOVERNMENT AID TO HOUSING— BELGIUM.

105

E Q U A L A N N U A L A N D M O N T H L Y P A Y M E N T S , IN C L U D IN G I N S U R A N C E P R E M IU M ,
R E Q U I R E D TO R E P A Y A L O A N O F $1,000 A T 3£ P E R C E N T I N T E R E S T P E R A N N U M
IN 10, 15, 20, A N D 25 Y E A R S B Y A B O R R O W E R O F S P E C IF IE D Y E A R S O F A G E — Concld.

Annual and m onthly repayments on a loan of $1,000 at 3J per cent interest per
annum payable in equal installments in—
Age at nearest birth­
day.

10 years.

15 years.

20 years.

Annual.

39......................................
40......................................
41.......................................
4 2 ......................................
43......................................
44......................................
45......................................
46......................................
47.......................................
48......................................
49......................................
50......................................
51......................................
52
. . . .
53
54......................................
55......................................

..........

Monthly.

Annual.

Monthly.

$126.87
127.15
127.46
127. 80
128.17
128. 58
129. 03
129. 52
130. 07
130. 67
131.33
132. 06
132. 86
133.74
134.72
135. 79
136.97

$10. 58
10. 60
10. 63
10. 65
10. 69
10. 72
10. 76
10. 80
10.84
10.89
10. 95
11.01
11.08
11.15
11.23
11.32
11.42

$94.28
94. 63
95.01
95.43
95. 90
96.41
96. 97
97.59
98.28
99.03
99. 86
100.77

$7.86
7. 89
7. 92
7.96
8.00
8.04
8. 09
8.14
8.19
8.26
8.33
8 40
*.

25 years.

Annual. Monthly.

$78.93
79.37
79. 86
80.39
80. 98
81.63
82.34

$6.58
6.62
6.66
6.70
6. 75
6. 81
6.87

Anuual.

Monthly.

$70.66
71.22

$5.89
5.94

'
i
!
i

To show the annual and monthly repayments on a loan of $1,000
at rates of 4, 3f, and 3-J per cent per annum, respectively, but
without the additional payments necessary to carry the insurance
guaranty, the table which follows is presented:
E Q U A L A N N U A L A N D M O N T H L Y P A Y M E N T S R E Q U I R E D TO R E P A Y A L O A N OF
$1,000 IN 10,15, 20, A N D 25 Y E A R S A T 4, 3|, A N D 3i P E R C E N T I N T E R E S T P E R A N N U M .

A n n u a l and m o n th ly repaym ents on a loan of $1,000 p ayab le in equal install­
ments in—

Rate of interest.

10 years.

Annual.

4 per cent.......................
3 t per cent.....................
per c e n t...................

3h

$123.29
121.76
120.24

Monthly.

$10. 27
10.15
10.02

15 years.

Annual.

$89. 94
88. 38
86. a3

25 years.

20 years.

Monthly.

$7.50
7.36
7.24

Annual.

$73. 58
71. 96
70.36

Monthly.

$6.13
6.00
5. 86

Annual.

Monthly.

$64.01
62. 33
60. 67

$5. 33
5.19
5.06

A hasty survey of these tables shows that the taking out of insur­
ance to guarantee the payment of loans made adds very little to
the burden upon the borrower. Thus, the maximum that any
borrower pays annually on a $1,000 loan for 10 years at 4 per cent
is $140.45 (see table, p. 103), while the flat rate without insurance
is $123.29, or a difference of $17.16. This is the maximum possible
difference that can arise, as is shown by a glance at the maximum
possible annual payments with the insurance guaranty and the amount
of the payments at a flat rate without the insurance guaranty.




106

B U L L E T IN OF TH E BUREAU OF LABOR STATISTICS.

PRACTICAL EFFECTS OF LEGISLATION.
OPERATIONS OF THE GENERAL SAYINGS B A N K .1

From the time the law of 1889 came into effect up to December
31, 1912, the General Savings Bank had advanced for the construc­
tion or purchase of workmen’s dwellings 103,267,317 francs
($19,930,592.18), which amount had made possible the construction of
about 57,500 houses. On the same date there were loans outstanding
to an amount of 92,291,958.96 francs ($17,812,348.08). This amount
consisted principally of loans to building associations as indicated in
the table which follows. This table, covering the years 1895 to 1912,
gives a concise statement of the loaning operations of the bank,
showing the amounts outstanding at different rates of interest.
Since 1899 there have been no loans placed at 2^ per cent interest.
Likewise, loans are no longer made on the mere security of a third
party individually, and such loans of that kind as are still outstand­
ing are being gradually paid off by the borrowers. Only an insig­
nificant sum of $75.55 is at present outstanding.
A M O U N T OF C L A S S IF IE D L O A N S O U T S T A N D IN G M A D E F O R H O U S IN G P U R P O S E S
U N D E R T H E ACT OF 1889 B Y T H E G E N E R A L S A V IN G S B A N K OF B E L G IU M , 1895
TO 1912.

Y e a r.

1895.
1890.
1897
1898
1899
1900
1901
1902
1903
1904
1905
1906
1907,
1908
1909
1910
1911
1912

Advances to building and loan associa­
Loans on
tions at—
security
____________ ' of third
I person at
3 1 per cent.: 3 per cent.
3 per cent.
2 2 per cent.

987.474. 20
668.962.10
483,192. 95
538'. 402. 72
426. 276.92
426. 276. 92
426. 276. 92
426'. 276.92
414. 214. 42
413.365. 22
363,494. 73
346! 244. 39
324.126. 59
947. 476. 52
876. 923. 70
766. 304. 55
758., 005. 55
710,396. 68

$233 '42. 30
265, 041. 98
318, 339. 51
310, 802. 86
503, 455. 46
1.650. 319. 36
2,985, 039. 81
4.241, 194. 78
5,178, 823. 52
6.295. 260.97
6,321, 059.46
6.934, 844. 71
7,704, 836. 21
8.296, 412.20
9,227, 168.17
10.019, 399. 58
11 . 020 , 953. 78
11,698, 080.13

$28.239.
24,479.
23, 632.
21,443.
512.352.00 I 19,986.
107.857.00 i 18,430.
182.964.00
17, 699.
219.592. 72
16,050.
257; 266.32
14,445,
290,134.22
6,313.
323,559. 90
6,240.
3,13"
411.153.07
435', 088.24
1,835.
452,458. 24
1,279.
972.
501,549. 98
750,939.09
384.
765,316. 64
259.
794,305. 24
75.

Other

Advances
to munici­
palities.

mortgage
loans.

$87,450.25
105,818. 74
124,062.19
157,535.52
325,311.89
323,001.81
339,938.97
356, 729. 97

$25,787.26
28,665.95
25,148. 57
24,403. 55
33,285.03
26,852. 72
47,199. 66
65,609. 90
94,184.49
106,529.29
17,643. 69
17,042.20
14, 779. 46
33,533.69
32,970.55
236,703. 68
234,951. 76
252,760. 51

Total
outstanding

$2,275, 243. 40
2.
149. 82
3,850, 313. 85
4,895, 052.65
5,995, 355.69
7 229 766. 45
8 , 659^180.05
9,968, 725. 30
10,958, 934.04
12 , 111 , 003. 33
12.119, 448.13
12,818, 241.07
13,604, 727. 78
13,888, 696.11
14,964, 896. 54
16,096, 733.01
17.119, 426. 67
17,812, 348.08

The largest proportion of the loans outstanding has been placed
at 3 per cent interest. Thus, in 1912, out of a total of $17,812,348.08
outstanding, $11,698,155.68, or 65.7 per cent, were placed at that rate.
From 1891, when the authorization was made, up to 1904, inclusive,
no advantage was taken by the municipalities of the privilege of
securing loans from the General Savings Bank for housing purposes.
From 1905 to 1912, however, there has been a steady increase in the
amount advanced to municipalities.




1 Caisse general© d'epargne et do retraile.

Compte rendu, 1895-1912.

G O V ERN M EN T AID TO H O U SIN G ---- B E L G IU M .

107

The brief table which follows shows the amounts actually loaned
and outstanding, together with repayments thereon, of the housing
loans made by the bank as of the years for which such information is
available, 1906 to 1912:
S U M M A R Y OF
F IE D Y E A R ,
LOANS M ADE
TH E ACT OF

A M O U N T S L O A N E D F R O M 1906, U P TO T H E C LO SE O F E A C H SP E C I­
T O G E T H E R W I T H A M O U N T S O U T S T A N D IN G A N D R E P A Y M E N T S ON
F O R H O U S IN G P U R P O S E S B Y T H E G E N E R A L S A V IN G S B A N K U N D E R
1889.

Year.

1906......................................................................
1907.......................................................................
1908.......................................................................
1909.......................................................................
1910.......................................................................
1911.......................................................................
1912.......................................................................

Am ount loaned.

$13,997,397
14,873,768
15,561,509
16,720,745
18,115,794
19,173,029
19,930,592

Am ount out­
standing.

112,818,241
13,604,728
13,888,696
14,964,897
16,096,733
17,119,427
17,812,348

Repayments.

$1,179,156
1,269,040
1,672,813
1,755,848
2,019,061
2,053,602
2,118,244

Per cent
of amount
loaned
repaid.

8.4
8.5
10.7
10.5
11.1
10.7
10.0

OPERATIONS OF BUILDING AND LOAN ASSOCIATIONS.1

On January 1, 1912,2 the total number of societies in Belgium
engaged in the construction of low-cost dwellings for workmen, or in
furthering such work, was 213, of which 205 had been organized under
the act of 1889, while 8 were in existence prior to that act. Grouped
according to their purposes, 150 were loan companies exclusively
and 63 were building associations. With reference to the form of
their organization, 195 were joint stock companies and 18 cooperative
societies.
On January 1, 1913,3 the total number of companies having loan
contracts with the General Savings Bank was 176, of which 167 were
joint stock companies and 9 cooperative societies. Considering the
167 joint stock companies alone, there were outstanding loans to an
amount of $16,438,797.10 to 131 loan companies of that type, while
on the same date loans to an amount of $763,984.94 had been made
to 30 joint stock building associations.
As the bulk of the loans made by the bank is made to these
building associations and the loan companies, the table which follows
is presented to show the course of the business done, the amount of
the loans outstanding to each of the two groups of companies at the
close of certain years, together with a statement of the net value
of the assets and their ratio to the loans:
1 Compte rendue des operations et de la situation de la caisse generale d'epargne et de retraito.
Annees, 1S95, 1900, 1905, 1910-1912. Brussels, 1896-1913.
2 Annuaire statistique d e la Belgique et du Congo beige. 43e annee, 1912. Brussels, 1913, p. 218.
3 Compte rendu des operations et de la situation de la caisse generate d ’epargne et de reiraite. Ann6e,
1912.

Brussels, 1913, p. 31.




108

B U L L E T IN

OF TH E BUREAU OF LABOR STATISTICS.

S T A T E M E N T OF L O A N S O U T S T A N D IN G A T E N D O F E A C H S P E C IF IE D Y E A R , N E T V A L U E
O F A S S E T S TO C O V E R T H E S E A D V A N C E S , A N D P E R C E N T L O A N S F O R M O F A S S E T S ,
O F L O A N C O M P A N IE S A N D B U IL D IN G A S S O C IA T IO N S O P E R A T IN G U N D E R T H E B E L ­
G IA N H O U IN G AC T O F 3889.

Loan companies.

Year.

Loans
outstanding
from
General
Savings
Bank.

1895.. SI, 988,333.05
.1900.. 6,865,082.27
1905. . 11,525,304.58
1910.. 14,792,706. 48
1911. . 15,797,348. 70
1912.. 16,438,797.10

Building associations.

Total.

Loans
Loans
N et value
Net value
Per
Per
outstanding
outstanding
cent
of assets
cent
of assets
from
from
to cover
loans
to cover
loans
General
G eneral
loans to form of
loans to form of
Savings
Savings
nearest $1. assets.
nearest $1. assets.
Bank.
Bank.

$2,924,458
10,360,644
18,770,311
26,070,144
27,826,992
29,480,677

67.99
66.26
61. 40
56. 74
56. 77
55.76

N et value
Per
of assets
cent
to cover
loans
loans to form of
nearest $1. assets.

$232,883.45
C)
1
319,401.01
$7,184,483.38
0)
482,809.51
12,008,114.09
0)
743,936.76 $2,045,515 36.37 15,536,643.24 $28*ii5,"659’ " 55.26
746,927.29 2.028,929 36.81 16,544,275.99 29,855,921 55.41
763,984. 94 2,063,927 37.02 17,202,7S2.04 31,544,604 54.53
1 Not reported.

A glance at the ratio of the loans of the loan companies to the
assets securing these loans seems to show a tendency toward greater
conservatism on the part of these associations in placing their loans
inasmuch as the per cent the loans form of the security has decreased
from about 68 per cent to 56 per cent.
The General Savings Bank compiles from reports of the various
companies interesting information on the subject of the total number
of operations conducted by them since their foundation, the number
of foreclosures, and the number of borrowers in arrears on their
monthly payments. This information is summarized in the two
tables which follow :
T O T A L N U M B E R OF H O U S E S C O N S T R U C T E D OR A C Q U IR E D , A N D N U M B E R A N D P E R
C E N T O F F O R E C L O S U R E S A T C LO SE OF E A C H S P E C IF IE D Y E A R F R O M T H E T IM E
T H E L A W W E N T IN T O F O R C E , 1889.

Y ear.

1895..........................
1900........................ .
1905..........................

Total
number
Per cent
of houses Number
con­
of fore­
of fore­
closures
closures
structed
or ac­
since 1S89. since 1889.
quired
since 18S9.

4,430
16,982
33,046

11
64
191

0.25
.37
. 58

Y ear.

1910........................
1911..............................
1912..........................

Total
number
of houses Number Per cent
con­
of fore­
of fore­
structed closures
closures
or aesince 1889. since 1889.
. quired
since 1889.

49.861
53,529
57,130

406
476
526

0.81
.89
.92

TThis apparently shows the results of very conservative manage­
ment 011 the part of the bank. In no case does the proportion of
foreclosures to properties on which mortgages are held equal or
exceed 1 per cent of the number of such properties. Figures elsewhere
presented for Norway show foreclosures as equal to about 1 per cent
of the number of properties mortgaged by the State Laborers' Land
and Building Loan Bank of that country.



109

G O VERN M EN T AID TO HOUSING-— B E L G IU M .

T O T A L N U M B E R O F B O R R O W E R S , A N D N U M B E R A N D P E R C E N T IN A R R E A R S A T
C LO SE O F E A C H S P E C IF IE D Y E A R .

Year.

Number
of bor­
Total
rowers in
number
arrears on
of bor­
monthly
rowers.
pay­
ments.1

1895..............................
1900
.
. ...
1905
........................

4,360
16,294
26,048

144
834
1,986

Per cent
borrowers
in arrears
are of total
borrowers.

3.3
5.1
7.6

Year.

1910..............................
1911..............................
1912..............................

Number
of bor­
Total
rowers in
number
arrears on
of bor­
monthly
rowers.
pay­
m ents.1

34,847
36,711
38,289

Per cent
borrowers
in arrears
are of total
borrow­
ers.

2,206
2,229
2,255

6.34
6.07
5.89

1 These numbers are somewhat misleading, perhaps, because of the practice of the associations in per­
mitting delay in making monthly payments o f borrowers until the end of the year. The matter is, then,
very frequently adjusted during the first months of the following year. The proportions as presented,
however, together with the facts presented as to the proportion of foreclosures do not indicate any marked
tendency of the borrowers to fail to carry through their loans or to default on the interest payments.

The report of the General Savings Bank for the year 1912 (page 33)
states that inspectors are agreed that the rules of the bank as laid
down for its dealings with the housing companies are being observed.
Furthermore, visits to the houses constructed by virtue of its loans
show that as a rule the houses are in good condition, have been well
constructed and conveniently arranged, and that sanitary rules are
observed; the value of these houses usually appears greater than is
required in the grant of the loan.
The report states, however, that the companies have been a trifle
remiss in reporting all transfers of shares and in keeping careful record
of any changes in the holders of these shares. As already explained,
it is important that the General Savings Bank be informed of any
changes in holders of shares not entirely paid up, because the value
of such shares is one of the elements which determine the amount to
be loaned by the bank to any company.
Highly desirable as it might be to secure information as to the
occupations of the purchasers of houses, and to disclose also the rela­
tive number of purchasers and of renters of houses constructed under
the law, it has not been possible to do so. It is generally reported,
however, that the better class of workingmen are those who most
largely take advantage of the opportunities offered by the law.
LIFE INSURANCE AS A GUARANTY OF REPAYMENT OF LOANS.

It will be recalled that the act of 1889 encouraged the borrowing
companies to have their borrowers take out endowment insurance
policies to assure the payment of their loans in the event of their
death before the expiration of the period of repayment. Insurance
under the act is not compulsory, but the regulations of the General
Savings Banks have tended to encourage it by making it a sine qua non
for the obtaining of advances at the reduced rates that the advances
so obtained shall be loaned out again only to borrowers taking out an




110

B U L L E T IN OF TH E BUREAU OF LABOR STATISTICS.

endowment policy with the insurance department of the bank or
with some private company.
The following table shows the number and proportion of borrowers
of housing funds holding life insurance policies in the years indicated:
N U M B E R A N D P E R C E N T OF B O R R O W E R S U N D E R T H E B E L G I A N H O U S IN G
OF 1889 H A V IN G E N D O W M E N T IN S U R A N C E P O L IC IE S , 1891 TO 1912.
[Source: Belgium.

Year.

1891
1895
1900

....................
....................

Caisse generale d’ epargne et de retraite.

Total
number
of bor­
rowers.

52
4,360
16,294

Compte rendu, 1912.

Borrowers who are
insured.
Year.
Number.

11
3,443
12,955

Per cent
of total
borrowers.

21.2
79.0
79.5

1905............ ..................
1910........................ ..
1912..............................

Total
number
of bor­
rowers.

26,048
34,847
38,289

ACT

Brussels, 1913, p. 31.]

Borrowers who are
insured.

Number.

Per cent
of total
borrowers.

21,894
29,544
32,765

84.0
84.8
85.6

The marked increase in the number of insured borrowers is very
noteworthy and attests the efficacy of the encouragement of the
General Savings Bank in maintaining the system.
STATE AID THROUGH TAX EXEMPTION.

The act of 1889, and the amending acts of 1892 and 1893, granted
certain exemptions from taxes on workmen’s dwellings. Thus (1)
registration fees on sales of land for workmen’s dwellings were reduced
from 5.50 per cent to 2.70 per cent on condition that the ground site
does not exceed 25 ares (0.618 acre); (2) the mortgage transfer fees
were reduced from 1.25 per cent to 0.65 per cent; (3) registration of
loans was taxed at a rate of 0.65 per cent in place of 1.40 per cent
(to be reduced to 0.30 per cent if the contract is made for a year
or more); (4) receipts for refunding payments w^ere to be taxed 0.30
per cent instead of 0.65 per cent; and (5) exemptions from land, win­
dow, and door taxes were allowed on property of renters.
It may also be remarked that notary fees were reduced by one-half
on transactions under the housing act, and the documents of the loan­
ing and construction companies were exempted from certain taxes.
Up to 1908 the total exemption from registration and transfer fees
amounted to 6,253,657.95 francs ($1,206,955.98), the latest figures
available.
The table which follows shows for specified years the number of
houses of workmen and the amount of personal taxes from which the
owners thereof were exempted under the amending act of July 18,
1893. Exemption is based on the rental value of the property con­
cerned, provided that the total tax assessment of any property does
not exceed a certain amount in proportion to the number of inhab­
itants of the locality. (See p. 99.)



G O VERN M EN T AID TO H O U SIN G ---- BE L G IU M .

I ll

N U M B E R O F W O R K M E N S H O U S E S A N D T H E A M O U N T OF T A X E X E M P T I O N O N T H E S E
G R A N T E D B Y T H E S T A T E , 1895 TO 1912.
[Source:

International housing congress, 9th, Vienna, 1910.
Wohnungskongress, W ien, 30. Mai bis 3. Juni, 1910.

Year.

Bericht iiber de I X . Intemationalen
W ien, 1911. Vol. I , p. 269.]

Number of
houses.

Am ount of tax
exemption.

93,

1895.
1896-.
1897..
1898..
1899..
1900..
1901..
1902..
1903..
1904..
1905..
1906..
1907..
1908..
1909..
1910 1
1911 1
1912 1

1189,130.61
198,372.60
217,042.81
232,967.13
252,164.36
272,801.20
289,876.15
297,368.50
321,351.39
335,828. 46
357,695.00
379,545.93
402,376.24
427,277.80
449,172. 82
471,046.22
495,405.72
506,397.07

100,

108,
116
125,
134,
14 3 :

146,
157
164,
174,
184,
195,
206,
216,
22"

238,
245,

Total..............................................
Average per year for 18-year period..

2,978,198
165,455.4

6,095,820.01
338,656.67

Average
exemption
per house.

$ 2 . 02
1.98
2.01

2.00
2.01
2.02
2.03
2. 03
2.04
2.04
2.05
2.06
2.06
2.07
2.07
2.07
2.08
2.07
2.047

1 Figures for 1910, 1911, and 1912 have been supplied in a letter to this bureau b y M. Deroover, a former
director of the General Savings Bank.

The total benefits that have accrued to workmen by reason of the
above exemption from 1895 to 1912 amounted to $6,095,820.01,
which is an average of $338,656.67 per year for the 18-year period.
The total average number of houses per year which have benefited
by these exemptions is 165,455.4, making an average exemption of
$2,047 for each house per year for the 18-year period 1895-1912.
HOUSING ACTIVITIES OF PROVINCES.

The act of 1893, supplementing the law of 1889, required the Prov­
inces and municipalities to exempt workmen’s dwellings from the
provincial and communal share of the land, the window, and the
door taxes. It is not possible to obtain statistics to show the amount
of this exemption, but it has been estimated at about two and one-half
million francs ($482,500).1
The aid of the Provinces is accorded also through subsidies to the
local patronage committees and some Provinces extend facilities for
securing insurance at specially low premiums to encourage the in­
surance feature of the law in connection with making loans. Thus,
in 1910 the budget of the Province of Antwerp showed an appro­
priation for housing purposes of 4,500 francs ($868.50) for the year,
that of Liege an appropriation of 20,000 francs ($3,860), and seven
other Provinces appropriated more or less for the same purpose.
intern ation al housing congress, 9th, Vienna, 1910.
kongress, W ien, 30. Mai bis 3. Juni, 1910. W ien, 1911.




Bericht iiber de I X . Intemationalen W ohnungs­
Vol. I , p. 271.

112

B U L L E T IN OF T H E BUREAU OF LABOR STATISTICS.

HOUSING ACTIVITIES OF MUNICIPALITIES AND CHARITABLE INSTI­
TUTIONS.

The act of 1889 permitted municipalities and charitable institutions
to receive gifts and legacies for the promotion of work for the good
housing of workmen. Furthermore, the regulations of the General
Savings Bank, March 25, 1891, and a circular of the minister of the
interior prescribed the formalities to be complied with in securing
advances for this purpose from the General Savings Bank. Advan­
tage, however, was not taken of this sanction until 1905, when the
first loans were requested. Up to December 31, 1912, there was
outstanding with municipalities and charitable institutions a sum of
$356,729.97, or 2 per cent of a total of $17,812,348.08 outstanding
for all housing purposes from the General Savings Bank.
A M O U N T OF C A P IT A L S U B S C R IB E D A N D A M O U N T A C T U A L L Y I N V E S T E D IN H O U S IN G
C O M P A N IE S B Y P U B L IC B O D IE S (M U N IC IP A L IT IE S A N D C H A R IT A B L E IN S T IT U T IO N S )
ON J A N U A R Y 1, 1910.
[Source:

International housing congress, 9th, Vienna, 1910. Bericht iiber de I X . Internationalen
Wohnungskongress, W ien, 30. Mai bis 3. Juni, 1910. W ien , 1911. V ol. I, p. 278.]

Public bodies.

Capital
subscribed.

Municipalities ..........................................................................................................
Associated charities.................................................................................................
A sylu m s.......................................................................................................................

$566,455. 00
218,099. 65
655,514.85

Capital
invested.

$445,254. 09
188,040. 87
600,244. 48

Up to December 31, 1911, the city of Liege, of about 168,000 popu­
lation, had placed 122 loans, amounting to 774,160 francs ($149,412.88)/
intended for the construction or purchase of cheap dwellings for
laborers.
PROPOSED REFORMS.
BILL OF JANUARY 30, 1901.

Notwithstanding the general satisfaction with the act of 1889,
changes have been suggested from time to time to improve the
possible effectiveness of the law. January 30, 1901, a member of the
lower house of the legislative body introduced a bill creating a
national workmen’s housing association under State guaranty, in
order to coordinate and centralize the local efforts of the patronage
committees. The bill provided for the creation of municipal and
intermunicipal companies of public welfare whose purpose was to
be the construction, management, and sale of low-priced dwellings.
The public bodies participating in this organization were to be the
municipalities, charitable institutions, the existing local patronage
committees on housing for workmen, friendly societies, and work­
men’s insurance societies. These committees were to be invested
1 Conseil superieur d ’hygiene publique. Rapport * * * sur les travailx des comites de patronage
des habitations ouvrieres pendant Pannee 1911. Brussels, 1912. p. 29.




G O V ERN M EN T AID TO H O U SIN G ---- B E L G IU M .

113

with tlie legal powers of stock companies and cooperative societies
under the act of May 12, 1873, and were to be compelled to subscribe
to the capital of the national association; and in addition to the
funds so subscribed the national association was empowered to issue
its own obligations, guaranteed to holders by the State. This national
or central credit bank was to supply the necessary funds for the
local associations.
In the chamber the “ reporter” for the bill suggested that the
national association created should be merely a federation of the
existing housing associations.
This proposed reform was again revived in 1905 before the National
Housing Conference at Liege.
The purpose of the proposed reform is obvious, namely, to draw to
one center the available funds instead of leaving them with local
associations, as under the present act in force.
BILL OF NOVEMBER 12, 1912.

This bill was introduced by the Government minister of finance
after an investigation by a commission appointed July 6, 1912, upon
whose report the bill is based.
Although it incorporates some of the features of the bill of 1901,
yet it retains the essential features of the law of 1889; the General
Savings Bank still remains the center of the system; local and regional
patronage committees are continued; and the intermediary companies
are to continue to reloan the funds of the General Savings Bank.
To increase the available funds, however, the State treasury may
make direct advances to the General Savings Bank. And the State
and the Provinces, further, may subscribe to a part of the capital of
the national housing association, which will also make loans to local
and regional housing associations. In addition^ federations of vari­
ous noncommercial housing, building, and loan associations may be
formed and the State and Provinces may then subscribe to the
capital of these federations. The State may also subscribe to the
shares of the local and regional societies, and, in certain instances,
may supply actual subsidies. In all, the State puts at the disposition
of the national housing association 100,000,000 francs ($19,300,000)
to be used in advances to the federated societies. The interest on
these proposed advances is to be fixed annually in the budget.
The new national housing association is to be constituted as a joint
stock company with limited liability, though retaining its peculiar
civil capacity under Belgian law. Its capital is not fixed. In its
organization the State, the Provinces, the municipalities, and the
associated credit societies participate, while charitable institutions
take part only in the formation of the local and regional societies.
6G1710— Bull. 158— 15-------8




114

B U L L E T IN

OF TH E BUREAU OF LABOR STATISTICS.

These latter differ in form from the national association in that they
may organize as stock companies or as cooperative societies. From
all this it appears that there is created a loaning organization parallel
in scope and purpose to the General Savings Bank in its relation to
the housing question.
The scope of the law of 1889 is enlarged as to the classes of persons
to whom loans may be made. Loans are to be made to workers in
general or to all persons whose annual earnings do not exceed a
maximum as fixed by decree. The application of the law is extended
so as to permit the purchase of a larger plot of ground in connection
with the purchase of a house: also garden plots, and collective or
tenement dwelling properties may be purchased through loans.
New provisions are intended to favor large families. The bill makes
obligatory more stringent sanitary requirements and closer inspec­
tion than under the existing law, and makes possible the expropria­
tion of insanitary areas on the request and initiative of the national
housing association, whereas the former acts of 1858 and 1867 left
it to the power of the municipalities exclusively.
Other privileges extended by this bill consist in the continuation of
the reduction in the various stamp dues, land taxes, mortgage fees,
and the like, favoring low-cost dwellings as under the act of 1889.
REFORMS PROPOSED BY LOCAL PATRONAGE COMMITTEES.

Some of the more important reforms proposed by these commit­
tees are that building associations he exempted from all or a part of
municipal improvement taxes, paving, sewers, and the like; that
ground lots be supplied to workmen at a reduced price, and that
there be created in each locality an architect’s office in order to
further standardize the construction of workmen's houses, and to
give advice as to plans and methods of building. These local com­
mittees also would have the Government grant a subsidy to assist in
the formation of a national housing conference. They further insist
that the public health regulations be more stringently enforced, and,
particularly, that measures be taken to combat alcoholism.
While they recognize the work that has already been done to
eliminate insanitary areas in the cities, they nevertheless favor a
wider extension of the powers of expropriation of such insanitary
areas so as to permit their being built up by modern houses.
The three most important reforms that the committees advocate,
perhaps, are that the lav7 of 1889 be so amended as to maintain more
certainly the indivisibility of the estate for the surviving spouse, and
that the law be extended so as to permit commercial employees
earning less than 2,000 francs ($386) per year to secure housing loans.
As at present drawn the law permits only workers engaged strictly




GOVERNMENT AID TO HOUSING---- BELGIUM.

115

in industry to take advantage of the loaning privileges for buying
their own homes. And, finally, it is desired that the law be so
changed as to make it possible for the poorer among the laboring
people to secure loans for the purchase of their own homes. For
it seems to be the prevailing opinion of those who have observed the
operation of the law that the better class of workmen are the ones
who take advantage of it; while the lower-paid workmen, whom it
is most desired to reach, take but little advantage of it,
CONCLUSION.

The Superior Council of Hygiene in its report for 1911, which
collects and summarizes the reports of the local supervising com­
mittees on housing, is of the opinion that great progress has been
made in Belgium within the last 25 years in providing low-cost
dwellings for workmen. This has been a steady and continuous
progress. The propaganda work of the local committees has had an
educative influence in furthering the movement. Particularly is
this true as regards the sanitary work that these committees have
been engaged in. Their housing investigations show that the old
in^fnitary houses are fast disappearing. Structural improvements
fn* taking place in the houses that are now being built. There is
a i 'ndency to standardize the house. It now usually contains a sep­
arate kitchen, a basement, and a bath, in addition to the usual living
rooms. The upper story is being made a useful part of the house,
sufficiently high to be satisfactory both as to lighting and ventilation.
LIST OF REFERENCES CONSULTED.
Belgium. Caisse generale d ’ epargne et de retraite. Compte rendu, 3890-1912;
Brussels, 1891-1913.
Belgium. Caisse generale d ’ epargne et de retraite. Manuel des societes d'habita­
tions ouvrieres. Brussels, 1908.
Belgium. Commission du travail, 1886. Rapports. Brussels, 1887-88. 4 vols.
Belgium. Conseil superieur d ’hygiene publique. Rapport * * * sur les travaux
des comites de patronage des habitations ouvrieres. 1907-1911. Brussels, 1908-12.
Belgium. Ministere de Pinterieur. Annuaire statistique de la Belgique et du Congo
beige. 43e annee, 1912. Brussels, 1913.
Belgium. Office du travail. Revue du travail. Brussels, 1896-1913,
Bulletin des societes d ’habitations ouvrieres, publie sous les auspices du Bureau
permanent des conferences nationales des societes d ’habitations ouvrieres. Amices
1901-1903. Brussels, 1903.
International housing congress, 9th, Vienna, 1910. Berichtiiber de IX . Internation­
al en Wohnungskongress, Wien 30. Mai Vis 3. Juni, 1910. Herausgegeben vom Bu­
reau des Kongresses. Wien, 1911.
Recueil des lois, arretes et instructions concernant les habitations ouvrieres, aimote
par O. Yelghe. Brussels, 1911.
Rowntree, B. Seebohm. Land and labor: lessons from Belgium. London, Mac­
millan, 1910.
United States Commissioner of Labor. Eighth special report. The housing of the
working people. Washington, 1895.







DENMARK.
INTRODUCTION.

The problem of housing for the laboring man in the city in Den­
mark is confined mainly to Copenhagen. The first effort of the
central Government, therefore, consisted in making available for
borrowing funds to aid in the demolition of congested areas and
the erection of sanitary houses for the crowded laboring population.
The primary aim of Danish legislation in this matter was not directed
toward encouraging home ownership, a purpose which has been
foremost in its legislation in behalf of agricultural workers.
The first law dealing with the problem was the act of March 29,
1887. This act set aside from the State treasury 3,000,000 crowns
($804,000) as available to lend to the city of Copenhagen and other
cities for the rebuilding of congested and insanitary areas and for the
construction of workmen’s dwellings. It was made a condition pre­
cedent for a loan that the money be used for the construction of
houses for laborers and that the plans of the undertaking be approved
from a sanitary point of view. The finance minister w authorized
^as
to obtain proper security for the loan. The repayment of the loan
was to be made at 4 per cent annually by a system of amortization,
3 per cent being for interest on each outstanding balance. All
requests for loans had to be made before 1889.
In addition to the above loan the minister of finance was per­
mitted to make loans up to 1,000,000 crowns ($268,000) until 1897
to Copenhagen and other cities upon their own guaranty for the
construction of good and sanitary workmen’s dwellings. Loans were
to be made to the municipality or to noncommercial associations on
the condition that the latter limit their dividends to 4 per cent
a year. The terms of the loan were otherwise the same as above for
loans for rebuilding city areas.
This law had scarcely any practical results. No loans for rebuild­
ing city areas were ever made, and only 367,000 crowns ($98,356)
were loaned to four building associations in the 10-year period o f '
the operation of the law.
The law came up for revision in 1897, and was passed on February
26, 1898. The first type of loan, that to municipalities for the
demolition and reconstruction of areas, was decreased to 2,000,000
crowns ($536,000) and a like amount was to be loaned to the build­
ing associations or municipalities for erecting laborers’ individual



117

118

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

dwellings. No limit was placed upon the maximum dividends to
be paid by the building associations receiving loans of this second
type, but it was made a requirement that all houses built by asso­
ciations receiving loans from the State were to be sold only to indi­
viduals intending to occupy them as their own homes. Purchasers
were not required to be exclusively manual laborers, as under the
act of 1887, but might be any persons of small means. The pro­
vision of the act of 1887 requiring the guaranty of the municipality
for loans to building associations was stricken out in this act of 1898.
This law at once appeared to be of practical value, for so numer­
ous were the requests for loans that the year following its passage
the finance minister asked that the whole sum appropriated for the
whole period, or 2,000,000 crowns ($536,000), be made available at
once. The lawT was to continue in force till March 31, 1904. And
at the end of this latter period it was practically reenacted to con­
tinue in force for a 5-year period, until March 31, 1909.
LEGISLATION IN FORCE.

The last law passed, March 5, 1909, is applicable until the close
of March 31, 1914, and may be summarized as follows:
Loans may be made to communes, or to building associations
meeting certain requirements, for the purpose of constructing good
and low-cost dwellings for the use of workmen or persons of like
means in the neighborhood of commercial towns, including Copen­
hagen, or large villages.
Loans must be paid off at the rate of 4 per cent per annum, of
which 3 per cent goes to interest on the principal, and the remainder
toward paying off the principal of the loan. The loan must be secured
by a first mortgage on the property in question, and not exceed twothirds of the valuation of the property mortgaged, as determined by
the minister of finance after appraisement.
The total amount of such loans must not exceed 400,000 crowns
($107,200) per annum, but any surplus of a previous year may be
added to the sum available for the succeeding year.
The building associations which desire to share the advantages of
the law must submit an annual report of their operations to the local
authorities who must in turn report it to the minister of finance.
The minister of finance may issue further regulations governing such
loans and may also order their withdrawal on six months7 notice if
he deems the conditions are not being complied with.
APPLICATION OF THE LAWS.

Under the act of March 29, 1887, there was set aside for loans to
municipalities and building associations 1,000,000 crowns ($268,000).
Building loans amounted to 417,000 crowns ($111,756), consisting of



119

GOVERNMENT AID TO HOUSING---- D E N M A R K .

four loans, three of which were of 33,000 crowns ($8,844) each, and
one of 100,000 crowns ($26,800), made to societies in Copenhagen;
and also of seven loans outside of Copenhagen, which varied from
10,000 to 50,000 crowns ($2,680 to $13,400).
Under the act of February 26,1898, there were available until 1904
2,000,000 crowns ($536,000). From this amount 12 building loans
were placed, amounting to 1,981,000 crowns ($530,908), divided as
follows: Eight loans amounting to 1,863,000 crowns ($499,284) for
construction of houses in Copenhagen; three loans of 93,000 crowns
($24,924) in other districts; and one loan of 25,000 crowns ($6,700)
to a municipality.
Under the act of April 22, 1904, to continue in force until March
31, 1909, there were made available 300,000 crowns ($80,400) annu­
ally. Advances were made under this act to an amount of 1,483,000
crowns ($397,444) in 22 loans, 2 to building associations in Copen­
hagen amounting to 460,000 crowns ($123,280), and 20 to associations
outside of Copenhagen amounting to 1,023,000 crowns ($274,164).
In a]l cases at the close of each period there were under consider­
ation other loans, which had been requested, the fund available not
being sufficient to meet the demands.
Under the act of March 5,1909, there was made available 2,000,000
crowns ($536,000). Loans were made to the amount of the total
available, some of which, however, had not been actually paid out
up to 1914. The sums disbursed were divided among 35 loans, of
which one of 9,500 crowns ($2,546) was placed in Copenhagen and
the balance of 1,990,500 crowns ($533,454) was placed in the other
districts.
The table which follows gives in summary form the amounts
appropriated and the amounts actually loaned to building associations
under the various housing acts in Denmark.
A M O U N T S A P P R O P R I A T E D A N D L O A N E D U N D E R D A N IS H H O U S IN G A C T S , 1887 TO 1914.
[Source: Forslag til Lov om Laan til Byggeforeninger.

Bemserkninger til Lovforslaget.

Copenhagen, 1914.J

!

Amount loaned in —
Date of law.

Amount ap­
propriated.
Copenhagen.

________
Mar.
Pel).
Apr.
Mar.

29, 1 8 8 7
2ft, 1 8 9 8
22, 1 9 0 4
5, 1 9 0 9 . .

............................................. 1
.............................................
.................•.................... : _____
.............................................

Total

Other dis­
tricts,

Total
loaned.

$268,000
536.000
402.000
536.000

$53,332
499,498
96,480
2,546

$58,424
31,024
300,964
533,454

S ill, !.v;

1,742,000

651,850

924,466

1,570,322

53;,122
397, \ I }
53-', 0 0 0

Under the act of 1904 only $348,158.80 out of the $397,444 origi­
nally loaned was actually paid out inasmuch as it was found neces­
sary to reduce some of the loans on account of insufficient security.




120

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

Likewise, under the act of 1909, only $393,951.06 had been paid
out as late as the early months of 1914, while it appeared that a
loan of about $123,280 might be withdrawn in the course of the
financial year.
SUCCESS OF THE HOUSING ACTS.

From a letter received recently from the American legation at
Copenhagen it is stated that the State funds loaned through the
building associations have benefited the class of people intended to
be reached. The persons living in these houses have usually been
workingmen of small means, truck gardeners, handicraftsmen, civilservice employees, and others of moderate means.
The single and two-family houses have been the commonest types
of houses built, with each dwelling composed of from two to three
rooms, together with a kitchen, an attic, a cellar, and a garden plot.
REPORT OF THE VALBY W O R KIN G M EN ’S BUILDING
ASSOCIATION, JANUARY 1 TO JUNE 30, 1913.

Each building association which borrows State funds is required to
report its operations to the minister of finance. Such a semiannual
report of a typical association for the fiscal period January 1 to
June 30, 1913, is here presented. This is the twenty-eighth semi­
annual report of this association.
Income account o f the Veil by Workingmen's Building Association, Jan. 1 to Jane 30,1913.
RECEIPTS.

Cash, on liand Jan. 1, 1913.................................................................
Income from properties and repayments on loans...................
Interest:
From association members....................................... $68.12
On deposits in bank.................................................... 57. 73
— ----- Fees collected............................................................................... - - - Water rents.............................................................................................

$1, 829. 48
8, 528. 30

Total.............................................................................................

10, 488. 67

125.85
.70
4. 34

EX PEND ITU R ES.

Interest on:
State treasury loans...........................................
Loans from credit associations.......................
Bonds outstanding.............................................
Repayments on:
State treasury loans...........................................
Credit association loans....................................
Bonds......................................................................




999. 86
1, 517. 29
1, 350. 28
---------------------

3, 867. 43

608.14
178. 45
1, 741.13
_____________

2,527.72

GOVERNMENT AID TO HOUSING— DENM ARK.

121

Expenses:
Contribution to reserve and administrative expenses of
East Parish Credit Association........................................
$50.27
Taxes................................................................................................
1,008.33
Other................................ ...............................................................
255. 23
Fire insurance premium...................................................................
47. 53
Insurance account...............................................................................
57.-89
Maintenance and repair account...................................................
160. 80
Miscellaneous expenses:
Properties.......................................................................................
40. £0
Roads and sites............................................................................
87. 93
Goose Brook Drain account (third payment and interest at 4
per cent on balance)........................................................................
347. 04
Administrative expenses:
Salary of president and treasurer.................
$72. 36
Office rent.............................................................
25. 73
Office expenses...................................................
6. 41
-------------------- 104.50
Miscellaneous expenses:
8. 63
Tithes.....................................................................
Yalby:
Vacation home....................................................
5. 36
Other.......................................................................
6. 70
-------------------- 20.69
Refund of payment made by shareholder No. 6 ........................
54. 94
Cash on hand June 30, 1913......................... ....................................
1, 857. 87
Total.............................................................................................

10, 488. 67

This income account scarcely calls for any comment. In the
course of the half year which the report covers there was charged
to the maintenance and repair account 600 crowns ($160.80), while,
as shown in a separate statement on the state of the account, there
was expended from it for actual repair on the properties of the com­
pany 1,371 crowns ($367.43), leaving a favorable cash balance of
3,643.11 crowns ($976.35).
The cash balance of the income account on January 1, 1913,
was 6,826.43 crowns ($1,829.38), while on June 30, 1913, it was
6,932.35 crowns ($1,857.87), an increase of 105.92 crowns ($28.39).
These are indeed small sums, but they are in proper proportion to
the amounts as a whole dealt with in the report of this unpretentious
cooperative association of workingmen of moderate means who have
set out to solve the problem of securing their own homes by the aid
of the State.
The statement which follows is the balance sheet of this same
building association of workingmen. Attention is called to the fact
that the houses owned by it are listed among its assets at their
actual value, and, for borrowing purposes, are appraised by the min­
ister of finance as provided in the act of 1909. In a column at the
right of the statement of its liabilities are shown the original face




BULLETIN OF THE BUREAU OF LABOR STATISTICS.

122

values of the several loans made by the association. This statement
makes it possible to judge whether or not the loans are being properly
liquidated.
B A L A N C E S H E E T OF T H E V A L B Y

W O R K I N G M E N ’ S B U IL D IN G
30, 1913.

xVSSOCIATION, JU N E

Amount
of original
loan.

Assets.

Liabilities.

Buildings, mortgage valuation___ $281,400. 00
Rents outstanding.............................
2, 403. 83
1,857.87
23. 32
Deposit with electric-light com­
pany.
Insurance account. . . .
993.10
976. 35
Maintenance account........................
Other......................................................
75. 20

State treasury loan
. .
•166,049. 27
--------- Credit Association loan.......... 68,101. 93
--------- Credit Association loan
7,584. 40
--------- bonds
16,368. 49

!
Total........................................... 1 287,729.67
!

——— bonds. . .
-------- - bonds...........................................

SS0,400.00
71,127. 20
7, 879.20
38.324.00

33,581.57
2,587.54

41.540.00
6,137.20

Total first mortgages
194,273. 20
Due to members, repayments on 151,146. 07
mortgage debts.
Due on Goose Brook D rain.............
1,840.36
Balance, assets over liabilities........ 40,470. 04

245,407.60

T o ta l............................................. 287, 729. 67

1 Repayments on first mortgages are 116.44 crowns ($31.21) semiannually for each member of the asso­
ciation.

As far as it is possible under any circumstances to determine the
stability of a company by the mere showing of its balance sheet, it
would appear in this instance that there is a safe margin of assets
over liabilities—i. e., 151,007.63 crowns (§40,470.04). This is 14.4
per cent of the actual mortgage valuation of the properties of the
company. Taking only the mortgaged properties into consideration
it is seen that these have a value of $281,400, while the loans out­
standing on them amount to $194,273.20, which is 69 per cent of
the value of these same properties. Thus it appears that the general
average of all loans is a trifle over two-thirds of the value of the
properties offered as security. The State requires that a loan made
with its funds shall not exceed two-thirds of the value of the prop­
erty offered as security. Apparently this particular building asso­
ciation has accepted this ratio in conducting its business as a whole,
GOVERNMENT PROPOSAL FOR REVISION OF LAW,
Inasmuch, as the act of 1909 made the amount appropriated avail­
able only until March 31, 1914, a bill for a new appropriation for
housing purposes has been submitted by the minister of finance.
This bill, if passed, will make available 400,000 crowns ($107,200)
annually from April 1, 1914, until March 31, 1919— that is, for a
period of five years.1
The bill also proposes some changes in the act of 1909. It ex­
plicitly includes among workmen or those of small means, small cul­
tivators of the soil, small tradesmen, low-paid commercial employees,
and others. Furthermore, the provision for making loans to murii1
cto\

‘
n

i

11

^ ±

i 1 ) )

V rll 21, 1914, to continue in force until March 31, 1917, and makes available 500,000
nnually.




GOVERNMENT AID TO HOUSING— DENM ARK.

123

cipalities is eliminated because it lias proved to be without practical
results. The rate of interest and repayment on loans is increased
from 4 to 5 per cent, of which 4 per cent is interest on the principal.
The amount of loan applicable to any piece of property is raised
from two-thirds to four-fifths of its assessed value, so as to encourage
the taking up of existing mortgage obligations.
MOUSING STATE EMPLOYEES AND IM M IGRANT LABOR.
A small amount of work has been done by the central Government
in housing its own employees on the State railroads, the telegraph
service, etc. There is also a law (Apr. 1, 1912) which requires that
employers of immigrant seasonal labor shall provide adequate
housing accommodation for these employees.
SMALL HOLDINGS.

The special advantages which have existed in Denmark for the small
peasant proprietors since 1899 are of great interest and importance
in the agricultural development of Denmark. A series of laws begin­
ning with that of March 24, 1899, furnished to rural and urban laborers
of small means State funds with v/hich to purchase small holdings.
Each law was passed for a term of only five years, but so beneficial
were the results that no law failed of reenactment. The most recent
law now in force is that of June, 1914, which is to continue in force
for three years.
According to this law workmen and other persons of small means
between 25 and 50 years of age who are citizens of Denmark may
secure a State loan to aid in the purchase of a small holding (2,7 to
10.9 acres) not to exceed 5,000 crowns ($1,340) in value; the total
amount loanable, however, is only nine-tenths of above, the borrower
being compelled to supply one-tenth of the purchase price. The
borrower pays interest at 3 per cent plus a payment on the principal
to make a total payment of 4 per cent a year of the total sum loaned.
The amounts appropriated under each act in each of the fiveyear periods to which the act applied are as follows: Act of 1899,
$3,685,000; act of 1904, $4,020,000; act of 1909, $5,360,000; act of
1914 (3 years), $4,020,000.
These laws have had very beneficial results. The total number of
peasant proprietors who, by the assistance of the State fund,•became
owners of their properties from 1900 to March 31, 1914, was 7,117.
The State has loaned in all approximately 33,634,000 crowns
($9,013,912).1 That the State has been successful in encouraging
the younger farmers to establish themselves as owners is shown by
the fact that 3,895 (71.6 per cent) of the 5,441 borrowers concerning
whom information is available, up to 1911, were between the agc-s of
25 and 40, and 1,274 (23.4 per cent) were from 40 to 50 years of age.



1 Statistisk aarbog, 1914, p. 39.

124

BULLETIN OF THE ByR EAU OF LABOR STATISTICS.

Over four-fifths (82.2 per cent) of the purchasers of properties were
married. Day laborers made up 72.7 per cent, agricultural laborers
and domestic servants 9.7 per cent, and other occupations not speci­
fied 17.6 per cent.
The average size of holding purchased was 3.16 hectaresd (7.81
acres) under the law of 1899, but since 1904 there has been a gradual
increase in the size of the farm purchased. Thus under the act of
1909 the average size was 4.22 hectares (10.42 acres).
The total losses have amounted to only 10,000 crowns ($2,680).
LIST OF REFERENCES CONSULTED.
Sweden. Egnaliemskomiten Betankande af den utaf Kongl. Maj:t den 10 Juli
1899 tilsatta Egnahemskomiten. Stockholm, 1901. 2 v. (Sweden. Commission
on home ownership, July 10, 1899. Reports. Stockholm, 1901. Vol. 2, p. 30.)
Denmark. Tillseg A til Rigsdagstidenden. 6de ordentlige Samling 1908-9. II.
Copenhagen, 1909, p. 3263. (Denmark. Parliamentary proceedings.
Supple­
ment A . 61st sees., 1908-9. Copenhagen, 1909. Vol. 2, p. 3263.)
Forslag til Lov om Laan til Byggeforeninger. (Bill to make State loans to building
associations.) [Copenhagen, 1914.]
Regnskab for Yalby Arbeideres Byggeforening fra 1. Januar til 30. Juni 1913. (Finan­
cial report of the Yalby Workingmen’s Building Association for the period, Jan. 1
to June 30, 1913.) [Copenhagen, 1913.1
Lov om opprettelse af husmandsbrug og m. fl. [Copenhagen, 1914.] (Law on the
creation of laborers’ holdings.)
Statistiske meddelelser, 4. rsekke, 39 bd. 6. hefte.
Statsmandsbrug oprettede i
finansaarene 1900/01-1910/11.
Udgivet af Stateus statistiske bureau.
Copen­
hagen, 1912. Pt. 6.
Statistisk aarbog, 19de aargang 1914. Copenhagen, 1914.




FRANCE*
INTRODUCTION.

The general aim of French housing legislation has been to encour­
age individuals and societies to construct houses for workingmen
by granting them loans from certain Government banks and public
institutions and by allowing certain tax exemptions on homes so
constructed.
The attention of the public authorities was first directed to the
subject of construction of houses for those of small means in 1852,
when the Government appropriated 10,000,000 francs ($1,930,000),
2,000,000 francs ($386,000) to be employed in the construction of 17
five-story tenements divided into apartments of two and three rooms
and kitchen, while another 2,000,000 francs ($386,000) was granted as
a subsidy to builders of workingmen's houses. Some of this last
amount was to be distributed throughout the Departments to building
associations and garden city societies, notably that at Mulhausen.
This act on the part of the Government resulted in much discussion
of the housing problem and brought forth many suggestions. Among
these suggestions were those for workingmen’s cities made up of
houses costing 2,000 ($386) to 4,000 ($772) francs. Plans were
offered for the construction of portable houses {des maisons demontalles en hois) on the part of the State upon unoccupied areas.
The practical results were not considerable. The tenements built
by the State were not rented by the families of laborers, but by those
of the middle class. These tenements were later disposed of, and one
was turned into a bachelor apartment. In making subvention to
building associations the restrictions imposed by the State architect
were not encouraging, one requirement, for instance, being that the
price of the ground area be limited to from 7.5 to 8 francs ($1.45 to
$1.54) per square meter (10.8 square feet) of floor area. This and
other conditions limited the profits of builders to about 5 per cent or
less on their investments.
The Emperor Napoleon III himself constructed 41 houses in Paris,
which he offered to the workingmen’s society on condition that its
members subscribe 100 francs ($19.30) each. This was done, and the




125

126

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

houses, which had cost 500,000 francs ($96,500) were transferred to
the society. The cooperative society showed poor management, and
a number of shareholders tried to wreck the scheme, but a majority of
the shareholders blocked this plan, took hold of the management suc­
cessfully, and elected an administrative board.
The Messrs. Pereire, who received part of the 2,000,000 francs
($386,000) subsidy, constructed a vast building in the Rue Boursault,
containing 204 dwellings, but this enterprise failed because of the
severity of the rules and regulations governing tenants.
Besides these activities, the French Government, in its capacity of
employer, has been interested in building houses for lodging its
employees in the forestry service, customs service, and upon the State
railroads.
In 1866 the Workmen's Dwellings Association of Amiens (Societe
des maisons ouvrieres d’ Amiens) was founded, but it was not until
1889, the year of the industrial exhibition in Paris, that efforts took
on a larger scope. In that year was founded the French Association
for Cheap Dwellings {Societe franqaise des habitations a ion marche).
This society has for its general object the encouragement of the
construction of sanitary and inexpensive houses for workmen by
publishing literature on the subject, presenting plans, distributing
information, and the like. In 1894 it was instrumental in having
the law of that year (Nov. 30, 1894) passed which encouraged home
owning by creating certain local supervisory committees to encourage
private initiative and to hold meetings; by offering certain privileges
to building associations in the way of exemption from stamp taxes
and registration fees; by permitting building and loan associations
to borrow certain public funds; by providing for a system of life insur­
ance in connection with repayment of loans by installments; and,
finally, b}^ liberalizing the laws for these associations, for the transfer
of homes by succession to the widow or children.
The act remained substantially unchanged until 1906. In this
year another act was passed, which added no new feature to the pre­
vious law, but extended its operation by allowing loans of a larger
amount on larger ground areas in connection with the houses pur­
chased. It likewise included a provision allowing loans to municipali ­
ties for building public baths and laying out garden cities. It was
amended extensively, however, on February 26, 1912, and was inci­
dentally modified by the law of December 23, 1912.
These two laws, then— namely, those of April 12,1906, and Decem­
ber 23, 1912— together with the law on small holdings and low-cost
dwellings of April 10, 1908, constitute the main body of French
legislation relative to loans for home building for those of small
means.




GOVERNMENT AID TO HOUSING---- FRANCE.

127

This French housing legislation contains the same three features
which are found in Belgian legislation: (1) Creation of certain local
patronage committees for the purpose of propaganda in encouraging
home owning, supervising sanitary conditions, and giving encourage­
ment to the formation of mutual benefit societies among working­
men; (2) authorization of the Bank of Deposits ( Vaisse des depots et
consignations), a Government insitution, and of the National Old-Age
Retirement Fund to make loans to building and loan associations
for the construction of low-priced workmen’s dwellings; and (3) the
principle of life insurance on the part of the borrowers in connection
with the taking out of loans.
LEGISLATION IN FORCE IN AID OF WORKMEN’S DWELLINGS,
CONDITIONS APPLYING TO CHEAP DWELLINGS.

The term cheap dwelling (habitation a bon marche) may be defined
as meaning a dwelling constructed in conformity with all the require­
ments of durability and healthfulness specified in the act of 1906.
Such dwellings may be rented or sold. They may be detached, indi­
vidual houses or tenement structures (maisons collectives). A dwelling
house, to come within the terms of the act, must (1) be intended for
the occupancy of persons of small means; (2) not exceed a certain
maximum rental value fixed by the law; and (3) be of sanitary con­
struction. By persons of small means are meant, generally, ordinary
laborers living principally on a daily wage, a vague term left to be
defined in practice by administrative officers and courts.
The maximum rental value of the dwelling is fixed according to
its size and the population of the m u n ic ip a lity o f its location. It
is also stipulated that the actual rental value may not fall below
this fixed maximum by more than one-fourth, a provision which
has been inserted, undoubtedly, in order that loans may not be­
come unprofitable by reason of their insignificance in amount. The
maximum rental values shown in the table which follow's were fixed
by the amending act of February 26, 1912, and are considerably
increased over those in the act of 1906. This increase was necessary,
it is reliably stated, on account of the increased cost of labor and build­
ing material in recent years.




128

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

MAXIMUM RENTAL VALUE OF APARTMENTS IN TENEMENTS CONSTRUCTED AS
“ CHEAP DWELLINGS ” UNDER THE ACTS OF APR. 12, 1906, AND DEC. 23,1912.
Apartments
Apartments
with 3rooms or
with 2 rooms
Apartments
Apartments
more, of 9 square having 9 square with 1room 9
of a single room
meters (96.87
meters (96.87
square meters
9 square meters
square feet) floor square feet) floor (96.87 square feet)
space or less and space or less and floor space and (96.87square feet)
floor space.kitchen and
kitchen and
kitchen.
toilets.
toilets.
1. Municipalities of 2,000 in­
habitants or less...............
2. Municipalities of 2,001 to
5.000 inhabitants..............
3. Municipalities of 5,001 to
15.000 inhabitants............
4. Municipalities of 15,001 to
30.000 inhabitants and sub­
urbs of municipalities of
30.000 to 200,000 inhabit­
ants within 10 kilometers
(6.2 miles)........................
5. Municipalities of 30,001 to
200,000 inhabitants and
suburbs of those of 200,001
inhabitants and over, with­
in 15kilometers (9.3 miles),
and Greater Paris, i. e., mu­
nicipalities whose distance
from fortifications is over
20 kilometers (12.4 miles),
but not over 40 kilometers
(24.9 miles).....................
G Municipalities of 200,001 in­
.
habitants and over and the
inner suburbs of Paris
within 20 kilometers (12.4
miles).............................
7. City of Paris.......................

Francs.

Francs.

Francs.

250 ($48.25)

205 ($39.57)

125 ($24.13)

80 ($15.44)

275 ($53.08)

225 ($43.43)

150 ($28.95)

90 ($17.37)

325 ($62.73)

250 ($48.25)

175 ($33.78)

100 ($19.30)

400 ($77.20)

325 ($62.73)

250 ($48.25)

125 ($24.13)

500 (896.50)
600 ($115.S )
O

400 ($77.20)
500 ($96.50)

300 ($57.90)
350 ($67.55)

175 ($33.78)
200 ($38.60)

220 ($42.46)

180 ($34.74)

120 ($23.16)

Francs.

70 ($13.51)

It is not necessary that all the apartments composing the tene­
ment should fulfill these conditions. It is only required that the
greater part of the premises come within the conditions. Nor does
the tenement lose its character of a cheap dwelling if the ground floor
is turned into shops nor if the apartments on a single floor exceed the
maximum rental value fixed by law. Such shops and apartments do
not benefit by the tax exemption.
As regards one-family houses, socially more desirable, but the
cost price of which is higher than an apartment in a tenement, the
maximum rent is fixed by law at an increase of one-fifth over the
latter. This maximum rental value is determined in all cases at
4.75 per cent of the net cost, and thus it is easy to determine before­
hand the maximum net cost which a house may not exceed in any
given community. As the maximum rent is fixed by law for the
different classes of apartments according to the population of the
different cities, and as the rent of one-family dwellings must not
exceed one and one-fifth that of the same class of apartments, it is
easy to compute the maximum net cost of one-family dwellings.
When computed, this net cost determines the amount of a borrower’s
loan. Furthermore, a ground site not in excess of 10 ares (10,764




GOVERNMENT AID TO HOUSING---- FRANCE.

129

square feet) in connection with a detached house may be purchased
with the same loan; this would be equivalent to a lot 100 by
107.64 feet.
The following table shows the maximum annual rent of one-family
dwellings, based on the cost of construction and the population of
the locality in which built:
MAXIMUM RENTAL VALUE AND MAXIMUM COST OF SINGLE-FAMILY HOUSES CONSTUCTED AS “ CHEAP DWELLINGS UNDER THE ACTS OF APR. 12, 1900, AND
DEC. 23, 1912.
Houses with
3 rooms or more
of 9 square
meters (96.87 sq.
ft.) floor space or
less and kitchen
and toilets.
1. Municipalities of 2,000 inhab• itants or less:
Maximum rental value.. .
Maximum net cost............

2. Municipalities of

3.

4.

5.

6.

7.

F ran cs.

Houses with
2 rooms having Houses of 1room Houses single
9 square meters of 9 square meters room of ofsquare
9
(96.87 sq.ft.) _
(96.87 sq. ft.)
floor space or less floor space and meters (96.87 sq
ft.) floor space.
kitchen.
and kitchen and
•
toilets.

F ran cs.

Fran cs.

F ran cs.

264 ($50.95)
5,557 ($1,072.50)

216 ($41.69)
4,547 ($877.57)

144 ($27.79:
3,031 ($584.98)

84 ($16.21)
1,768 ($341.22)

300 ($57.90)
6,315 ($1,218.80)

246 ($47.48)
5,178 ($999.35)

150 ($28.95)
3,157 ($609.30)

96 ($18.53)
2,021 ($390.05)

330 ($63.69)
270 ($52.11)
6,947 ($1,340.77) 5,684 ($1,097.01:

180 ($34.74)
3,789 (:$731. 28)

108 ($20.84)
2,273 ($438.69)

300 ($57.90)
390 ($75.27)
8,210 ($1,584.53) 6,315 ($1,218.80)

210 ($40.53)
4,421 ($853.25)

120 ($23.16)
2,526 ($487.52)

300 ($57.90)
390 ($75.27)
480 ($92.64)
10,105 ($1,950.27) 8,210 ($1,584.53) 6,315 ($1,218.80)

150 ($28.95
3,157 ($609. 30)

360 ($69.48)
600 ($115.80)
480 ($92.64)!
12,631 ($2,437.78) 10,105 ($1,950.27)| 7,578 ($1,462.55)

210 ($40.53)
4,421 ($853.25)

420 ($81.06)
600 ($-115.80)!
720 ($138.96)
15,157 ($2,925.30) 12,631 ($2,437.78) 8,842 ($1,706.51

240 ($46.32)
5,052 ($975.04)

2,001 to

5,003 inhabitants:
Maximum rental valu e...
Maximum net cost............
Municipalities of 5,001 to
15.000 inhabitants:
Maximum rental value.. .
Maximum net cost............
Municipalities of 15.001 to
30.000 inhabitants and sub­
urbs of municipalities of
30.001 to 200,000 inhabit­
ants w iliin 10 kilometers
(6.2 miles):
Maximum rental v a lu e ...
Maximum net cost............
Municipalities of 30,001 to
200,000 inhabitants. Sub­
urbs of those of 200,001 in­
habitants and over within
15 kilometers (9.3 miles)
and Greater Paris, i. e.,
municipalities whose dis­
tance from fortifications is
over 20 kilometers (12.4
miles) but not over 40kilo­
meters (24.9 miles):
Maximum rental value..
M aximum net cost............
Municipalities of 200,001 in­
habitants and over and
the inner suburbs of Paris
within 20 kilometers (12.4
miles):
M aximum rental v alu e.. .
Maximum net cost.............
City of Paris:
Maximum rental v alu e .. .
M aximum net cost............

As to the nature of this net cost of construction it may be said
that there is included therein only so much ground space as is cov­
ered by the dwelling. The cost of the extra ground mentioned above
must be made an additional part of the loan. Cost of water and
sewer mains is not included, but cost of fire insurance is in the case
of a house purchased. These restrictions have been the subject of
CG1710— Bull. 158— 15------ 9




130

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

criticism as discouraging a purchaser from securing as much ground
area for his house as proper sanitary considerations would require.
It is claimed that they would lead to congestion in building and to poor
water and sewerage equipment. As a basis for determining the net
ost by the authorities, the interested party must produce all the
phins, specifications, and contracts of the builder.
In addition to the two requirements that the house shall be for
those of small means and be of a certain rental value or net cost, the
third requirement is that as regards healthfulness it .shall be con­
structed in conformity with the sanitary inspection law of February
15, 1902; and the local patronage committees must be satisfied that
this provision has been observed. A certificate from the committee
to this effect is a condition precedent to the obtaining of a loan for
construction. Furthermore, the committee is required to cause in­
spection of the houses to be made as long as they benefit by the tax
exemptions, explained in the following paragraphs, and may require
a loan to be canceled if the sanitary conditions are not complied with.
TAX EXEMPTIONS FOR CHEAP DWELLINGS.

For a period of 12 years (5 years by the act of 1906, increased to
12 by act of 1912) after its construction a “ cheap dwelling” is
exempt from the land tax and the door and the window tax. The
exemption from the land tax applies only to so much of the ground
plot as is occupied by the house, and not to yards or garden in con­
nection therewith. To secure the exemption the owner or purchaser
must register his claim and show that the house complies with the
conditions of the law.
BUILDING AND LOAN ASSOCIATIONS.

“ Low-cost dwellings” may be constructed by private individuals
either for sale or for rent. Employers may construct them for their
employees. The action of these parties is apt to be very limited, so
the legislature had recourse to special institutions. Among these
are building associations which are divided into two classes, ordinary
noncooperative stock companies and cooperative societies. In
noncooperative stock companies the renters or purchasers are not
necessarily shareholders, and in reality are never such. The com­
panies are established by capitalists who desire to assist in a
philanthropic and social undertaking and are satisfied with a mod­
erate profit. In the cooperative societies the stockholders are the
actual purchasers or renters of the dwellings constructed by the
society. Whatever the form of organization, however, the business
of the society is threefold: (1) Construction of tenements for sale or
rent, (2) construction of single-familv houses for sale or rent, and (3)
making of advances to individuals who wish to build their own houses.



GOVERNMENT AID TO HOUSING---- FRANCE.

131

Those building and loan associations which desire to take advan­
tage of the privileges of the law must comply with certain conditions:
(1) Limit their dividends to 4 per cent; (2) submit their by-laws to
the approval of the authorities; (3) make an annual report to the
housing council elsewhere described (see p. 136); and (4) comply with
certain rules in the event of winding up their affairs. In return for
these requirements they have certain privileges, as follows:
I. Tax exemptions of three kinds are granted: (a) Stamp and reg­
istration fees on their documents, shares, bonds, mortgages, etc.; (b)
licenses and excise taxes on interest from their securities; (c) inher­
itance taxes, but only if they confine themselves to the construction
and sale of low-cost dwellings and do not build for rental purposes.
II. Financial advantages of importance are accorded to building
and loan associations as follows:
First. Three sets of institutions are permitted to purchase their
shares, namely: (1) Charitable institutions, (2) municipalities and De­
partments, and (3) the general savings banks. Charitable institu­
tions may invest their funds only on the authorization of the local
prefect, they may not own over two-thirds of the capital of any single
association, and their shares must all be paid in. They may not
invest in these building associations over one-fifth of their assets, ac­
cording to the law of April 12, 1906; two-fifths by the act of December
23, 1912. Municipalities and Departments, after permission from the
minister of labor to buy building association shares, are subject to the
same restrictions as charitable institutions in regard to the amount
of shares they may hold of any building association. They may
exchange expropriated land for shares on equal terms. Savings
banks may devote under various forms one-half their capital and
surplus to housing projects under the restriction that the sum of these
investments added to the cost price of their real estate holdings does
not exceed 70 per cent of their capital and surplus, but they may not
hold over two-thirds of the shares of any building association.
Second. Four sets of institutions are permitted to purchase the
bonds of building and loan associations, namely, the three institu­
tions named above, and in addition the Bank of Deposits (Oaisse des
depots et consignations) , a Government institution. This latter may
employ two-fifths of its reserve and the guaranty deposits of the
savings banks for this purpose.
Third. Ordinary current loans may also be made to the building
and loan associations by charitable institutions, municipalities, and
Departments, and by the general savings banks provided they secure
a mortgage guarantee.
Fourth. Municipalities and Departments may transfer lands or
buildings to building and loan associations at a price not less than
one-half the value thereof.




132

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

Municipalities and Departments may guarantee up to 3 per cent,
without limitation as to time, the interest on the bonds of these asso­
ciations, and they may guarantee their dividends for a period not
exceeding 20 years.
INSTITUTIONS AUTHORIZED TO CONSTRUCT LOW-COST DWELLINGS.

Some of the institutions mentioned above may participate more
directly in the construction of cheap dwellings: (1) Charitable insti­
tutions, hospitals, and asylums, which may construct dwellings, either
tenement or detached, upon the authorization of the prefect; (2) sav­
ings banks; (3) municipalities. The latter are mainly engaged in
constructing tenements for workmen with large families.
Authorization is given to these institutions by decree of the State
council after public inquiry and upon advice of the board of health
of the Department and of the local housing or patronage committee.
The actual construction of these houses need not be undertaken by
the municipalities, but is directly intrusted either to the public office
for cheap dwellings in the locality or to the building association. For
this purpose the municipality may contract loans from the Bank of
Deposits, savings banks, charitable institutions, and asylums which
are specially authorized to make loans to the municipality, in the
same way as to building and loan associations.
INSTITUTIONS AUTHORIZED TO MAKE LOANS TO INDIVIDUALS.

Savings banks are authorized to make mortgage loans to individuals
payable by a system of amortization; that is, by gradual liquidation
of the principal and interest in equal annual installments.
PUBLIC OFFICES FOR CHEAP DWELLINGS.

Under the law of December 23, 1912, public institutions known as
public offices for cheap dwellings (offices publics d1
habitations a bon
marche) may be established in a municipality. These are permanent
bodies through which the municipalities conduct their operations.
To these offices is intrusted the administration of the sanitary laws
governing dwellings as well as laws concerned with the construction
and management of garden cities (cites-jardins) ^public baths, public
laundries, playgrounds, and day nurseries.
These offices are located in a municipality at the request of the
municipal council or on the request of the general council of the
Department. They are supported by means of subsidies from the
municipalities and the Departments. The offices are administered by
a board of directors of 18 members, one-third appointed by the prefect,
and one-third by the municipal council or by the administrative
1Cit6s-jardins are defined as a collection of dwellings, especially of laborers or farmers, so arranged that
only one-fifth of the land is available for buildings, the balance remaining open spaces.




GOVERNMENT AID TO HOUSING---- FRANCE.

133

council of the Department concerned, the remaining one-third being
chosen by the different rnntual aid and welfare institutions situated
in the locality and interested in the housing work carried on under
these laws.
Large powers are granted to these offices for cheap dwellings.
They may receive, in addition to the sums appropriated by De­
partments and municipalities, private donations and legacies designed
to increase their capital. If these resources are insufficient for their
purposes they are authorized to borrow. Departments and munici­
palities may make loans to them and may guarantee the interest and
the payment of loans contracted by them. Finally, the different
bureaus or public institutions which are permitted to make loans or
advances to cheap dwellings associations are authorized to lend to
the public offices for cheap dwellings on the same terms that they do
to the associations.
SPECIAL PROVISIONS FOR AID IN HOUSING OF LARGE FAMILIES.

The several housing acts and other special acts, particularly those
of July 13, 1912, and July 14, 1913/ contain provisions favoring
the building of homes for large families— i. e., those having more
than three children under 16 years of age. Thus, for instance,
the building societies benefit in that respect by securing lower tax
rates on such houses; municipalities are permitted to construct homes
especially for such families. Also, municipalities may make subsidies
to public housing offices and building associations to erect properties
for that type of family. Such subsidies, however, may not exceed
annually 1 per cent of the net cost of the house, and must be used
by the societies profiting thereby exclusively in the reduction of rent
of apartments occupied by large families. These subsidies may con­
tinue for eighteen years from the time of the completion of the house,
and may be renewed at a reduced rate thereafter every five years if
desired.
If a family is both large and needy, the State contributes one-half
as much as the subsidy allowed to housing offices, municipalities, and
building societies. In certain instances the subsidy may be increased
to 2 per cent of the net cost of the house and may run for 30 years.
This is the case if at least one-half the rent of a property is to come
from apartments rented to families which are both large and in needy
circumstances. Any decisions of the municipal councils, however, in
this matter must receive the sanction of the ministers of the interior,
labor, and finance.
1Loi du 13juillet 1912 autorisant la ville de Paris a emprunter une somme de 200 millions en vue de
eonstruire des habitations a bon marche; loi du 14 juillet 1913 sur ^assistance aux families nombreuses,
arts. 2 , 13.




134

BULLETIN OF THE BUREAU OF LABOR STATISTICS.
FACILITIES FOR TRANSFER OF PROPERTY.

The law aims to modify the laws of transfer and inheritance of prop­
erty in favor of small owners so as to assist in maintaining the prop­
erty undivided for the use of the wife and children in case of the death
of the head of the family owning property under the law.
A peculiar system of transfer takes place, called ‘ ‘ attribution/7
whereby the heirs and the surviving spouse may take over the property undivided at a fair value determined in court as against other
claimants under existing property laws. If the heirs can not agree
thereon, resort is had to a system of lots. The main object attained
by this system is a saving of many of the ordinary expenses connected
with the hereditary transfer of property.
CONDITIONS GOVERNING LOANS TO INDIVIDUALS.

In addition to the requirements of the law as to the employment of
the prospective individual borrower as a daily wage earner, the value
of his proposed house and the character of its construction, certain
other conditions are imposed on him in order to entitle him to a loan.
The law has fixed the maximum rate of his interest payment at 4
per cent; one-tenth of the purchase price of the property must be
paid at the time of the sale. Repayment of the loan is to be made in
equal annual installments, including interest and principal, distributed
over varying periods of 10, 15, 20; and 25 years, with the right of
anticipating payments at any time.
As to the method of acquisition of the property, the use of a mort­
gage, as might be expected, is not resorted to, but a peculiar system
is employed whereby resort is had to a lease for a term of years con­
taining a provision for a future sale. By this method the holder of
the lease is not burdened directly with the payment of taxes, etc.,
which is attended to by the building and loan association with which
he deals. The system differs from a mortgage system mainly in the
fact that the leaseholder does not come into ownership at once, but
must watt until the end of his term, whereas, by the use of a mort­
gage, ownership and possession are contemporaneous. The practical
gain to the borrower lies in the fact that he is required to pay only
one-tenth of the purchase price at the time of the transaction, while
under a mortgage he is required to pay one-fifth.
LIFE INSURANCE TO GUARANTEE REPAYMENT OF LOANS.

The special rules regarding the maintenance of the property undi­
vided and securing facility of transfer applies to property which is
already paid for and in the possession of the decedent. If, how­
ever, death occurs before the payments are all made the property
would, in all probability, be lost to the heirs for lack of means to con­
tinue the payments. To provide against such a contingency France



G O VERN M EN T AID TO H O U SIN G ---- FRANCE.

135

followed the example of the Belgian housing act of 1889 and insti­
tuted a system of insurance whereby every purchaser of a piece of
property or a house may take out a term insurance policy for ail
amount equal to the sum to be paid on the house and for a period
equal to that for which the loan runs. The premium varies with the
insurant’s age and the period of the loan. The State insurance
institute created by the act of 1868 undertakes to pay the balance
due on any property purchased if the insured dies before completing
his payments while carrying insurance. Insurance may, however, be
taken out with the private companies, but these have shown little
disposition to engage in this business.
Unlike the system in Belgium, the State insurance institute in
France concerns itself only with insuring the individual purchaser,
while in Belgium the insurance company performs the dual function
of insurer and lender. The operations of the system in France are
carried on through the building societies, which in turn deal with the
individual borrower. The building society prepares all necessary
documents and saves the purchaser of insurance considerable expense
and trouble, while on the other hand the State insurance institute is
saved the trouble of dealing with hundreds of individual applicants
in the collection of premiums. Through the building associations
the State insurance institute can get its premiums paid annually in
a lump sum and leaves it to the building association to deal with
the individual insurers, who can pay their premiums in equal quar­
terly installments to the society. The premiums may be paid in any
one of three of the methods know^n in ordinary life insurance: (1)
Single-premium payment in advance; (2) step-rate premium in pro­
portion to the decreasing risk, this growing less each year; and (3)
level premium, a sum distributed equally over the whole term of the
insurance.
As to the conditions on which the policy is issued it is provided
(decree of Jan. 10, 1907) that the maximum value of the policy may
not exceed the net cost fixed by the law for cheap dwellings, and
that the payment of premium must be terminated before the age
of 65. Also, every insurant is required to pass a medical examina­
tion.
The following illustration as to how the costs of the insurance
bear upon the policy holder may serve to render the situation
clearer.1
If an individual 35 years of age desires to buy a house for $1,000
and to make his payment cover a period of 20 years at 4 per cent,
he takes out an insurance policy to insure his family’s becoming
i International Institute of Agriculture.
August, 1913, p. 68.




Monthly Bulletin of economics and social intelligence.

R om e,

136

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

owners if he dies before completing his 20 payments. The follow­
ing are some of the choices he has as to premium payments:
Single premium, lump slim, payable on signing contract............. $115. 70
Annual premium, payable in 11 annual installments.....................
12. 80
Annual decreasing premium to be paid in 20 installments:
First year.................................................................................................
12. 40
Fifth year................................................................................................
9. 75
Tenth, year..............................................................................................
7. 70
Fifteenth year.......................................................................................
6. 70
Twentieth year......................................................................................
1. 70

And if the premium were distributed over 20 years the level pre­
mium would only be $10 a year.
WORKMEN’S GARDENS, PUBLIC BATHS, AND LODGING HOUSES.

The act of 1906 extends its privileges to public housing offices,
building societies, and public bath associations, which include as one
of their purposes the sale or construction of public baths for workmen
and other persons contemplated by the law. The law permits savings
banks to make loans for this purpose and also for purchasing work­
men’s gardens, not exceeding 10 ares (| acre) in extent, on the same
conditions as for houses. Also, there are included as a part of the
dwelling entitled to privileges under the act gardens having an extent
of not more than 5 ares (J acre) adjoining the buildings, or gardens
of not over 10 ares (J acre) not adjoining buildings. These garden
areas, however, are not exempt from the land tax.
Lodging houses conducted by cheap dwellings building associations
may benefit by the tax exemptions and credit facilities extended by
the act of 1906 to cheap dwellings. The rental of a room in such a
house may not exceed that fixed by law for a single room and kitchen
in an apartment coming under the act. All prices must be posted
conspicuously.
ADMINISTRATION OF THE LAW.

The execution of the law is a part of the functions of the office
of insurance and social welfare ( direction de Vassurance et de la
<
prevoyance sociale) within the ministry of labor and social better­
ment (ministere du travail et de la prevoyance sociale). For its
direct administration there is created alongside of the above-named
office a superior housing council (conseil superieur des habitations a
bon marche) of 50 members having general oversight of all housing
questions. The council meets annually. For interim business there
is appointed from among its members by the minister a permanent
committee of 12 members. The housing council collates and pre­
pares the reports of the local patronage committees and presents an
annual summary thereof to the ministry.




GOVERNMENT AID TO HOUSING— FRANCE.

137

The local administration of the law in the various Departments
is looked after by the patronage committees, the creation of which is
compulsory for each Department. These committees are virtually
propaganda committees, investigating, encouraging, and spreading
information on the housing question, thrift and saving, cooperation,
and even old-age insurance.
LEGISLATION IN FORCE IN AID OF OWNERSHIP OF SMALL
HOLDINGS.
FACILITIES GRANTED TO PURCHASERS.

It will be recalled that under the act of 1906 the largest ground
area that could be purchased by the indirect aid of State funds
in connection with a detached house was fixed at 10 ares (10,764
square feet). It was-largely to make possible the purchase of a more
extensive ground area, and thereby to encourage the worker of small
means to settle in the suburban districts, that the act of April 10,
1908, was passed, known as the Ribot law on small holdings (petite
propriete) . It has since been twice amended very extensively—
February 26, 1912, and February 11, 1914. This act makes possible
the purchase of as large an area j l s 1 hectare (2.47 acres) in connec­
tion with a single detached house. Furthermore, for the purposes of
the act, and to serve as the intermediaries between the borrower and
the State, real estate loan companies (societes de credit immobilier)
may be organized. They play the same part under this act as do
the building and loan associations under the act of 1906. The State
makes its loans to the real estate loan companies at 2 per cent interest
as compared with 3 per cent to the building and loan associations
under the act of 1906. The reason for this lower rate to real estate
loan companies is explained by the fact that they are compelled to
lend at lower rates to the borrower than are the building and loan
companies; and the State has further protected itself by requiring
the individual borrower of the funds of the real estate loan companies
to take out term life insurance to guarantee the payment of his debt,
whereas this is optional with the company or the borrower who
deals with the building and loan association operating under the act
of 1906.
Inasmuch as the provisions of the act of 1908 are very similar to
those of the act of 1906, the summary which follows will be made
very brief.
INDIVIDUALS ENTITLED TO LOANS.

These are, in general, the same as under the act of 1906, namely,
wage earners, farmers on a small scale (owners or tenants), artisans
or shop owners, and those who either work with members of their
own family or employ not more than one additional employee.



138

B U L L E T IN OF TH E BU REAU OF LABOR STATISTICS.

The maximum size of a field or garden plot, as already stated,
which may be purchased in addition to a single detached house may
not exceed 1 hectare (2.47 acres). The actual rental value of the
house, in such a case, must not exceed the maximum fixed for lowpriced dwellings in that locality;1 the cost of the additional field
or garden plot may not exceed 1,200 francs ($231.60), including the
expenses connected with the loan, such as life insurance and the
drawing of the contract; and, lastly, the purchaser must agree that
he himself or the members of his family will continue to cultivate
the plot as long as it remains in his possession. Fields and garden
plots purchased with loans extended under this act are granted all
the tax exemptions allowed under the law of 1906 except the 12-year
exemption from the land tax.
By the amending act of February 11, 1914, a borrower may secure
a loan for the construction of outbuildings on his property to the
extent of four-fifths of their contemplated value or cost of construc­
tion. This loan, however, is limited to a maximum of 2,000 francs
($386). On the same conditions an owner of a detached house may
secure a loan for the purpose of erecting a shop on his premises.
REAL ESTATE LOAN COMPANIES.

The real estate loan companies, together with certain public and
semipublic bodies, form the link between the State and the individual
borrower, and only through them does the borrower get the use of
the State funds. These companies are constituted as joint stock com­
panies or corporations with limited liability. Their capital, originally
fixed at a minimum of 200,000 francs ($38,600), was changed in 1912 to
100,000 francs ($19,300). To be entitled to receive State funds from
the National Old-Age Retirement Fund the companies must conform
to all conditions required of the building and loan associations under
the act of 1906. (See p. 131.) Thus, they must limit their dividends
to 4 per cent on their actual investment. In return for these limita­
tions they are granted the usual tax exemptions (see p. 131) and are
privileged to have certain public bodies subscribe to their share
capital: (1) The general savings banks, (2) charitable institutions,
and (3) Departments and municipalities.
CONDITIONS GOVERNING LOANS TO INDIVIDUALS.

Each prospective borrower desiring a loan from the real estate
loan company must (1) be able to furnish at least one-fifth of the
purchase price of his holding; (2) he must deposit with the State
insurance institute a single premium on a term policy running for
the period of his mortgage as a guaranty of the payment of the
mortgage in case of death1 before completing payments thereon.
*




1 See table, p. 129.

GOVERNMENT AID TO HOUSING---- FRANCE.

189

And, then, as a final guaranty of his fitness to receive a loan from
the company (3) the borrower must produce a certificate from the
local patronage committee of his district that he fulfills all the con­
ditions requisite for a loan. Furthermore, (4) all his plans and
specifications must be approved by the local health authorities in
order to attest the fact that his house will be sanitary and healthful.
Loans to borrowers under this act must not bear interest in excess
of 3.5 per cent. This, it will be noticed, is lower than is the case
for loans under the act of 1906, in which the rate was fixed at 4 per
cent. This discrimination is probably meant to favor the small cul­
tivator and track gardener and thus induce migration into the
country from the city.
Although it is nowhere stated in the law, but has been left to
practice, loans to individuals run for varying terms of 10, 15, 20,
and 25 years, and are payable in equal annual installments with the
privilege of anticipating payments at any time,
CONDITIONS GOVERNING LOANS TO BUILDING ASSOCIATIONS.

The legal character of these associations, whether joint stock com­
panies or cooperative associations, determines the conditions and
rates of interest at which they may borrow from the real estate loan
companies. The joint stock or noncooperative limited liability com­
panies must pay interest on their loans not in excess of 3 per cent,
while the cooperative associations are required to pay not in excess
of 2.5 per cent. These advances from the real estate companies may
be loaned only to individuals who come within the classes specified
by this act (1908) and that of 1906. An additional favor is granted
the cooperative associations in that they are permitted to loan these
funds, without complying with the other conditions governing ad­
vances to them, to those of their members who have four or more
children under 16 years of age, and to those who contemplate the
construction of a tenement to be rented principally to members of the
association.
TOTAL AMOUNT STATE MAY ADVANCE TO REAL ESTATE LOAN COMPANIES.

The total amount made available from State funds for loans to
these companies is 100,000,000 francs ($19,300,000). The total
amount that any particular real estate loan company may secure in
advances from the State is not limited to a fixed maximum, but is
conditioned on certain financial facts connected with the companies.
Any real estate loan company duly approved and incorporated by
the State is entitled to secure an advance from the State to an amount
equal to (1) one-half the amount of the capital subscribed, but not
paid up, plus (2) an amount equal to the guaranty which each com­
pany is required to deposit to the credit of the State in the Bank



140

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

of Deposits for the proper conduct of its business, usually the amount
of paid-up stock, plus (3) an amount equal to six-tenths of the value
of the property offered as security for its loans; to all of which is
added (4) an amount equal to the mathematical reserve of the
insurance policies taken out on the lives of those shareholders of the
company for whom the company has paid the premiums. This last
condition apparently excludes from the calculation the reserve on
those policies the holders of which have paid their own premiums
in advance at the time they made their loan. The amount that
would be so excluded is probably very insignificant and would
count for little in determining the maximum borrowing capacity of
the company, because, in practice, very few individual borrowers
from the companies actually pay their single premium in advance,
the general practice being to add the amount of it to the face of the
loan and then to liquidate it gradually in the equal annual repay­
ments on loans.
The above factors, which go to determine the maximum advance
that the State makes to any real estate loan company, are, perhaps,
a trifle involved, and are, therefore, illustrated by a hypothetical
case. Let it be assumed that a real estate loan company incorporates
with a capital of $100,000, of which one-fourth, or $25,000, is paid
up, leaving $75,000 not paid up. Let it be further supposed that
one-fifth of the value of the property on which the borrowers make
their loans is $60,000. (Prospective borrowers under the law are
required to put up this proportion of the value of the property
which they contemplate buying.) On the basis of these supposi­
tions the real estate loan company may secure from the State in
advances an amount equal to the following:
One-half capital not paid u p.................................................................... $37, 500
Amount guaranteed by the State (capital paid up)........................
25, 000
Six-tenths of value of property on which loans are made
........................................................................................ A (60,0 00X 5 )= 180,000
Insurance reserve.......................................................................................... 36, 000
Total............ ......................................................................................... * 278, 500

For the purposes of this case the insurance reserve has been calcu­
lated as 15 per cent of the mortgage security which the policies are
supposed to cover. This mortgage security, as required by the law,
is six-tenths of the value of the property which is being purchased
plus the two-tenths which the borrower is required to pay down at
the time of purchase, or a total of eight-tenths of the value of the
property, amounting in this illustration, therefore, to $240,000, 15
per cent of which is $36,000.
It is further provided by the law that, if municipalities and Depart­
ments are willing to guarantee the payment of the annual install­
ments on the loans of these real estate companies to the extent of



GOVERNMENT AID TO HOUSING---- FRANCE.

141

one-tenth of the State advance, then, in calculating the total borrow­
ing power of the company, the mortgage credits owned by it may be
included to the extent of seven-tenths of their value instead of sixtenths. Those companies which can secure this guaranty from a
municipality or Department are then privileged, if they so desire, to
have the amount of their advances doubled.
In negotiating their loans, the companies apply themselves directly
to the Bank of Deposits, which bank is charged with making the
loans, after having the authorization of the supervising commission
created by the act for that purpose and acting under the minister
of labor.
STATE LOANS TO OTHER THAN REAL ESTATE LOAN COMPANIES.

Three other types of associations, in addition to the* real estate
loan companies, may receive loans from the State for the purposes
of this act at the customary reduced rate of 2 per cent. These are:
(1) Cooperative building associations; (2) recognized associations of
public welfare; (3) friendly societies and federations of these.
Cooperative building associations, in order to profit by this privi­
lege to the same extent as real estate loan companies, must (1) show
an investment of 25,000 francs ($4,825) in the particular work con­
templated by the law and (2) must guarantee their repayments
either by the deposit of a bond, making themselves and their mem­
bers jointly and severally liable, or by securing municipal or Depart­
mental guaranty for the payment of these loans. In any case
(3) consent to the receipt of such advances must be had of the
minister of labor, and proof shown that the funds so advanced are
used for the express purposes of the law.
Recognized associations of public welfare (associations reconnus
d'utilite publique) to obtain advances must likewise show (1)
authorization by the minister of labor for the receipt of such funds,
(2) must deposit with the Bank of Deposits a bond of 100,000 francs
($19,300) in State securities or those guaranteed by the State, and
(3) agree to use the money so advanced for the express purposes of
the law. It is further provided (4) that their loans to third parties
may not drawTinterest in excess of 2.25 per cent.
Friendly societies and federations* of these, in order to benefit by
these State advances, must comply with the conditions imposed
on associations of public welfare except in so far as the burden of a
special guarantee bond on their part is somewhat lessened by allowing
them to count as such special bond to the extent of 100,000 francs
($19,300) the liquid funds that they may have deposited on current
account in the Bank of Deposits, provided they continue to yield
4.5 per cent interest. In other words these associations are permitted
to use liquid funds on deposit as the equivalent of real estate security
for covering their loans.



142

BU LLETIN OF THE BUREAU OF LABOR STATISTICS.

ADMINISTRATIVE BODIES.

For the purposes of the act there is created within the ministry
of labor and social welfare a special loan commission charged with
■flu oversight of the loaning of the State funds to the various organi­
ze dons entitled to receive them. The actual business of loaning the
i oiids is charged to the National Old-Age Retirement Fund, from the
funds of which the loans are drawn and charged against the State
treasury. Administrative expenses are also charged to the State
budget by the retirement institute. The members of the loan com­
mission are appointed by the President upon the nomination of the
minister of labor and social welfare; their term of office is five years.
The commission is composed of 16 members, including the minister
of labor who acts as chairman. Its members are two senators,
two deputies, a member of the council of State, a member of the
court of exchequer, two officials of the ministry of finance, the
director-general of the Bank of Deposits, the director of the bureau
of insurance and social welfare in the department of labor and social
welfare, the director of irrigation and agricultural improvement work,
two representatives of the real estate loan companies, and two
members of the superior housing council.

PRACTICAL EFFECT OF LEGISLATION.
Three classes of privately organized societies intermediary between
the borrower and the State exist under the legislation above sum­
marized, namely:
1. Real estate loan associations {societes de credit immobilier) .
2. Cheap dwellings joint stock companies {societes anonymes d’hab­
itations a bon Tnarche); and
3. Cooperative cheap dwellings societies {societes cooperatives d’liab-

itations a bon marche).
The real estate loan companies, which are always stock companies,
as a rule, confine their loans to other associations which build houses
for purchasers. The shareholders in the cooperative societies are
purchasers of houses. In the cooperative societies the annual pay­
ments made by the purchasers vary with the interest on the shares,
while in the first two classes of companies the purchasers of houses
or garden plots pay in fixed installments of equal amount.
BUILDING ASSOCIATIONS.

The effect of the legislation described shows itself in the increasing
number of cheap dwellings associations in France, in their improved
financial position, in the growing amount of tax exemptions, and in
the activity of the institutions authorized to aid cheap dwellings
associations or to erect low-cost dwellings themselves.



143

GOVERNMENT AID TO HOUSING— FRANCE.

As mentioned before, cheap dwellings associations which wish to
share in the special privileges granted by legislation must submit
their by-laws to the minister of labor for sanction. If he, in consulta­
tion with the superior housing council, approves them, the society
may claim the privileges. By April 1, 1913, the number of socie­
ties which had received the required approval was 374. During
the next year 45 new associations were approved, but since some
of the old associations had dissolved and some of the new ones had
not been able to complete their organization within the stipulated
time, the number qualified on March 1, 1914, to claim the benefits
granted by law was 410. They were located in 236 places, 85 of them
being in Paris and 20 others in 17 different places within the De­
partment of the Seine.
There is an increasing tendency for these associations to adopt the
type of by-laws recommended by the minister of labor. Of the 410
approved associations, 256, or 62 per cent, adopted the exact type of
by-laws recommended, while 89, or 22 per cent, had by-laws differ­
ing but slightly from this form. Thus 345, or more than four-fifths of
the approved associations, are governed by rules very nearly uniform.
The following table shows the growth of cheap dwellings associa­
tions since 1894:
N U M B E R A N D P E R C E N T O F E A C H C LASS OF C H E A P D W E L L I N G S A S S O C IA T IO N S , B Y
P E R IO D S . 1894 TO 1914.
[Source: Rapport du conseil superieur des habitations a boil march£.

Number of associations.

Annee 1913.

Paris, 1914.]

Per cent of total associations.

Legal form, of associa­
tion.
1894-1899 1900-1906 1906-1914

Total.

1894-1899 1900-1906 1906-1914

Total.

Cooperative...................
Stock...............................

18
32

107
51

133
69

258
152

36
64

67
33

58
42

63
37

T otal...................

50

158

202

410

100

100

100

100

It will be noticed that the cooperative societies have increased
more rapidly than the noncooperative companies, so that, although
in the first period they formed only a little over one-third of the
total number of associations, in the last period they formed over
three-fifths.
REAL ESTATE LOAN COMPANIES.

The real estate loan associations were authorized by the law of
1908. B y March, 1913, 72 had been formed. These are stock com­
panies which receive from the State, at the rate of 2 per cent interest,
capital which they must employ in making individual mortgage loans
to acquirers of houses, fields, or gardens at an interest rate not exceed­
ing 3.5 per cent, and in making advances to cheap dwellings associa


144

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

tioiis at an interest rate not exceeding 3 per cent. The details con­
cerning a typical society of this kind, the Real Estate Loan Co. of
Havre, are given in a report of the American consul at Havre,
dated April 11, 1913.
REAL ESTATE LOAN CO. OF HAVRE.

The company was organized and approved by the minister of labor
in 1909. It has a capital of 260,000 francs ($50,180) in shares of
100 francs ($19.30) each, of which one-fourth is paid in. Up to April,
1913, it had made 86 loans for building operations to a total amount
of $62,359.
The conditions of admission to the benefits offered by the company
are as follows: (1) The applicant must be of age and sufficiently healthy
to be insured in the National Life Insurance Fund (Caisse nationale
d’assurance en cas de deces); (2) he must furnish references from his
employer; (3) as required by the law, he must possess one-fifth of the
sum necessary for the purchase of the ground or construction of the
house desired (if the loan is desired only for the construction of the
house the value of the ground already acquired is applicable toward
the one-fifth required by the law ); (4) if it is a question of purchasing
a garden plot only, the applicant must be able to cultivate it himself
or have it done by his family; (5) if the house purchased is located in
Havre, the applicant must show that the annual rental value is less
than 325 francs ($62.73) (this is shown by producing the last three rent
receipts); (6) in the ease of a house to be built, the applicant must
produce all necessary documents, such as plans and specifications,
in order to determine the net cost of the house.
The Havre company makes advances for the purchase of a piece of
ground to an amount of four-fifths of a maximum expenditure of 1,200
francs ($231.60) and likewise toward the construction of a dwelling
to a maximum expenditure, including value of the ground occupied,
of 7,000 francs ($1,351) for Havre and 5,400 francs ($1,042.20) for the
suburbs of Havre. As regards the acquirement of a piece of ground,
the borrower must prove that the rent during the year preceding the
application was not over 325 francs ($62.73) for Havre and 250 francs
($48.25) for its suburbs. These advances are made at the rate of 2.75
per cent interest for a period which may run at the option of the
borrower for 10, 15, 20, or 25 years, with the privilege of anticipating
payments in whole or in part at any time.
The mortgage loans are made by means of contracts drawn up
before the notary of the company. Certain fees are also charged in
connection with the loan, as, for instance, architect fees, 60 francs
($11.58), mortgage expenses and stamp duties calculated at about
3| per cent of the total advance made.
In connection with all loans is to be found the peculiar insurance
feature whereby, if a borrower dies at any time during the period he
is making payments, the home goes by attribution (the French term)



145

G O VERNM EN T AID TO H O U SIN G ---- FRA NCE.

to his descendant with a clear title of ownership instead of being
divided among his heirs as under the code.
Of the 86 loans made by the company from 1909 to April, 1913,
4 were to railway employees, 7 to carpenters, 16 to metal workers,
and 19 to day laborers.1
REPORTS OF THE SUPERIOR HOUSING COUNCIL.

Annual reports on the operations of the French housing acts are
made by the superior housing council (conseil superieur des habita­
tions a bon marche) to the President of the Republic. These annual
reports are based on the reports made by the local patronage com­
mittees regarding the operations of the building and loan associations
in their district.
Since the coming into force of the act of 1894 up to March 1, 1914,
there were approved by the minister of labor 410 associations as
entitled to make loans under the act.
STATISTICS OF THE BUILDING ASSOCIATIONS.

The last official analysis of the financial status of building associa­
tions operating under the French housing acts covers their operations
for the year 1912. The analysis includes a survey of the operations
of 296 building associations, 106 being stock companies and 190
cooperative, and of 13 real estate loan companies (act of Apr. 10,
1908), making in all a total of 309 companies; besides these there
were three private foundations engaged in housing work.
The table which follows shows a comparative combined balance
sheet of a certain number of building and loan associations at the
beginning of each of the years 1911, 1912, and 1913.
S T A T E M E N T O F T H E F IN A N C IA L C O N D IT IO N O F B U IL D IN G A N D L O A N A S S O C IA T IO N S ,
A N D R E A L E S T A T E L O A N C O M P A N IE S O P E R A T I N G U N D E R T H E A C TS O F 1906 A N D
1908, A T T H E B E G IN N IN G O F T H E Y E A R S 1911, 1912, A N D 1913.
[Source: Rapport du conseil supdrieur des habitations h bon marche.
1912-1914.]

Annees 1911, 1912,1913.

Paris,

Jan. 1 ,1 9 1 1
(241 companies).
Items.
|
i
Share capital....................................
Balance of loans from public
funds................................................
Value of real estat e........................
Balance of advances outstand­
ing....................................................
Legal reserves..................................
Other reserves............................
Debts— Expenses unnaid............

Cooperative
societies (151).

Stock companies (87).
.....

Real estate loan
companies (3).

Total.

....

$3,368,195. 47

$4,708,417.00

$139,403.90

$8,216,016.37

1,906,135.16
4,590,497.66

2,372,167.25
4,279,147.56

53,825.58

4,332,127. 99
8,869,645.22

492,086. 69
35,059.61
207,215.03
15,594. 98

88,666.13
17,909.05
98,020.26
12,671.61

4,314.71
57.90

1 623,667.53
53,026.56
305,235.29
28,568. 44

301.85

1 The 1913 report of the superior housing council shows that the Central Real Estate Loan Co. made in
that year 201 loans, of which 32 were to mechanics and firemen, 52 to commercial employees, 11 to print­
ers, etc., 16 to carpenters, masons, and gardeners, 8 to tailors, 16 to railroad and transport employees,
7 to furniture workers, and 21 to Government employees.
2 This total is not the correct sum of the items, but is the equivalent of the total shown in the original
report.
66171°— Bull. 158— 15------ 10




146

B U L L E T I N OF TILE BUREA U

OF LABOR STATISTICS.

S T A T E M E N T OF T H E F I N A N C IA L C O N D IT IO N OF B U I L D I N G A N D L O A N A S S O C IA T IO N S ,
A N D R E A L E S T A T E L O A N C O M P A N IE S O P E R A T I N G U N D E R T H E A C T S OF 1900 A N D
1908, A T T H E B E G IN N IN G . OF T H E Y E A R S 1910, 1911, A N D 1912— Concluded.

J a n . 1, 1 9 1 2
(283 companies).
Items.
Stock com­
panies (95).

Total.

$5,848,666.79

$358,265.90

$10,095,244.82

2,041,718.82
5,185,398.94

2,881,323. 44
5,283,176.60

92,215. 40

5,015,257.66
10,468,575.53

49,361.68
263,355.26
17, 771.63

Legal reserves..................................
Other reserves..................................
Debts— Expenses unpaid............

180,516.95
24, 797.61
128,087. 73
18,343.69

166,211.21
213. 84
368.63
491.57

908, 480. 72
74,373.13
391,811.62
36,606. 89

J a n . 1, 1 9 1 3
(309 companies).

i
1
Stock com­
panies (79).

Share capital.................................... :
Balance of loans from public j
funds................................................i
Value of real estate........................ 1
Balance of advances outstand- |
Lesal reserves..................................
Other reserves..................................
Debts— Expenses unpaid............

Real estate loan
companies (7).

$3,8S8,312.14

Share capital....................................
Balance of loans from public
f u n d s ..............................................
Value of real estate........................
Balance of advances outstand-

Items.

Cooperative
societies (181).

Cooperative
societies (129 ).

Real estate loan
companies (2).

Total.

S4,569,210.34

$7,321,836.37

$676,136.90

$12,567,183.61

2,213,527.81
5,987,659. 41

3,645,317.99
6,360,231.04

619,344.33

6,478,190.13
12,347,890.45

52,365.34
375,807.67
21,403. 89

210,402.23
30,439.00
lo4,370. 67
22.412.51

638,191.17
497.94
3,121.58
5,053.71

1,387,457.51
83,302.28
533,299.92
48,870.11

During the year 1912 the capital stock of the different kinds of
associations was increased as follows:
Stock associations......................... ..................................................
Cooperative associations............. .................................................
Real estate loan associations........................................................

$080. 898. 21
1. 473.169. 58
317, 871. 00

Total........................................................................................

2,471,938.79

This increase in the capital of the cheap dwellings associations is
due more to the increased capitalization of some of the older societies
than to the amount added by the formation of new societies. In 1911
two of the noncooperative societies in Paris increased their capital by
600,000 francs ($115,800) and 400,000 francs ($77,200), respectively,
and two cooperative societies located in Nancy and Angers increased
their capital by 600,000 francs ($115,800) and 235,000 francs ($45,355).
It is evident from these tables that the cooperative societies lead in
the housing work. Both their capital and their borrowings from pub­
lic funds exceed those of either of the other classes of associations.
Their capital at the beginning of 1913 formed very nearly three-fifths
(58.3 percent) of the total capital of all three classes of associations,




147

G O VERN M EN T AID TO MOUSIN G---- FRANCE.

and they held 56.3 per cent of the balance of the amount borrowed
from public funds. As between the cooperative and noncooperative
companies, the former are plainly more popular among investors. The
real estate loan companies have grown very rapidly. From January 1,
1912, to January 1, 1913, their capital increased over sevenfold. As
the law authorizing them was passed in 1908, and the table deals only
with results up to the beginning of 1913, these societies had had but
little more than four years in which to establish themselves.
Of 276 cheap dwellings associations included up to 1912, 31 had no
reserve fund at all and 40 had nothing beyond the legal reserve. ’ The
noncooperative societies made a better showing in this respect than
the cooperative, 37 having reserve funds in excess of 10,000 francs
($1,930), while 4 had reserves in excess of 100,000 francs ($19,300).
DIVIDENDS DECLARED.

The financial success of the joint stock or limited liability compa­
nies is to be judged partly by their ability to pay dividends. It is true,
however, that they aim to be partly noncommercial or philanthropic
associations as indicated by the fact that they are willing to limit their
dividends to 4 per cent, as required by the law, in order that they may
receive State advances at reduced rates. The table which follows
shows that dividends have not been uniformly forthcoming and that
the companies have apparently observed their character of being at
least semiphilanthropic. The returns on their capital have been
anything but excessive; in fact, the largest proportion have paid no
dividends.
S T A T E M E N T O F D IV I D E N D S P A ID B Y T H E J O IN T S T O C K B U IL D IN G A N D L O A N A S S O ­
C IA T IO N S O P E R A T IN G U N D E R T H E A C T O F 1906, F O R T H E Y E A R S 1908 TO 1911.
[Source: Rapport du conseil superieur des habitations a bon marche.

Y ear.

4 per cent
but not less
than 3.5.

N o.

1 9 0 8 ....
1 9 0 9 ....
1 9 1 0 ....
1 9 1 1 ....

P e r c t.

6
8. 8
8
10.1
10
11.5
14 i 14.7

3.5 per cent
but not less
than 3.

N o.
4

6
8
8

3 per cent
but not less
than 2.5.

P e r c t.
5. 9

N o.
27

7.6
9.2
8.4

24
25
29
I

P e r c t.

39. 7
30.4
28. 7
30.5

2.5 per cent
but not less
than 2.

N o.
12

9
14
11

P e r c t.

17. 7
11.4
16.1
11.6 ;
I

Annees 1909-1912.

2 per cent
and less.

N o.

11
7
11

Paris, 1910-1913.

Not paying
any divi­
dends.

P e r c t.

N o.
19

P e r c t.
27. 9

13.9
8.1
11.6

21
23
22

26..6
26.4
23.2

Total.

N o.

68
79
87
95

P e r c t.

100
100
100
100

TAX EXEMPTIONS.

The variation in the amount of the fiscal exemptions granted each
year gives some indication of the progress of the movement for pro­
viding low-cost houses. The table following shows the amount so
exempted for 1900 and for each year from 1905 to 1913, inclusive,
as calculated by the minister of finance.




148

B U L L E T IN OF TH E BUREAU OF LABOR STATISTICS.

N A T U R E A N D A M O U N T OF T A X E X E M P T I O N S B Y W H IC H B U IL D IN G A N D L O A N
A S S O C IA T IO N S F O R C H E A P D W E L L I N G S P R O F I T E D IN F R A N C E IN E A C H O F T H E
Y E A R S IN D IC A T E D .
[Source: Rapport du consoil superieur des habitations a bon marche. Annees 1900-1913. Paris, 1901-1914.]

Y ear.

i Door and
Land tax. i window
tax.

1900..
1905..
1906..
1907..
1903..
1909..
1910..
1911..
1912..
19134-

026.55
099.16
055.00
654.85
921.66
142.07
563.88
292.49
975.02
587.99

675.86
829.41
677.84
228.51
027.34
451.38
781.16
907.47
972.48
041.18

Inheri i-

$198.
2. 763.
2,676.
2,645.
3,692.
4,310.
8, 764.
12,125.
16,144.
28,570,

Licenses.

$239.40
462.24
643.27
2,413.59
2,508. 69
2, 771.03
4,036.65
3,907. 70
4,083. 47
6.579.14

Tax on
Stamp and ; income of
registra- | securities,
t ion dues, j negotiable
i paper, etc.

$38. 12
984. 77
559. 34
21,261.55
2 888. 97
2 2,211.85
2 2, 165. 98
2,615.08
4, 314. 58
0,569. 41

$190.09
817. 79
1,583.58
(3)

(8)

(*)

e
o
(a)

(3
)

(*)

• Per cent of
j increase
i over pre­
ceding year

80

I.

45
21
02
16
90
88
36
59
61

1
:
;

!
I
j
!
!
'

354.7
18.1
14.7
14.9
37.4
28.2
22.1
33. 7
34.6

1 Increase for 5 years.
2 Does not include exemptions granted under the act of 1894 but disallowed under the act of 1905.
3 The act of 1906 (sec. 11) abolished this tax entirely in the case of these cheap dwellings societies. No
calculations are available to show the amount of it, but estimates for 1907-1910 place it at 130,000 francs
($25,090), or an average of 32,500 francs ($8,272.50) per year.
4 Bulletin du Ministere du travail et dc la prevovance sociale. Paris, 1914. Vol. 21, N o. 8-9, p. 547.

The variation of the total is perhaps shown more plainly by the
following summary:
P E R C E N T B Y W H IC H T A X E X E M P T I O N S OF S P E C IF IE D Y E A R E X C E E D E D T H O S E OF
P R E C E D IN G Y E A R .

Per cent
increase.

1 9 0 1 ....
1 9 0 2 ....
1 9 0 3 ....
1 9 0 4 ....
1 9 0 5 ....
1 9 0 6 ....
1 9 0 7 ....

23.3
.3
27.1
132.2
24. 7
18.1
14.7

j Per cent
: increase.

j 1908...................................................................................... 14.9
ij 1909...................................................................................... 37.4
1910...................................................................................... 28.2
j
1 1911...................................................................................... 22.1
1
| 1912...................................................................................... 33.7
!
; 1913-....................................................................... ............ 34.6
i

The remission of the land tax and of the door and window tax is
granted to the owner of a cheap dwelling conforming to certain speci­
fications, so the increased amount of these two exemptions is directly
related to the increase in the number of such houses. The remission
of stamp and registration fees is granted to cheap dwellings associa­
tions. The increase in this item, therefore, indicates the growing
number of such organizations.
The number of individual houses for which exemptions were granted
in 1911 was 8,695; in 1912 the number increased to 11,845 and in 1913
to 16,807.1 In 1911 among the houses exempted were 892 tenement
houses, containing 5,657 apartments, or an average of 6.3 apart­
ments per house. The following year there were 1,297 tenement
houses, containing 9,453 separate dwellings, or an average of 7.3 per
house, and in 1913 there were 1,613 with 11,848 apartments or 7.3
per house. In 1910 the average number of apartments in each tene­
1 Rapport du conseil superieur des habitations a bon marche.
1912, p. 15.




Paris, 1912, 1913.

Anuee 1911, p. 15;

G O VERNM EN T AID TO H O U SIN G — FRA NCE.

149

ment was 7.8 as compared witli 10.3 and 11 in 1909 and 1908, respec­
tively. Thus, so far as m aybe judged by the progress of six years,
there is a tendency away from the large tenement and the conse­
quent massing of families together. Nor can it be said that there
is any excessive crowding where 11 is the maximum number of
dwellings in a single tenement.
Though comparable figures are not available, it is fairly safe to
say that individual detached houses are increasing in number in
France relatively more rapidly than are tenements1 due to the favor­
ing influence of the housing legislation discussed in these pages.
LOANS AND OTHER HOUSING ACTIVITIES OF PUBLIC BODIES.3

Under the French housing acts four groups of institutions are
allowed to lend their funds to cheap dwellings associations or to erect
workingmen’s dwellings themselves: (1) The savings banks, which
are semipublic institutions; (2) the Bank of Deposits, which is under
State management and guarantee and receives deposits of Govern­
ment money; (3) charitable institutions, almshouses, and hospitals;
and (4) municipalities and Departments. This authorization was
given as early as 1894, but for a long time it was little used. The
passage of the law of 1906 gave an impetus to the whole housing
movement, which is reflected in the activities of these bodies. In
the following pages a summary is given of the work of each group
of institutions. Desirable as it may seem to be able to segregate
State funds from private funds involved in the operations of these
bodies, it is impracticable to do so. All the funds, however, of the
charitable bodies, the municipalities, and the Departments contrib­
uted for housing purposes are public money.
SAYINGS BANKS.

These institutions are authorized to buy or build workingmen’s
houses and manage them themselves, to make loans to cheap dwellings
associations and to invest in the stock and bonds of such associations.
It should be said here, however, that only an insignificant amount of
public funds enter into these investments of the savings banks, consist­
ing mainly of municipal subsidies for paying the expenses of these
institutions. Their so-called individual assets (fortune 'personelle) ,
consisting of their capital and surplus as well as gifts and legacies
contributed by philanthropists, may be partly invested in various
forms of housing work. In 1913 there were 171 banks making
housing loans as compared with 146 in 1912.
The table which follows shows the total amount these banks
invested in housing work in 1900, and from 1905 to 1913, inclu­
sive, as well as the rate of increase over the period indicated.
1 Rapport du conseil superieur des habitations a bon marelie. AnnSe 3912. Paris, 1913, pp. 15, 16.
2 Rapport du conseil superieur des habitations a bon marche. Annees 1900-1912. Paris, 1901-1913.




150

B U L L E T I N OF TH E BUKEAU OF LAB OK STATISTICS,

O U T S T A N D IN G L O A N S A N D IN V E S T M E N T S , A T TTIE C LO SE OE E A C H S P E C IF IE D Y E A R ,
OF T H E F R E N C H S A V IN G S B A N K S M A D E F O R T II E E R E C T IO N OF C H E A P D W E L L I N G S
U N D E R AC TS OF 1X95, 1906, A N D 1908.
[Source: Rapport du conscil superieur des habitations a bon marche.

Y ear.

1900
1905
1906
1907
1908

Outstanding
loans and
investments.

! Per cent
i of increase
: over pre| ceding
I year.

$438, 728.57 |
.
809,004.38
970,568. 26
1,179,506.07 I
1,474,532.82 j
1 Increase for 5 years.

i 84.4
20.0
21.5
25.0

Annee, 1900-1913.

Paris, 1901-1914.]

Outstanding
loans and
investments.

Year.

1909..................................
1910..................................
1911..................................
1912..................................
1913...................................

SI, 772,723.05
2,099,730.06
2,422,699.30
2,377,924.11
2,833,715.08

Per cent
of increase
over pre­
ceding
year.
20.2
18.4
15.4
* 1.8
19.2

2 Decrease.

This shows a very great increase in the amount devoted to housing
interests, yet it is declared that the savings banks have by no means
accomplished what might have been expected from them under the
lawr. They may legally invest in such interests their income and onefifth of their capital. No recent figures are at hand, but at the end of
December, 1910, the capital of the savings banks in France amounted
to 101,145,295.52 francs 1 ($19,521,042), while according to the table
just given their housing investments during the year reached the sum
of 10,879,430.34 francs ($2,099,730), or only a little over one-tenth of
what they might have invested from their capital alone. The attitude
of the banks toward these investments differs widely. In 1910 over
one-fourth of the banks to which these facts relate (32 out of 121)
did no housing work at all,3 while others exhausted the amount
they were permitted by law to use in this way.
Some of these savings banks had a varied field of activity. The sav­
ings bank of Lyon,3 for instance, helped to form one of the very early
cheap dwellings associations by subscribing in 1886 for stock to the
value of 50,000 francs ($9,650). Later it increased this subscription
to 1,000,000 francs ($193,000). By 1912 it had loaned 140,000 francs
($27,020) to one cheap dwellings association, 190,000 francs ($36,670)
to another, and helped to form a real estate loan company by subscrib­
ing 100,000 francs ($19,300), which was half the necessary capital.
It had also built 24 workingmen’s houses, containing 56 tenements,
at a cost of 461,465 francs ($89,063), and had made mortgage loans
amounting to 190,600 francs ($36,786) to individual workers who had
secured their land and wished to put up houses. In 1910 the capital
of this bank was 4,965,807.82 francs ($958,401). The total amount
it had put into housing work by April, 1912, was 2,082,065 francs
($401,839).
1 Rapport fait au norn de la commission d ’assurance et de pivvoyance sociales sur le projet et les proposi­
tions de loi concernant les habitations a bon marche, par M. L . Bonnevay, depute, Paris, 1912. (No1847, Chambre des deputes, 10° legislature, session de 1912. Annexe au proces-verbal de la 2e seance dll
29 mars 1912), p. 36 et seq.
2 Idem , pp. 41-46.
3 Idem, pp. 41-43.




151

G O VERN M EN T AID TO H O U S IN G ---- FR ANCE.

Tlic savings bank of the arrondisscmont of Compiegne, on the other
hand, refuses to make loans and devotes itself to building. Up to
1912 it had put up houses as follows:1
1901, 29 dwellings, which cost................................................................ $35, 094
1904, 32 dwellings, which cost................................................................ 44, 432
1905-1910,39 dwellings, which cost....................................................
57,093
Total, 100 dwellings, which cost...............................................

136, 6L9

It is the intention of the bank that those who rent these houses
shall become their owners. The monthly payments amount annually
to 5.7 per cent of the principal, 3 per cent going to pay off the principal,
and 2.7 per cent going to the bank as rent. The dwellings are in great
demand.
The banks in general seem much more disposed to build themselves
or to lend to prospective builders than to put their money into the
stocks or bonds of cheap dwellings companies. The following table
shows how their housing investments for 1913 were divided:
LOANS M ADE

BY

SA V IN G S B A N K S F O R C H E A P D W E L L I N G S , ETC.

[Source: Rapport du conscil superieur des habitations a bon rnarche.

Items.

Dwellings.

Purchase or construction
..............................................................
Mortgage loans to companies..............................................................
Loans to companies................................................................................
Stock purchased.................................................................................... i
Individual mortgage loans ................................................................
Total.................................................. ..............................................

Anm'e 1913.

Paris, 1914.]

Public baths.

$1,461,378
424,062
216,842
474,332
257,101

$585,735

2,833,715

590,307

Working­
m en’s
gardens.

$52,949
4, 246

4,632

57,105

It appears that of the total investment of $3,481,277 only 32 per
cent was invested in or through cheap dwellings associations, some­
thing over 7 per cent was in loans to individuals, while 60 per cent
Was invested directly by the banks themselves in dwellings, public
baths, and gardens.
BANK OF DEPOSITS.

This bank, which is under State management and guaranty and
receives deposits of the national insurance institutions and various
other bodies of a public or semipublic character, began making loans
to building associations engaged in the construction of cheap dwell­
ings for workmen in 1896. In 1899 it granted loans for that purpose
to an amount of 490,000 francs ($94,570), while in the following year
it granted only 53,000 francs ($10,229).
1 Rapport fait an nom de la commission d’ assurance et de prevoyance sociales sur le projet et- les
propositions de loi concernant les habitations k bon marche, par M. L. Bonnevay, depute. Paris, 1912.
(No. 1847, Chambre des deputes, lO legislature, session de 1912. Annexe au proces-verbal de la 2a
seance du 29 mars 1912), pp. 43,44.




152

B U L L E T IN OF TH E BUREAU OF LABOR STATISTICS.

The amount of the operations carried out in 1913 was 3,592.000
francs ($093,250), which amount brought the total loans granted by
the bank from the time it began operating under the housing acts
to 28,511,100 francs ($5,502,642.30). Of the total for 1912, 4,999,900
francs ($964,980.70), or 20.1 per cent, had been advanced to the loan
companies, and the balance, 19,919,200 francs ($3,844,405.60), or 79.9
percent, was divided among 381 loans made directly to the building
and loan associations.1 The cooperative associations are apparently
the most active in the housing work, for of 381 loans in 1912 they
held 320 having a-face value of 14,423,900 francs ($2,783,812.70). It
should be noted that the face value of the loans granted docs not
necessarily show the actual amount loaned by the bank, because
some advances applied for may not be fully taken advantage of by the
borrower. Thus, on December 31, 1911, the latest date for which
the figures are available, there was shown as actually loaned 18,701,200
francs ($3,609,331.60) out of a total granted in loans of 22,139,000
francs ($4,272,827).2 Of the former sum there remained to be
repaid 16,143,550 francs ($3,115,705.15); that is, 2,557,650 francs
($493,626.45), or 13.7 per cent, had been repaid.
The table which follows is presented to show the amount of the
loans granted by the bank in the years indicated and the rate of
increase over each preceding period.
A M O U N T OF L O A N S A L L O W E D E A C H S P E C IF IE D Y E A R F O R C H E A P D W E L L I N G S B Y
T H E B A N K O F D E P O S IT S U N D E R T H E H O U S IN G A C T S OF 1891 A N D 1906.
[Source: Rapport du conseil superieur des habitations a bon marche.

Amount
granted in
loans.

Year

$109,045.00
166,173. 00
395,457.00
496,859. 20
504,482. 70

1901
1905
1906.
1907.
1908.

Per cent of
increase
over pre­
ceding year.

152.4
138.0
25.6
1.5

Annee 1912.

Year.

i 1909.
| 1910.
i 1911.
I 1912.
|19133

Paris, 1913, p. 72.]

Amount
granted
in loans.

Per cent of
increase
over pre­
ceding year.

$607,602.60
657,107.10
758,586.50
536,559.30
693,256.00

20.4
8.1
15.4
229.3
29.2

I

1 Four-year period.
2 Decrease.
- Bulletin du Ministeredu travail et de la prevoyance sociale.

Paris, 1904.

Vol. 21, N o. 8 9 pp. 548,549.

According to the report of the superior housing council for 19133
there were 59 loans granted in 1913, divided as to rate of interest
as follows:
Loans to noncooperative companies—
1 loan, at 3 per cent......................................................................
$5, 790. 00
3 loans, at 3| per cent.................................................................. 166, 269. 50
Total............................................................................................... 172,059.50
1 Rapport du conseil superieur des habitations a bon marche. Annee 1912. Paris, 1913, pp. 20, 21.
2 Rapport fait au nom de la commission d ’assurance et de prevoyance sociales sur le projet et les pro­
positions du loi concernantles habitations a bon marche, par M. L. Bonnevay, depute. Paris, 1912. (No.
1847, Chambre des deputes, 10° legislature, session de 1912. Annexe au proces-verbald la 2e seance du 29
mars 1912), p. 48.
3 Bulletin du Ministere du travail et de la prevoyance sociale. Paris, 1904. Vol. 21, No. 8-9, pp. 548,549.




153

G O VERN M EN T AID TO H O U S IN G ---- FRANCE.

Loans to cooperative associations—
34 loans, at 3 per cent........................................................................ $321,152. 00
19 loans, at
per cent......................................................................
151, 794. 50
1 loan, at 3J per cent..........................................................................
48, 250. 00
Total....................................................................... .............................

521,196. 50

Aggregate loans.........................................................................................

693, 256. 00

NATIONAL OLD-AGE RETIREMENT FUND.

Iii addition to the loans here shown, cheap dwellings associations
have been aided by another State institution, the National Old-Age
Retirement Fund. By the act of April 10, 1908, this fund was
authorized to make loans to real estate loan companies,1 which in turn
should loan the money thus received to individuals desiring to pur­
chase or to build on small land holdings or garden plots. The total
amount thus loaned from this fund since the law became effective
was 9,078,500 francs ($1,752,151), distributed over the period 1909
to 1913 as follows:
L O A N S M A D E B Y T H E N A T IO N A L O L D -A G E R E T IR E M E N T F U N D T O R E A L E S T A T E
L O A N C O M P A N IE S U N D E R T H E ACT OF A P R IL 10,1908.
[Source: Rapport du conseil superieur des habitations a bon marche.

Annee 1912.
Number
of loans.

Year.

Paris, 1913, p. 21.]
Amounts ad­
vanced.

1909
...........................................................................................................................................
1910.................................................................................................................................................
1911 ...............................................................................................................................................
1912
.................................................... ..............................................................................
19131 ............................................... ...........................................................................................

2
4
9
16

$19,300
116,283
389,281
810,600
416,687

T o ta l..................................................................................................................................

31

1,752,151

1 Bulletin du Ministere du travaile et de la prevoyance sociale.

Paris, 1914.

V o l. 21, N o. 8-9.

All these loans were made at 2 per cent interest. The marked
increase in the amount loaned during the last three years suggests the
growing desire of a type of workmen to purchase acre plots in con­
nection with detached houses, which it is the real purpose of the act
of 1908 to encourage.
CHARITABLE INSTITUTIONS.

The law of 1894 authorized public charitable institutions, societies,
hospitals, and asylums to construct dwellings themselves or to make
loans for housing purposes up to one-fifth of their funds. In 1906
the authorization was extended to institutions, granting free medical
aid. Up to 1902 practically no charitable bodies acted under this
part of the law of 1894. From 1902 to 1905, inclusive, three opera­
tions were reported, amounting to only 300,000 francs ($57,900), this
being the total amount loaned by charitable institutions under the
earlier acts.
1 In 1913 there were 72 such companies and from 1908 to Dec. 31, 1913, they had borrowed through the
authorized State commission (p. 142) 22,432,000 francs ($4,329,376).




154

B U L L E T I N OF T H E BUREA U OF LABOR STATISTICS.

The increased interest in housing which led to the passage of the
act of 1906 and which in turn w as augmented by the operations of
this act affected the charitable institutions also, and from 1906 to
1910, inclusive, they spent, either in the construction of working­
men’s dwellings or in loans to building associations or in subscriptions
to their stock, 4,711,746 francs ($909,367). In itself this is not a
large sum, but since it is nearly 16 times as great as the whole amount
previously spent in this way by charitable institutions, it is regarded
as a strong indication of awakened interest.
The administrations of the public charities of several cities them­
selves have undertaken to build houses for workers. Paris is doing
most in this direction. A report accompanying the budget for 1912,
presented in the legislative committees’ report (p. 59) cited on page
150, showed the following sums invested to date and desired for future
projects for increasing the supply of cheap houses:
Summary o f capital devoted to housing purposes up to 1912.
Loans made to societies..........................................................................
Houses already built...............................................................................
Houses in course of construction........................................................
Houses projected......................................................................................

$432,
399,
1, 086,
1, 079,

513
703
011
449

Total................................................................................................. 2, 997, 676

The houses given above as already finished contain 150 apartments
falling within the legal definition of cheap dwellings. About onethird of the apartments have three rooms, the remainder two. The
yearly rental ranges from $62.73 to $86.85 for the two-room dwellings,
and from $82.03 to $106.15 for the three-room dwellings. The net
return on the investment, making no deduction for a sinking fund, is
4.73 per cent. The houses in course of construction contain 517
dwellings and are expected to bring in a yearly profit of from 3 to 4
per cent, after amortization payments have been deducted.
Although the charitable institutions of Paris have done more along
this line than those of any other city, yet during 1912 a number of
institutions elsewhere were engaged in similar activities.1 The
charitable board of Rochc-Derrien in Cotes-du-Nord completed the
construction of six workingmen’s houses at a total cost of 17,699
francs ($3,416).
The administrative committee of the Besan^on almshouse sub­
scribed to 67 shares of 500 francs ($96.50) each of the local real
estate loan company organized to encourage the ownership of small
properties. The charitable board of the same city has also subscribed
to 61 shares of the same institution.
The almshouse of Nancy aided the establishment of the real estate
loan company of the Department of Meurtlie-et-Moselle by subscrib­
ing to 60 shares.
1

Rapport da Conseil superieur des habitations a bon marehe.




Armee 191:2.

Paris, 1913, p. 22.

G O V E E X M E X I AID TO HOUSING----- F E A X C E .

155

The charitable board of Comines was authorized by prefectoral
decree, dated November 19, 1912, to advertise for bids for the con­
struction of 47 workingmen’s houses, by contract, at an estimated
cost of 151,000 francs ($29,143).
The charitable board of Saint-Omer created a fund of 40,990 francs
($7,911) for the building of cheap dwellings.
Lastly, the almshouse at Lyon subscribed to 100 shares of 100
francs ($19.30) each of a cheap dwellings society of Lyon.
DEPARTMENTS AND MUNICIPALITIES.

According to the reports of the superior housing council the Depart­
ments and municipalities have done very little toward forwarding
the WT>rk of improved housing. The act of 1894 permitted them only
to make subsidies to the local patronage committees. The act of
1906 increased their powers, permitting them to make loans to
private societies, to subscribe for their stocks or bonds, to transfer
to them land at one-half its value, and to guarantee for a fixed period
a certain rate of interest on their stocks and bonds. Even under
this law but little has been done. The following gives a resume of
the work of the municipalities and Departments:1
In the Alpes-Maritimes the city of Grasse grants an annual subsidy
of 500 francs ($96.50) to the cheap dwellings association of that city.
The municipal council of Nice granted a subsidy of 5,000 francs
($965).
In Calvados the general council has subscribed to 1,000 shares of
100 francs ($19.30) each, issued by the real estate loan company,
and has guaranteed to the State the payment of the annual install­
ments to the extent of one-tenth of subsequent advances which may
be made by the State to the company.
The city of La Rochelle in Charente-Inferieure has subscribed to
33 shares of 100 francs ($19.30) each of the Rochelle cheap dwellings
association Qe Foyer Rochelais).
The municipality of Rive de Gier in Loire has resolved to cede
to the cheap dwellings association of that city a tract of communal
land of 4,700 square meters (50,591 square feet, or 1.16 acres) under
the provisions of article 6 of the law of 1906.
The city of Orleans in Loiret has guaranteed to a local stock
company engaged in erecting apartments for large families a dividend
on a capital not exceeding 70,000 francs ($13,510), equal to 3 per
cent for a period of 10 years.
The city of Arras in Pas-de-Calais has ceded to a cheap dwellings
stock company a parcel of land containing 4,819 square meters
(51,872 square feet, or 1.19 acres), at a price of 25 francs ($4.83) per
are (0.025 acre).
The city of Lyon in Rhone has sold to a.local stock company a
tract of communal land containing 3,352 square meters (36,081
square feet, or 0.83 acre), appraised at 50 francs ($9.65) per square
meter, at one-half its real value, thus making a sacrifice of 83,800
francs ($16,173). Besides, the city has accepted and put in good
1 Bulletin du Ministere du travail et de la prevoyanee soeiale, August, 1913, pp. 779, 780.




156

BU L L E T I N OF TH E BUREAU OF LABOR STATISTICS.

condition for travel a street connecting the land with that of the
society of workingmen’s small dwellings of Lyon ( Maisonnette oiivriere
lyonnaise). This work represents a cost to the city of 4,500 francs
($869).
The city of Paris has sold to a cheap apartment association a
tract of land situated at Ramey and Flocon Streets, valued at 101,212
francs ($19,534), for a sum of 73,130 francs ($14,114), thus making a
reduction of 28,082 francs ($5,420), or 27.75 per cent.
The city of Bone in Algeria has subscribed to the stock of the
cooperative association of Bone to the extent of 10,000 francs ($1,930)
and granted a subsidy of 5,000 francs ($965) payable in five annual
installments.
The general council of the Department of Constantine has decided
to subscribe to stock of the association ^Patrimoine constantinois”
to an extent of 20,000 francs ($3,860), while Perregaux, in the Prov­
ince of Oran, proposes the cession of land to a cheap dwellings asso­
ciation.
If the recent law of July 13, 1912, meets the expectations of its
sponsors the housing work of the city of Paris will not unlikely take
on a new and enlarged scope. By this act it is proposed by the city
to raise a loan, through the issue of bonds, to the amount of
200,000,000 francs ($38,600,000) to bear interest at the rate of 3.8
per cent and repayable in 75 years beginning with 1915, and the
money so obtained is to be used for the construction, acquisition, or
the rendering sanitary of low-cost dwellings for workmen. Of the
total sum, 50,000,000 francs ($9,650,000) are required to be advanced
to approved building and loan associations. The balance will be
used by the city in the erection of tenements, two-thirds of the capital
value of which must be invested in apartments intended for the use
of so-called large families (4 or more children under 16 years of age).
Thus far no information has come to hand to indicate what has been
the result of this legislation or what actual work lias been done.
LIST OF REFERENCES COxNSULTED.
Bulletin de 1’ Office du travail (Ministere du travail et de la prevoyance sociale).
Tome I - X X I . Annee 1894-1914. Paris.
Conference nationale des societes d ’habitations a bon marche.
6th, Paris, 1912.
Rapports. Paris, 1912.
Recueil de documents sur la prevoyance sociale, reunis par le Ministere du travail
et de la prevoyance sociale (Direction de Tassurance et de la prevoyance sociales).
Habitations a bon marche. Paris, 1903-13. (Nos. 2, 14, 19, 35.)
Rapport du conseil superieur des habitations a bon marche. Annees 1896-1912.
Paris, 1896-1913.
Rapport fait au nom de la commission d'assurance et de prevoyance sociales sur le
projet et les propositions de loi concernant les habitations a bon marche, par M. L.
Bonnevay, depute.
Paris, 1912. (No. 1847, Chambre des deputes, 10e legislature,
session de 1912. Annexe au proces-verbal de la 2e seance du 29 mars 1912.) 511 pp.
This is also published as a private study by M. L. Bonnevay with the title, Habita­
tions a bon marche. Paris, 1912.
Societe francaise des habitations a bon marche. Bulletin trimestriel, annee 1-23.
Paris, 1890-1913.




GERMANY.
INTRODUCTION.

In Germany as a consequence of its relatively tardy urban indus­
trial development the modern housing problem arose later than in
other countries. In Berlin in the third decade of the last century
there was already a scarcity of dwellings, and the first public-welfare
building association was founded as early as 1841. At first, however,
only a very limited circle showed any interest in this problem. The
best proof that at that period the housing question did not exist as a
general problem is to be found in the fact that in 1848 the Frankfort
Parliament discussed all other economic questions but entirely
ignored the housing problem.
The industrial development which set in after 1848 brought the
problem to the fore in Germany. Victor Aime Huber specially recog­
nized its importance and occupied himself with its solution. Around
the end of the fifties and at the beginning of the sixties the housing
problem made itself felt in a larger sphere; in Frankfort on the Main,
for instance, a scarcity of dwellings was caused by the demolition of
old houses which had furnished low-rent dwellings to a great number
of families. A petition addressed in 1859 to the Senate of that city
requested the construction of a large number of low^-rent dwellings
to be built even by the city itself, if that were necessary, and as a
result, a public-welfare building association was founded in Frankfort
on the Main. The existing economic societies next took hold of the
problem, treating it from the viewpoint of the then prevailing Man­
chester doctrine. The National Economic Congress ( VoTkswirtschaftlicher Eongress) discussed the housing problem at its meeting in
Nuremberg in 1865 and in Hamburg in 1867, and issued a treatise on
the subject edited with the cooperation of -the Central Association for
the Welfare of the Working Classes (Zentralverein fu r das WohZ der
arbeitenden Elasseri). The final result of these discussions was merely
the conclusion that the housing problem deals with an entirely natural
process— the result of supply and demand wiiich always tend to equalize
each other: “ If the supply of dwellings is insufficient, more of them are
built; if, on the other hand, the supply is too large, then there occurs a
crisis which removes unsound conditions; if dwellings in the cities are
too expensive, the people stay away from the cities, and otherwise the
problem is merely a technical question. The chief requirements are,
therefore, that all restrictive building regulations should be removed



158

BU L LETIN

OF TH E BUREAU OF LABOR STATISTICS.

and that State and commune should abstain from disturbing inter­
ference. ’ ’ Even then only individuals (especially Faucher) were heard
pointing out that unsound building speculation which leads to the
crowding of people into tenements of many floors is not a natural
cause.1
The erroneousness of these Manchester views was clearly demon­
strated when in Berlin after the war of 1870-71 a great scarcity of
dwellings arose as a consequence of the economic improvement caused
by the promotion of numerous new industrial enterprises. Two
great meetings in Berlin viewed the housing problem from entirely
different standpoints. The first of these, a meeting of the German
trade-unions on September 26, 1871, made the following demands on
the employers: Introduction of shorter hours of labor and longer
rest periods to facilitate living farther from the working place, sub­
vention to building associations through granting loans and furnishing
cheap building lots, or possibly erection of workmen’s dwellings by the
employers themselves. Of the workmen was demanded: Apprecia­
tion of a healthy, decent home as one of their most precious posses­
sions, and creation of building associations for the purpose of acquiring
homes of their own. Of the State and communes was demanded;
Abrogation of those building regulations which render difficult and
more expensive the construction of small houses, and subvention to
building associations and other associations for the erection of
medium-sized and small dwellings through leasing public lands and
granting credit on mortgage security— all demands practically
identical with those made at the present date.
The social democracy assumed an entirely different attitude to­
ward this problem in a public meeting held in Berlin on June 28, 1872.
The meeting adopted a resolution declaring:
All proposals before the meeting for the ostensible remedying of the
scarcity of dwellings are reactionary, as these proposals not only aim
to induce the people of Berlin to petition the Reichstag, although the
latter's reactionary composition is sufficiently well known, but also to
request alms from the present State and from communal authorities
chosen according to the system of three estates. Therefore, the
meeting repudiates all these reactionary proposals which would merely
lead to the opening of new poor men’s hovels (Och-senkopjloJcale) for
the workmen. The meeting, on the other hand, invites all workmen
of Berlin to join the general German association of workmen so that
the labor question and with it, of course, also the housing problem
may be solved by the association by the way of liberty.
In the same year the housing problem was discussed at a meeting
of the so-called “ closet” socialists in Eisenach, at which the Associa­
tion for Social Politics ( Verein fiir Sozialpolitik) was formed. Here
the subject was presented in a report by Engel, and, above all, in a




1 C. I. Fuchs: Zur Wohnungsfruge, Leipzig, 1904.

I

GO VERN M EN T AID TO H O U S IN G ---- G ERM ANY .

159

speech by Adolph Wagner. The views predominating at this meeting
differed radically from those at the National Economic Congress.
The meeting was fully convinced that legal regulation of property was
absolutely indispensable and Adolph Wagner laid special stress upon
measures to be adopted in the policy of taxation. All these meetings
and discussions still failed to crea te a general interest in the housing
problem, and with the advent of the great financial panic ( Krach) in
1873 the scarcity of dwellings disappeared together with the economic
prosperity, and the housing problem as an economic question receded
more and more into the background.
At about this time the problem began to be discussed from two other
points of view, the technical and hygienic. Architects and engineers
took the lead in this, the immediate occasion being an extension of the
fortifications of the city of Mainz. There arose the question “ If a
new town district is opened up, how shall it be built on suitably?”
In 1874, for the first time, the society of architects and engineers dis­
cussed in a coherent manner all questions relating to the enlargement
of cities. A similar discussion took place later on in the Society for
Public Hygiene ( Vereinfur offentliche GesundJieitspflege), which included
among its members physicians, technical experts, and lawyers.
Within the next decade or so, however, a period of industrial
prosperity commenced, and the economic side of the housing problem
came once more to the foreground. The Association for Social
Politics, under the leadership of Mi quel, considered the problem again,
and in 1886 discussed it thoroughly in voluminous publications as well
as at its general meetings. Simultaneously the Society for Public
Hygiene took up the question of sanitary inspection of dwellings.
The questions of building regulation by the authorities, construction
of larger rooms, and compulsory accumulation of real estate by
municipalities became later on subjects of discussion and even of
practical experiments, and the first sporadic attempts at housing
legislation were made in individual Federal States of the Empire.
Finally there arose also the question of financial and legislative aid to
enterprises for the erection of low-rent sanitary dwellings, especially to
cooperative building associations. The Association for Social Politics
made in 1901 a comprehensive investigation of all that had been done
in the last 15 years of the nineteenth century in regard to the housing
problem in Germany as well as in other countries, and published the
results in a work of four volumes At the general meeting of the
society in Munich in the fall of 1901 the housing problem was again
one of the chief topics discussed. With the exception of several new
building regulations enacted by some of the Federal States, there has
been since then very little of importance done in Germany with respect
to the housing problem. The long-expected housing law planned for
Prussia has not yet been enacted and much less the imperial housing



160

B U L L E T IN OF TH E BUREAU OF LABOR STATISTICS.

law (Reichswolinungsgesctz) which for years has been advocated by
the society Reichswohnungsgesetz, now called the German Society for
Housing Reform (.Deutscher Verein fu r Wohnungsreform) . It was
under the auspices of this society that the German housing congresses
in Frankfort on the Main in, 1904 and in Leipzig in 1911 took place.
The “ housing reform on a large scale ” which Miquel demanded as
early as 1886 has not up to date been realized.
SUMMARY OF EFFORTS TO IMPROVE HOUSING.
W O R K OF IM PERIAL AND STATE G OVERNM EN TS.

In Germany the Empire, the Federal States, and the communes give
public aid for the improvement of housing conditions of the working
classes. Direct aid, in so far as given by the Empire and by nearly
all the Federal States, is granted by them only in their capacity as
employers— i. e., only to low-salaried officials and workmen in
Government employment— for the Government of the Empire as well
as a vast majority of the governments of the Federal States takes the
attitude that the improvement of the housing conditions of the general
working population is a matter for the care of employers, publicwelfare associations, and communes, especially of the latter.
The Empire and all the Federal States have for years, whenever
the interests of the service demanded it, built houses or rented them
and assigned apartments in these houses to their employees and
workmen either as free service dwellings, or in place of housing
money, or on payment of rent. The beneficiaries of this form of
Government aid have been especially the employees of the adminis­
trations of railroads, posts and telegraphs, and mines.
The increasing scarcity in Germany of low-rent housing accommo­
dations at the end of the last and the beginning of the present cen­
tury made it imperative for the Imperial and State Governments to
give their housing work a broader scope; i. e., not to confine it entirely
to instances where the interests of the service required the provision
of housing accommodations for Government employees, but to pro­
vide low-rent sanitary dwellings for all low-salaried employees of
the Government in localities where a scarcity of suitable dwellings
prevailed or where such dwellings could be rented only at prices out
of proportion to the salaries of these employees.
The former policy of the governments of building houses them­
selves was not deemed the most expedient for this enlarged scope of
public housing work, and it was decided that the most economical
and efficient method to benefit the largest possible number of
employees would be the granting of building loans from public
funds to building associations composed exclusively of officials and
workmen in the Government service or in which such employees



i

GOVERNM EN T AID TO H O U SIN G ---- GERM ANY .

161

were in the majority. Prussia, in 1895, was the first State to create
a housing fund by legislation; the Empire and several Federal States
followed its example. The means of all these public housing funds
are in the first place used for the granting of building loans to build­
ing associations. Next in importance is the use of these funds to
purchase land for the use of the Government and to grant long­
time leases on this land to building associations or individual employ­
ees. These leases carry with them the disposable and hereditary
right to erect and maintain structures on the land, the so-called
Erbbaurecht.
These are the most important activities of the Government in
connection with the housing problem, but it carries on several others
specially designed to help low-salaried Government officials and
workmen. Among these are the erection of buildings by the Govern­
ment itself in localities where 110 building associations exist or where
private building activity is not sufficient to alleviate the scarcity of
suitable low-rent dwellings; the granting of small building loans to
individual Government employees, and loans on small holdings held
practically in fee, but subject to a low rental (Zwergrentenguter) .
The latter is a new scheme for colonizing Government employees on
rural lands.
I 11 the Grand Duchy of Hesse the State credit bank, a department
of the ministry of finance, has, in addition to other functions, that of
making building loans 011 dwellings for people of small means. This
aid to housing work given by the Grand Duchy of Hesse is not, like that
of the housing funds of the Empire, Prussia, Bavaria, Wurttemberg,
and Saxony, exclusively for the benefit of Government employees
but for the benefit of all people of small means without distinction
as to their employment. This is also the case with respect to the
loans granted by the workmen’s State housing fund and the State
Credit Bank of the Principality of Schwarzburg-Sondershausen.
The Empire in an indirect manner has given aid to housing work
in the interest of the general working classes through its workmen’s
insurance law, which permits the State insurance institutes, the car­
riers of the invalidity and old-age insurance, to invest a large part
of their funds in mortgage loans on dwellings designed for the use of
persons subject to social insurance. These funds of the State insur­
ance institutes are, as a matter of fact, at the present time the chief
source of credit for public-welfare building associations.
Several of the Federal States have by legislative acts created semi­
official credit institutes which are authorized to make building loans
on workmen’s dwellings at a low rate of interest and on favorable re­
funding conditions. Such institutes are the State Agricultural Mort­
gage Bank of Bavaria, the Hessian State Mortgage Bank, the State
00171

B u ll. 15S — 1 5 -------- 1 1




162

B U L L E T IN

OF TILE B UR EAL

OF LAB OB STATISTICS.

Credit Bank in Coburg, and the State Mortgage Credit Bank of
Schwarzburg-Sondersliausen.
The Empire and a number of Federal States have enacted tax laws
to render land speculation more difficult, building laws, communaltax laws, stamp-tax laws, laws for the forced consolidation of parcels
of property, etc., all of which contain provisions which directly or
indirectly benefit public housing work.
WORK OF CITIES.

The communes of Germany in the last two decades have entered
upon a very vigorous housing policy and have been encouraged in
their work bv the State governments.
The methods by which the individual cities have tried to im­
prove the housing conditions of the working classes and to alleviate
the prevailing great scarcity of low-rent sanitary dwellings vary
greatly. Some cities limit their housing work to the provision of
suitable dwellings fox the workmen in their own employment,
while others build houses for the general working population. A
large number of cities grant mortgage loans from communal funds
for the erection of workmen’s dwellings, or guarantee such loans
when granted by third parties. The sale of communal lands at re­
duced prices for building purposes, and grants of exemption or res­
pite from payment or reduction of street construction costs or of
ground and house taxes are other forms of communal aid to housing
work. In addition to the methods enumerated, in recent years two
other forms of communal aid have been adopted, that of granting
hereditary rights of construction (Erbbaure elite) on communal lands,
and the erection of workmen’s dwellings on communal lands and sale
of these dwellings to workmen with reservation by the city of the
right of repurchase.
The Rhenish cities have developed the greatest activity in housing
work. They have built workmen’s dwellings themselves and in addi­
tion have promoted the erection of such dwellings through loans,
guaranty for loans, reduction of street construction costs, etc. Next
should be mentioned the cities of southern Germany. Berlin and the
cities of northern and eastern Germany have done considerably less
in the sphere of public aid to housing work than the cities in the other
parts of the Empire.
WORK OF PUBLIC-WELFARE BUILDING ASSOCIATIONS.

Leaving the building activity of the Empire, States, and com­
munes out of consideration, the public-welfare building associations
(gemeinnutzige Baugenossenschaften) are the chief agencies for housing
work. The rapid development of the building associations falls in the
period after 1890. A large number of building associations created



163

G O VERNM EN T AID TO H O U S IN G ---- GERM ANY .

at the beginning of the seventies did not survive the serious eco­
nomic crisis in the middle of that decade. The number of existing
building associations decreased from 51 in 1875 to 38 in 1890. In
the nineties, however, building associations sprang up in numerous
localities, so that their number rose in 1895 to 124 and in 1900 to 322,
and on January 1, 1911, there existed in Germany 1,167 building asso­
ciations. The essential cause of this rapid expansion is to be found
in the opening of abundant credit to building associations under very
favorable conditions by the Empire, States, and State insurance in­
stitutes. The following table illustrates the development of the Ger­
man building associations in the 11 years, 1901 to 1911, inclusive:
D E V E L O P M E N T OF T H E

G E R M A N B U IL D IN G A S S O C IA T IO N S , 1901 T O 1912.

[Source: Mitteilungen zur deutschen Genossenschaft-sstatistik fiir 1911. Sonderabdruck aus dem X L .
Ergiinzungshefte zur Zeitschrift des Koniglich Preussischen Statistisclien Landesamts. Berlin, 1914,
p. 8. W hen the number of associations reporting a given item differs from that shown in the third
column of the table, the number reporting is given in parentheses.]

N um ­
N um ­
ber
ber
of
of
asso­
asso­
Member­
Year.
cia­
ship.
cia­
tions
tions
reexist­
port­
ing.
ing.

1901..
1902..
1903..

466
498
550

171
173
166

1904..

617

269

91,887

1905..

641

409

115,801

46,978
46,996
50,429

Houses reported each
year as erected since
the existence of the
associations.
Assets.
Number. '

Member s’
shares.

Borrowed
money.

Reserve.

Cost.
|
!

3,449 $13,668,652 $14,650,729 ; $1,893,114
2,977 13,386,047 14,711,574 ! 1,866,456
3,954
16,137,153 17,705,759 I 2,042,795
/
(142)
5,262 31,950,890
4,231,610
\19,082,959
(186)
f
(222)
6,150,105
8,706
\26,604,209 25,437,577

1906..

681

375

132,681

10,495

1907..

747

542

138,093

12,714

1908..

848

572

148,114

11,263

1909..

963*

642

160,941

13,344

1910.. 1,056

739

196,751

(613) 12,540

1911.. 1,167

773

199,001

(645) 14,144

1912.. 1,271

794

199,226

(716) 15,784

53,119,650
f
(395)
\57,197,056
/
(466)
\63,396,617
J (513)
\74,640,122
f
(613)
\89,347,795
f
(645)
\96,562,939
f
(662)
\103,426,023

$247,956
$12,398,370
189,476
12,118,733
220,437
14,751,091
J
(234)
} 18,478,913
\
323,876
f
(286)
} 29,516,873
j\
663,069
if
(298)
/
(U 5)
\29, 291,992 } 6,473,098 !\
776,193 } 48,713,109
(149)
!
(427)
(403)
j 6,390,738 |/ 712,913
23,952,165 !
\
51,327,998
(466)
(187)
1
J (478)
28,559,204 !j 7,014,219 \ 930,172
55,152,979
f
(612)
(305)
|
| 7,809,109
1,332,392
\ 78,568,098
38,653,173 i
(254)
/
(627)
} 9,905,218
1,743,492
41,443,926
\ 86,298,454
(267)
/
(437)
j-10,318,644
1,838,043
42,559,365
\ 42,287,516
(338)
(
(681)
} 9,736,256
2,051,338
54,547,538
\ 101,446,136

At international housing congresses, economic and housing experts
have recently repeatedly expressed the opinion that the above­
described rapid development of German building associations will
soon come to a halt, because the sources of cheap credit opened to
them by the Empire, States, and State insurance institutes, can not
be expected to be so abundant in the future as in the last two
decades. The Empire and the States have already adopted a rule
to make building loans from their housing funds on second mortgages
only, so that the building associations must look to other credit
sources for first-mortgage loans. The State insurance institutes in
1910 raised the rate of interest on mortgage loans to 3J per cent,
and in a few years the condition of their assets will require a general



164:

B U L L E T IN

OF TH E BUREA U OF LABOR STATISTICS.

limitation of their activity as credit institutes. As soon, therefore,
as these special credit sources of building associations become more
or less exhausted, the development of the associations will come to
a standstill, for the difficulty of raising the necessary capital is the
chief obstacle to the formation of building associations. Private
capital is not so easily available for building associations, and above
all is not available under such favorable conditions, as the capital
obtained heretofore from the Empire, the Federal States, and the
insurance institutes.
On account of the marked difference between the American and
English building associations on the one hand and German building
associations on the other hand, it seems necessary to give here the
chief characteristics of the latter. The American and English
building associations, originally savings societies, loan to their mem­
bers the means for the erection of a dwelling and are therefore
essentially mortgage or real estate credit banks. The German
building associations, on the other hand, are actual building associa­
tions for they, themselves, build and either sell or rent the erected
dwellings to their members. They are preferable to foundations,
public-welfare societies, etc., in that the}" have not like these more
or less the character of charitable institutions. The German build­
ing associations are administered by the workmen themselves, who
see to it that the dwellings erected correspond to their needs and
wishes. The}' are assisted, of course, to a considerable extent, in
the administration by persons of the well-to-do and educated classes,
and this cooperation is of the greatest importance.
As beneficial as the activity of German building associations is, its
direct benefits arc limited to its members who are workmen earning
good wages and officials— i. e., persons who have steady employment
and therefore are able to make regular payments. Building asso­
ciations are, therefore, especially adapted for employees of the State
transportation institutes. In order that they may pay a sufficient
dividend to those of their members to whom housing accommoda­
tions are not assigned, they can not provide dwellings much cheaper
than those erected by private building activity, but they furnish
better dwellings. As a rule, however, they obligate themselves not
to increase the rents paid by their members as long as the latter
comply with their contractual obligations. They also rent dwellings
to members with numerous children who otherwise would have great
difficulty in securing housing accommodations in privately owned
houses. For the great masses of the socially and economically less
favorably situated working population, and above all for the un­
skilled workers, with respect to whom the housing problem is most
pressing, building associations are not adapted. They benefit these




G O VERNMEN T AID TO H O U S IN G ---- GERM ANY.

165

classes only in so far as they act as price regulators, which they often
do even before they begin building operations, through the mere
possibility of competition for the private building activity.
The entire results of the public-welfare building activity in general
and of the building associations individually are very insignificant in
comparison to the existing great scarcity of sanitary low-rent dwell­
ings. These modest quantitative results are, however, accompanied,
especially in the case of cooperative building associations, by great
qualitative and ideal results. To quote from Rudolf Albrecht: “ In
addition to their social, ethical, and economic importance, the build­
ing associations have also created a new technical, economic, and
artistic standard for the entire private building industry of Germany
and in this manner contributed to the improvement of housing con­
ditions. The public-welfare and cooperative building associations
are pioneers which now collect the experiences on the basis of which
a housing reform on a larger scale may later on be built up. They
stimulate building activity through their example and make the
masses of the working population, who, during their long housing
misery have lost all standard of a sanitary cozy home, again conscious
of their needs.”
CAUSES OF PRESENT H OU SING CO NDITIONS.

Originally the German building associations built mainly family
houses for sale to their members, but in recent years this form of
their activity has been more and more supplemented by the erection
of large tenements, the apartments of which are rented to members.
There are three reasons why German building associations find it
more expedient to build tenements than family houses, differing
therein from English and American associations: (1) Different meth­
ods in the building up of cities; (2) different housing customs; and
(3) different building regulations.1
England and America have a decentralized system of city develop­
ment; Germany, a centralized system. The English or American
workman goes out into the open country and builds his home there;
others follow him, and in this way spring up small groups of unpre­
tentious but neat looking homes of a semirural character. The Ger­
man, on the other hand, in his home colonization always builds in
an already existing settlement, as is shown by the fact that the sub­
urbs of nearly all large German cities were formerly villages, which
in tune lost their rural character and became suburbs and as
such wr
ere frequently incorporated into the cities. A decentralized
system of city development is, moreover, conditioned on a highly
developed traction system and low fares. Without it suburbs at a
great distance from the center of the city, as they exist in England
1 Poiile, Prof. Dr. L : Die Wohnungsfrage, vol. 1, p.




45

1L Leipzig, 1910.

166

B U L L E T I N OF T H E BUREAU OF LABOR STATISTICS.

and America, would be ail impossibility. Of the electric-car lines in
the United States, it has been rightly said that they are the chief
factor in the rapid enlargement of the cities, just as the railroads
were in the opening of the continent. In Germany, however; street­
car lines to a suburb are built only after the suburb has been
sufficiently settled to insure a paying traffic.
The greater decentralization of the English and American urban
population and the greater number of building sites among which
they may choose are responsible for the predominance of the family
house in England and America. As a consequence of this decentral­
ization, there is always an abundant offer of building lands, and the
prices prevailing for such lands arc much lower than in countries
with a centralized building system. Low-priced building lands en­
courage, moreover, the erection of one or two storied houses on large
lots. In Germany, where the development of most cities consists
in new rings of houses being added year after year to the circumfer­
ence of the city in the same manner as a tree forms annual rings,
building lands are offered for sale only in the immediate outskirts of
the city. These lands are very high-priced and consequently invite
intensive exploitation of the ground—i. e., the erection of tall houses
on relatively small building sites.
The second reason for the predominance in Germany of the tene­
ment over the family house is to be found in the German housing
customs. English and American workmen do not object to living
outside of the city in which they are employed. On the contrary,
living in the open country and in small settlements has a great charm
for them, as they are naturally inclined to outdoor life. The average
German, on the other hand, loves above all, as many observers have
established, to be among people; he is actually afraid of solitude and
feels happy only when he is in a crowd. The gregarious proclivities
of man are much more strongly developed in the German than in the
Englishman and American. Every German real estate dealer can
tell how hard it is to rent apartments in isolated buildings.
The housing system of German cities would undergo a radical
change if the Germans in large numbers could make up their minds to
live farther away from the central part of the city. The German city
dweller then, of course, would have to be willing to travel a longer
distance to and from work than he does at present. A street-car ride
of half an hour from his home to his working place is now considered
by him a great inconvenience, and only in rare instances may he be
induced to exceed this limit. The average Englishman or American,
on the other hand, does not consider it any hardship at all to ride 011
trolley lines or suburban trains an hour or even longer 011 his way to
and from work. The different arrangement of the hours of labor
and different times for meals make it, of course, easier for them than



G O VERN M EN T AID TO H O U SIN G ---- G ERM AN Y .

167

for the German to live at a greater distance from their working place,
as they make the journey home only once a day, while the German
who takes his principal meal at noon makes it, as a rule, twice a day.
In addition to the difference in the system of city development and
in the national housing customs which play such an important part
in the predominance of family houses in England and America and
of tenements in Germany, there is also a difference in building regu­
lations which explains to a large extent this predominance. In Ger­
many the State and the communes think it right, in the interest of
the health of the urban population as well as in the interest of an
orderly and well-regulated aspect of the cities, to make very strict
regulations when new houses are built as to material, thickness of walls,
height of rooms, street construction, etc., which must be strictly
observed, and deviations from which are not permitted even to facili­
tate the erection of workmen’s dwellings. These uniform building
regulations, the observance of which is strictly enforced by the
building inspectors, naturally favor the erection of large tenements
and make difficult, if not impossible, that of small one-family houses.
The more city real estate has increased in value the more apparent
it has become that if the building regulations are to be observed only
tenements of at least four to six stories can be built with profit and
that it does not pay to put up one and two family houses for the needs
of people of small means. The small-family dwellings which are
encountered in such large numbers in England and America, especially
as workmen’s dwellings, in many instances would not pass inspec­
tion in Germany, or building permits could not be obtained for their
erection.
Of these building regulations there is above all to be mentioned
the Prussian law of July 2, 1875, according to which the communes
are authorized to prohibit the erection of dwellings on streets which
have not been entirely completed, i. e., paved, sewers installed, etc.
Similar provisions are in force in other German States, as, for instance,
in Saxon}?*. They form one of the greatest obstacles in the way of
an extensive construction of small one-family houses after the
Anglo-American pattern.
The tendency toward uniformity, and the severity of the German
building authorities, although preventing a more extensive erection of
the small-family house, have in other respects exerted a highly benefi­
cial influence, for the fact that “ slums,” as they exist in all other metro­
politan cities of Europe and America, are nowhere to be found in
large German cities, not even in Berlin, is entirely due to the greater
paternalism of the German authorities.
To sum up: That home which would be within the means of the
German workman and low-salaried employee— i. e., a small frame
cottage— he may not build within the limits of large cities, as the regu


168

BULLETIN

OF

TH E BUREAU OF LAB0K STATISTICS.

la lions do not permit it. To build such a house he would have to go
outside the city limits, and this is not often done, on account of the
disinclination of the German to live very far from his working place.
On the other hand, a family house within the city limits which
corresponds to the building regulations is far beyond his means, be­
cause the value of the land and the costs of construction are too high.
These explanatory remarks will contribute to a better understand­
ing of the following detailed account of the aid given to housing work
by the Empire, the Federal States, and the communes.
ACTIVITIES OF THE IMPERIAL GOVERNMENT.

The German Empire as an employer has for a number of years
endeavored to contribute to the improvement of the housing con­
ditions of its workmen and low-salaried officials. These efforts take
a twofold form: On the one hand, the different administrative
departments of the Empire build houses 011 their own account or
rent them and give the apartments in these houses over to the use
of their employees either as free service dwellings or on payment of
rent; on the other hand, the erection of suitable small dwellings for
workmen and low-salaried officials is promot ed by the granting of loans
by the Empire to public-welfare building associations. Up to 1901 the
activity of the Government was limited to the first-named form, but
the latter method of improving the housing conditions has since come
to the fore. The departments now build or rent only when such action
is required by the conditions of a given service or when an existing
scarcity of dwellings can not be properly removed by subvention of
building associations. The funds necessary for tins activity are appro­
priated by the Reichstag in the annual general budget, a separate pro­
vision being made for each of the Government departments engaged in
such activity. In addition, the Reichstag appropriates each year
in the budget a specified sum which is put at the disposition of the
imperial department of the interior (.Beichsamt des Innern), under
the name Wohnungsftirsorgefonds, to be expended for the general
betterment of housing conditions of imperial employees and workmen
without consideration of service interests.
On request of the Reichstag the imperial department of the inte­
rior prepared a memorandum (.Dcnhschrift) as to the activity of the
Empire and the Federal States with respect to the betterment of
housing conditions, and submitted it on June 10, 1904, to the Reich­
stag. A statement of the disposition made of the housing fund
was submitted by the imperial chancellor to the Reichstag on Feb­
ruary 3, 1909. The data given in the following pages are based on
this memorandum and statement and on special reports for the
sop arat o ad ministrations.




169

GOVERNM EN T AID TO H O U SIN G ---- G ERM ANY .
H OU SING W O R K

OF IMPERIAL AD M IN ISTRATIVE
TH EIR EM PLOYEES.

AUTHORITIES FOR

IM P E R IA L P O S T O FFICE A N D T E LE G R A P H D E P A R T M E N T .

Means to provide dwellings for low-salaried officials in localities in
which a considerable scarcity of dwellings exists, especially in rural
localities and at lonely railroad stations, have been annually appro­
priated in the budget of the post office and telegraph department
since the fiscal year 1897-98.1 Of the means appropriated in this
manner the department has up to the end of the year 1911 expended
0,1.97,100 marks ($2,188,909.80) to improve the housing conditions
of its employees. Of this amount there were used 8,083,000 marks
($1,923,754) for the purchase, and 1,114,000 marks ($265,132) for
the renting, of dwellings. The department has purchased 653 houses
with 1,781 apartments for families and 179 rooms for single persons,
and rented 245 houses with 638 apartments for families and 79
rooms for single persons. This work has been carried on in more than
800 localities. The houses are mostly situated in the eastern Prov­
inces, and correspond in size and equipment to the requirements
generally made of sanitary dwellings for low-salaried officials. In
all rural districts a piece of arable land belongs to each house. In
the case of statutory officials who are married, apartments are as
a rule assigned to them free of charge as service dwellings. In all
other instances the department charges its employee's the usual local
rents.
In fixing the rentals which officials have' to pay for apartments in
houses owned by the Imperial Government or rented by it, the
rents which officials of equal rank pay for their apartments to private
parties in the same locality are generally taken as a basis. If the
local rents are unusually high, then the Government makes an appro­
priate reduction in the rents charged by it. In fixing rents the
Government does not attach special importance to the question of
whether its own costs are covered by the rents or not.
IM P E R IA L N AV Y D E P A R T M E N T .

The memorandum of 1904 of the department of the interior states
that the navy department has up to that year provided apartments
for low-salaried employees and workmen in the following manner:
N U M B E R A N D V A L U E OF A P A R T M E N T S P R O V ID E D FO R E M P L O Y E E S A N D W O R K ­
M EN B Y IM P E R IA L N A V Y D E P A R T M E N T .
! Number
of apart­
ments.
For low-salaried officials—
In service dwellings.............................. ............
In specially; erected buildings.......................
For workmen, in specially erected buildings..
Total.

Value or cost
of apart­
ments.

s
1
!
!

58
183
938

$91,713.30
356,823.88
939,657.32

1,179

21,340,594.50

1 Jahrbuch der Wohnungsrefcrm 1012. Vol. 7, p. 28, Gottingen, 1913.
2 This total is not the correct sum of the items. The figures are given as shown in the original report.




The rentals are fixed in such a manner as to bring a moderate
return of interest on the capital invested in the dwellings.
A D M IN IS T R A T IO N O F IM P E R IA L R A IL R O A D S.

The following extract from the memorandum of 1904 shows the
number of existing apartments for low-salaried officials and work­
men provided by the above administration in service dwellings, in
specially erected dwellings, and in rented buildings:
N U M B E R A N D COST O F A P A R T M E N T S A V A I L A B L E A S S E R V IC E D W E L L I N G S O R F O R
R E N T A L TO O F F IC IA L S A N D W O R K M E N O F T H E A D M I N I S T R A T IO N OF IM P E R I A L
R A I L R O A D S A T T H E E N D O F T H E F IS C A L Y E A R 1902.
[Source: Die Wohnungsfiirsorge im Reiche und in den Bundesstaaten.
"Reichsamte des Innern. Berlin, 1904, p. 7.]

Apartments within German territory—

Assigned to
officials as
service dwell­
ings.

Rented to
officials.

Rented to
workmen.

Denkschrift

bearbeitet im

Apartments outside of Ger­
man territory (in Switzer­
land and Luxem burg)—

Assigned to
officials as
service dwell­
ings.

Rented to
officials.

1
N um ­
ber.

| Cost of
con­
struc­
tion.

Cost of
Cost of
Cost of
Cost of
N um ­ con­ N um ­ con­
N um ­ con­
N um ­ con­
ber.
struc­
ber.
ber.
ber.
struc­
struc­
struct
tion.
tion.
tion.
tion.

Apartments located in serv­
511 $900,116
ice buildings...........................j
Apartments in dwellings
specially erected................... j 1,130 2,123,674
i(
>
Rented apartments.................I

245 $380,9SS
15

78 $80,682

149 251,804
13

8 $14,042

T otal................................. ' 1,647 3,023,790

250 386,988

78

207 327,964

8

55 $76,160

80,682

14,042

i The annual rent paid by the administration for the 14 apartments rented by it amounted to 5,650 marks
(SI,344.70).

According to the above table, at the end of the fiscal year 1902
the administration of the imperial railroads had 2,190 apartments
available for officials and workmen. For the construction of
2,176 of these apartments it had expended 16,107,000 marks
($3,833,466) and for the remaining 14 it paid an annual rent of 5,650
marks ($1,344.70). The great majority of the apartments were in
German territory, but 215 were in Switzerland and Luxemburg.
Appropriations made for the housing work of the administration of
railroads for the years 1901, 1902, and 1903, amounting to 998,500
marks ($237,643), provided in addition for 25 apartments to be
assigned to officials as service dwellings and for 76 apartments,
partly in process of construction, to be rented to them. Data as
to the housing activity of the administration of imperial railroads
in more recent years are not available. The rents charged by the
administration in Government-owned buildings are as a rule com­
puted so as to bring an interest of 3 per cent on the value of the
ground and of 4 per cent on the value of the building (inclusive of



GO VERN M EN T AID TO H O U SIN G ---- GERM ANY .

171

1 per cent for maintenance and refund). The rents must, however,
always correspond to the incomes of the employees and workmen to
whom the apartments are let and not be higher than the usual local
rentals. In all other buildings the administration charges the usual
local rents.
ADMINISTRATION OF THE EMPEROR WILLIAM CANAL.

The memorandum of 1904 of the imperial chancellor shows that
the administration of the Emperor William Canal had available for
assignment to officials of the intermediate and lowest salary grades
4 apartments in service dwellings specially erected for housing pur­
poses by the administration and for workmen 52 apartments in
specially erected dwellings. Altogether the administration had
available 163 apartments, of which 105 were assigned to employees
as free service dwellings and 58 were rented to them. The total
cost of these apartments was 1,769,900 marks ($421,236.20).
The rent charged for apartments along the canal, which were mostly
rented to workmen, varied from 60 to 72 marks ($14.28 to $17.14)
per year. The apartments located in the former barracks, which
w ere erected in Holtenau while the canal was in process of construc­
T
tion, are rented to officials of the lowest salary grades and to work­
men at a rental varying between 84 and 108 marks ($19.99 and
$25.70). Rents are fixed according to the size of the apartment and
with due consideration of the income of the renter and the usual local
rents.
In addition to these 163 apartments the administration has also
constructed 15 service dwellings for custom officials on duty at the
canal, for which the administration of customs pays to the adminis­
tration of the Emperor William Canal the housing money to which
the custom officials are entitled. In 1904 the administration had 12
more apartments in process of construction, which were to be assigned
to pilots.
H OU SING W O R K OF IMPERIAL H OU SING FUND.

According to the statement submitted by the imperial chancellor
to the Reichstag on February 3, 1909, the latter had appropriated
the following amounts for the housing fund:
For the fiscal year 1901..........................................................................
$476, 000
For each of the fiscal years 1902 and 1903.......................................
952, 000
For each of the fiscal years 1904, 1905, and 1906.......................... 1,190, 000
For each of the fiscal years 1907 and 1908..................................... ..
952, 000
Total for fiscal years 1901 to 1908, inclusive.................................. 7, 854, 000
LOANS TO BUILDING ASSOCIATIONS.

Of this amount 24,620,750 marks ($5,859,738.50) were loaned
out on mortgage security to public-welfare building enterprises.
The Empire granted such loans to 84 enterprises, of which 78 were



172

B U L L E T IN

OF TH E BUREAU OF LABOR STATISTICS.

cooperative building associations with limited liability, 2 were registered
societies, 1 a stock company, and 1 a foundation. Among the 78
cooperative building associations there were 36 building associations
composed of officials (Beainten-BaAigenossenseliafte-r0, 3 of which
were founded before 1900, 3 cooperative building societies composed
principally of employees of the administration of the Emperor
William Canal, and 3 cooperative societies composed principally of
employees of the imperial navy yards. Of the above building enter­
prises 2 were founded before 1890, 5 between 1890 and 1894, 14
between 1895 and 1899, 47 between 1900 and 1904, and 13 between
1905 and 1908.
The membership in the 78 building associations was:
In 13 associations below 100 members,
In 51 associations 100 to 500 members,
In 9 associations 501 to 1,000 members,
In 4 associations 1,001 to 5,000 members,
In 1 association over 5,000 members.
Of the associations founded since 1900 eight had more than 500
members.

Of the capital subscribed by those building associations in receipt
of loans from the housing lund, which, were founded since January
1, 1900, 24 associations had paid in less than 50 per cent, 22 from 50
to 75 per cent, and 12 over 75 per cent.
The public activity of the associations was generally limited to the
erection of large tenements. Family houses for one or two families
were built by only 7 associations.
Houses designed to be bought-by the members on the installment
plan were built by only 5 associations.
The enterprises aided by the Government expended altogether
114,854,030 marks ($27,335,259.14) for ground and building costs
as follows:
51 borrowers expended less than 1,000,000 marks ($238,000)
each.
11 borrowers expended from 1,000,000 to 2,000,000 marks
($238,000 to $476,000) each.
7 borrowers expended from 2,000,000 to 3,000,000 marks
($476,000 to $714,000) each.
2 borrowers expended from 3,000,000 to 4,000,000 marks
($714,000 to $952,000) each.
1 borrower expended from 4,000,000 to 5,000,000 marks
($952,000 to $1,190,000).
5
borrowers expended over 5,000,000 marks ($1,190,000) each.
The Officials’ Building Association of Berlin (Beamten-Wohnimgs~
Verein zu B erlin) alone expended 25,400,000 marks ($6,045,200).




G O VERN M EN T AID TO H O U SIN G ---- G ERMAN V.

173

R ESU LTS OF LO A N S TO B U ILD IN G A S SO C IA TIO N S .

The enterprises aided bj Government loans had erected 1,619
buildings with 7,856 apartments, and 164 buildings with 917 apart­
ments were in process of construction.
Altogether 4,401 apartments had been rented to low-salaried
employees, artisans, and laborers in the service of imperial depart­
ments, although according to the loan contracts only 3,545 apart­
ments were to be reserved for rental to Government employees and
workmen.
In August, 1904, the imperial statistical office, in compliance with
a request of the Reichstag, undertook an investigation with a view
to making a comparison of the rents and housing conditions of imperial
employees in dwellings erected by public-welfare building associations
with the aid of imperial funds, and those rented by such employees in
the open market. On January 18, 1906, the results of this investi­
gation were presented to the Reichstag in a memorandum of the
imperial chancellor and are here briefly summarized.
The tabulated results of the investigation include 1,995 apart­
ments in dwellings erected by building associations with the aid of
imperial funds and 1,705 apartments rented in the open market by
employees of the intermediate and lowest salary grades and by work­
men of the post office department. The information was obtained
by sending schedules to the building associations aided by the Em­
pire and to the post and telegraph offices in the localities in which
these associations had their seat.
The first comparison between apartments rented from building
associations and those rented in the open market relates to the num­
ber of rooms in each apartment.
Three-room apartments form a larger proportion than any other
size of those rented from building associations, while among those
rented in the open market the four-room apartment takes the lead.
The percentage of apartments with a larger or smaller number of
rooms is nearly the same for both categories, and only as regards
apartments with 6 or more rooms is the percentage larger for apart­
ments rented in the open market.
The memorandum also presents tables to show that apartments
rented in the open market do not offer as many conveniences in the
way of attics, cellars, baths, private water-closets, stables, garden
plots, etc., as do those rented from building associations.
The memorandum then proceeds to give tables which show the
annual rents paid for apartments rented from building associations
and for those rented in the open market. In one table are given the
rents paid for the entire apartment and in another the rents paid per
square meter of habitable floor space. The first table shows that




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tho rent paid for the majority of the apartments rented from building
associations varied from 151 to 350 marks ($35.94 to $83.30) per year,
wliile that paid for the largest number of apartments rented in tho
open market varied from 351 to 550 marks ($83.54 to $130.90). The
second table shows that in 60.2 per cent of the apartments rented
from building associations in buildings fronting on the street the
annual rent per square meter (10.8 sq. ft.) was 5.49 marks ($1.31),
or less, while only 23.9 per cent of those rented in the open market
came within the same price limit. As regards apartments rented in
back-lot houses, the percentages were 56.1 and 22.9, respectively.
The two tables show conclusively, therefore, that cheaper floor space
is to be obtained in apartments rented from building associations
than in those rented in the open market.
The schedules sent to the various building associations and post
offices contained the following question: “ In case rents in the open
market have gone down, indicate whether this is due to the activity
of building associations or to some other cause.” Nearly all the
answers obtained to this inquiry are to the effect that rents in the
open market have either been reduced as a consequence of the activity
of newly created building associations or that the former tendency
toward an increase has received a check and that rents are remaining
stationary, a condition by which the employees of the Government
and the gen eral public are alike benefited.
C O N D IT IO N S FOR T H E G R A N T IN G OF B U IL D IN G L O A N S .

Building loans are granted only to public-welfare enterprises and
to them only if there is considerable need in their respective localities
for improvement of the housing conditions of low-salaried officials
and workmen of the Empire. The question whether such a need
exists is decided jointly by the imperial department of the interior
and the imperial central and local authorities interested, and unless
there is an actual scarcity of dwellings or housing conditions are
otherwise highly unsatisfactory, loans are as a rule not granted.
Associations applying to the Empire for loans must show that the
maintenance of their purpose as public-welfare societies is perma­
nently assured. The by-laws of such an association must state that
its exclusive object is to provide suitable apartments at moderate
rentals for families of slender means, and that these are to be provided
in houses specially built or purchased by the association for this
purpose. The dividends to be apportioned upon the shares of mem­
bers must be limited to 4 per cent of their paid-up subscription, and
the by-laws must contain the provision that in case of dissolution
of the association the members shall not receive more than the face
value of their shares and that the rest of the capital of the association
shall be used for public-welfare purposes.



G O VERN M EN T AID TO H O U SIN G ---- G ERM AN Y .

Applications for loans must be accompanied by—
1. The by-laws of the association.
2. An attest from the court of the proper registration of the asso­
ciation, giving the name of each of its directors, together with his
occupation and the office he holds in the association.
3. A list showing the name, occupation, and office (whether presi­
dent, etc.) of the members of the supervisory board, together with
information as to the membership of the association by occupations,
and especially as to the number of members who are low-salaried
officials or workmen in the employment of the Empire. Other points
on which information is required are the number of shares paid up in
full, the amounts paid in upon the rest of the shares, how many
members, in the case of associations with limited liability, own addi­
tional shares with the number of these shares, and the total amount
of liability of all members. Sometimes a complete list of the mem­
bers, giving name and occupation, is demanded.
4. A statement of the financial condition of the association and of
how the means required for the building operation in addition to
the loan from the imperial housing fund are to be raised, whether the
society has sufficient means of its own for this purpose or if it has
the assurance of such means at reasonable conditions and for a long
term from other parties. In case there are any first mortgages or
other long-term loans, the interest, refunding conditions, etc., are
to be indicated; if the association has been in existence for some time,
the last annual balance sheet, a business report, other papers giving
information as to the financial condition of the association, and the
last report of the legal auditors are also to be submitted. Former
negotiations as to loans from the Empire or a State must be men­
tioned.
If after examination of this material the absolute or temporary
rejection of the application does not seem imperative, there must be
submitted further:
5. A certified abstract of the land office describing the property
in question, together with a plot showing the location of all the
property owned by the association; the contract of sale for the prop­
erty on which the loan is to be made, or if the same is to be concluded
only after a preliminary granting of the loan, credible proof that the
property is to be sold to the association, at what price and on what
conditions, and from what means the purchase price is to be paid.
After the conclusion of the contract and before the definite decision
as to the granting of the loan, the contract itself must be submitted.
6. The building plan, which must show all buildings and apart­
ments and all appointments for the latter.
7. An estimate of the building costs and of the costs of road building, paving, drainage, installation of water service, fencing, plant­



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ing of trees, etc., these estimates to be attested by a superior tech­
nical official of the Empire or a State as to their suitability and
sufficiency.
8. A computation as to the prospective yield of the property on
which a loan is to be made, which must especially show the rents
to be charged, or, in case of associations which erect houses to be
sold to their members, the sale prices of the houses, the conditions
of payment, and the profit resulting from the sale. The rentals may
not be computed higher than is necessary to obtain the usual local
interest on the capital invested in property and building, together
with the amount required for refunding the capital, and for costs of
administration and maintenance.
In the case of associations which erect houses for the purpose of
selling them to their members, the sale price shall as a rule be based
on the total cost, composed of the price of the ground, building costs,
interest, and cost of administration up to the date on which the pur­
chaser moves into the building. The sale contract must contain
provisions which assure the permanent maintenance of the house as
a dwelling for people of small means.
9. Sample forms of the leases and contracts of sale to be concluded,
as well as of the regulations to be issued for the use of the dwellings
and apartments.
As to the security for the loan, the following conditions are to be
observed:
1. The loan may not exceed 85 or at the most 90 per cent of the
value of the house inclusive of the value of the ground or the full
building value of the house without the value of the ground. The
amount is at first fixed provisionally by the imperial department of
the interior. The value of the building is provisionally computed
on the basis of the estimated cost of the building. When the build­
ing is completed its value is definitely fixed on the basis of a valu­
ation by a court, by a superior technical official of the Empire or a
State, or by a public fire insurance company with which the build­
ing is insured. The value of the ground may not be computed
higher than at cost. The department of the interior reserves the
right of revaluation.
2. It is not necessary that the loan be secured by a first lien. The
policy of the imperial department of the interior is to facilitate as
much as possible the financing of public-welfare building operations
and to aid with its available means as large a number of associations
as possible. Therefore under special circumstances it is satisfied
with a second or third lien as long as the loan remains within the above
designated limits and the security seems sufficient .
3. The loan is to bear interest at the rate of 3 per cent. One per
cent is to be annually refunded, this refund to be increased by the



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177

amount by which the original interest annually decreases, so that the
total annuity to be paid each year for interest and refund amounts to
at least 4 per cent of the loan.
The amounts for interest and refund become due on the first day
of each calendar quarter and are to be paid at the latest within two
weeks after this date, at the treasury of the imperial department of
the interior in Berlin. The unrcfunded part of the imperial loan is
to be considered as a prior lien to the refunded part of it and also to
the refunded part of any other mortgage preceding it in rank.
4. The association is obligated to construct the buildings with good
materials and in a solid manner, according to the plans and estimate
of costs submitted, and possibly changed on request of the depart­
ment of the interior, within the time limit agreed upon. In case
changes should become necessary it must first obtain the approval of
the department of the interior. In case of reconstruction of a build­
ing after a fire, the association must conclude a new agreement with
the department of the interior as to the building plan, estimate of
costs, and time limit for reconstruction.
The association is obligated to maintain the building and its
appointments in good condition. On request of the department of
the interior it must make necessary repairs and alterations required
for hygienic or moral reasons within the stipulated time limit.
Essential changes in the building or complete or partial demoli­
tion of it may be undertaken only if approved by the department of
the interior.
The department of the interior is at all times authorized to have
the properties of the association inspected by its representatives,
even those properties which are not a lien for the loan made from the
imperial housing fund.
The association is obligated to submit to the department of the
interior without request its business reports and other publications,
as well as the minutes of its general meeting and the reports of the
legal auditors. It must also furnish to the department all informa­
tion the latter considers necessary for judging the financial condition
of the association .
The association is further obligated to maintain a clear and correct
system of bookkeeping, cash accounts, and administration. It must
permit the representatives of the department to examine into the
administration, and to participate in the meetings of the super­
visory board and in the general meetings.
5. The buildings are to be insured against fire for their full value with
a public fire insurance institution. So far as possible they are to be
insured even during their construction, and the insurance is to be
kept up continuously. Proof of the regular payment of the premiums
G017 1

B u ll.




1r> — 1r,-------- 12
R

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B U L L E T IN

OF TILL-] BUREAU OF LABOR STATISTICS.

must bo submitted to the department of the interior within two
weeks after these premiums have become due.
6. The manner in w hich low-salaried officials and workmen
employed in the establishments and administrative departments of
the Empire shall be considered in the distribution of the houses and
apartments is in each instance to be determined in a special agree­
ment between the imperial department of the interior and the
association with special reference to existing conditions.

7. The imperial exchequer must be granted the right of refusal on
the properties or buildings on which loans are to be granted. If an
association which constructs houses to be sold to its members has in
its by-laws reserved for itself the right of refusal or of resale, the
imperial exchequer shall claim its right of refusal only in case the
association itself does not wish to exercise it,
8. The loan may be called or repaid entirely or in part at the option
of the respective parties on three months' notice. However, as long
as the debtor complies with the obligations given above under Nos.
3 to 7 the creditor may make use of this right only after 10 years
have elapsed since the last part payment. Each contravention of
these obligations authorizes the creditor to recall the loan without
further admonition, provided that he gives notice within six months
after the establishment of such a contravention.
The imperial
department of the interior may likewise recall the loan on three
months’ notice if, in its opinion, the character of the building enter­
prise as a public-welfare enterprise is no longer maintained, especially
if essential changes have been made in the form of the leases and
contracts of sale or in the regulations to be issued for the use of the
houses and apartments. Unless the department of the interior
explicitly grants its continuance the loan becomes immediately due
without any notice, whenever the property or building is sold (with
the exception of instances in which the association sells property to
its members in accordance with its by-laws) or the association is
dissolved.
9. The preceding and other possible conditions and obligations,
especially the agreement mentioned under No. 6, are to be acknowl­
edged by the debtor in a contract in which he also obligates himself
to effect at his own cost the registration in the land register of the
loan and of the conditions and obligations given under Nos. 3 to 7.

10. When this last condition has been complied with, the depart­
ment pays over the loan in installments to be specially agreed upon
in each instance.
If it is shown after completion of the building that the registered
loan exceeds the limit prescribed on the building in question, a receipt
is issued for that amount of the loan which is in excess of the limit




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179

and therefore has not been paid out, so that this amount may bo
canceled in the land register.
11.
Requests for the payment of installments of the loan must be
made by the association in due time before the date of payment
agreed upon. These part payments bear interest from the date oil
which they are made. The above requests must always be accom­
panied by the attest of a superior technical official as to the progress
of the building according to the submitted plans, and must show the
value of the building on the date of the request.
G R A N T OF H E R E D ITA R Y R IG H T OF C O N ST R U C T IO N O N G O V E R N M E N T -O W N E D LA N D .

In the preceding pages devoted to the description of the conditions
for the granting of building loans from the housing fund to associations
which build on their own ground, it has been shown that the most
far-reaching guaranties are demanded that the buildings constructed
with the aid of means from the housing fund may not later on be used
for other than the original public-welfare purposes. This object is
accomplished in a much more perfect manner if the Empire is the
owner of the ground and the associations are given only the right of
use (Erbbaurecht). In many instances the imperial exchequer uses
the housing fund to secure the land on which an association desires to
buikl; and then grants the association the hereditary right of construc­
tion. Such a procedure absolutely precludes all land speculation and,
moreover, guarantees that the imperial exchequer, and therefore the
general public, shall reap the benefit of any possible increase in the
value of the land. The advantage to the building associations is,
that at the beginning of their activity they do not have to raise the
funds for the acquisition of the land, but merely have to pay, as long
as the right of construction endures, a moderate rent, which is con­
siderably less than the costs they would otherwise incur for interest
and refund of the purchase price of the land.
The memorandum (D enkschnft) of the imperial department of the
interior of June 10, 1904, says that the objections frequently raised
against the hereditary right of construction are not well founded as
against the method in which the Empire uses it in the solution of the
housing problem. These objections are generally of two kinds. On
the one hand it is feared that abuses might result from the economic
advantage which, at the time of its expiration, the hereditary right
of construction gives to the owner of the land. On the other hand,
it has been pointed out that especially in the last years of the
hereditary right of construction the interest of the party exercising
it may begin to slacken, and that he may neglect the buildings.
The first objection is well founded only where the land is owned by
a private person or by a corporation organized for profit. In such a




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OF TH E BUREAU OF LABOR STATISTICS.

case, of course, it may happen that if the parties exercising the right
of construction wish to renew the contract after its expiration, they
may find themselves in the power of the owner of the land. This
objection, however, is not pertinent in the present case, since the
imperial exchequer remains the owner of the land, and especially
since the hereditary right of construction is granted in the discharge
of a social economic duty, not as a matter of profit on either side.
•The second objection, which is chiefly based on the experience of
other countries which permit a free traffic among private parties in
this form of ground lease, can easily be met by suitable provisions
in the contract of lease. It must, moreover, not be left out of con­
sideration that the public-welfare enterprises in whose favor such
ground leases are made would in every respect act against their own
interest if they should purposely neglect the buildings erected by
them.
The civil code defines the hereditary right of construction in
articles 1012 to 1017 as follows:
A piece of land may be so charged that the one in whose favor the
charge is made has the disposable and hereditary right to maintain
a structure upon or beneath the surface of the land.
The hereditary right of construction can be extended to the use of
a part of the piece of land not needed for the structure, if its use is
advantageous to the use of the structure.
The restriction of the hereditary right of construction to a part of
a building, in particular a story, is not permissible.
The conveyance by agreement required by article 873 between the
owner and purchaser, for the creation of the hereditary right of con­
struction, must be declared at the office of land registry in the pres­
ence of both parties.
The hereditary building right is not extinguished by the destruction
of the structure.
The provisions relating to land are applicable also to the heredi­
tary right of construction. The provisions in force as to the acquisi­
tion of ownership and the claims arising from ownership apply equally
to the hereditary right of construction.
According to the provisions of the civil code quoted above it is not
permissible in a contract granting the hereditary right of construc­
tion to prohibit the party to whom this right is granted from disposing
of it. Provision must, therefore, be made in some other manner to
obtain a guaranty that the land and the buildings to be erected on
it shall not during the term of the hereditary right of construction
be withdrawn from their original purpose and be used for purposes of
speculation. To this end the following provisions were included in
all contracts of the Empire granting the hereditary right of con­
struction :
The utilization of the hereditary right of construction is restricted
to the erection of dwellings with small apartments for the use of




G O V E iiX M E X T AID TO H O U SIN G ---- <•ElGY.fA A V.

181

workmen and low-salaried officials of tlie Empire and of persons of
like social rank, of dwellings containing welfare institutions for these
renters, and of accessory buildings (stables, laundries, etc.) belonging
to these dwellings. The plans of these buildings must be approved
by the secretary of the interior. A like approval is required for all
additions to and changes in the buildings, as well as for the installa­
tion of restaurants and saloons. The rents may not, according to the
resolution adopted by the Reichstag at the time the appropriation
was made for the housing fund, be higher than is required to obtain
the funds necessary for the payment of interest, for the refund of the
capital invested in the construction of the buildings, and for the costs
of administration and maintenance, inclusive of a reserve fund for
emergencies. Sample forms of the leases and regulations for the
renters are to be submitted for approval to the secretary of the inte­
rior, so that he may enforce the above provisions. Finally, there
must be reserved to the imperial exchequer the right of refusal in all
cases of disposal of the hereditaiy right of construction or of buildings
and appointments erected under it.
Those associations which are not exclusively composed of employees
of the Empire are bound by the contracts to reserve apartments for
workmen and low-salaried officials employed in the establishments
and administrative departments of the Empire, the number to be so
reserved corresponding to the aid given the associations by the Empire.
The contracts also contain provisions obligating the associations to
observe the building specifications and the time limit agreed upon for
completing the building, to keep the buildings insured against fire,
and to reconstruct them after a fire.
In case of contraventions of these provisions the imperial exchequer
has the option either of enforcing them by means of execution or a
sheriff’s sale, or of annulling the grant of the hereditary right of
construction.
In most of the instances in which the imperial exchequer grants to
an association the hereditary right of construction it also loans to it,
wholly or in part, the money required for the construction of the
buildings. In such instances the above provisions are essentially
supplemented by the provisions of the loan contract, since the latter
generally contains the condition that if the provisions of the contract
relating to the hereditary right of construction are violated the build­
ing loan may be recalled. This threat is an effective means to force
the grantee of the hereditary right of construction to observe the
conditions of the grant. The right of disposal of the hereditary right
of construction may not be restricted either in the grant itself or in
the loan contract, because the civil code, in article 1136, provides that
an agreement by which the owner binds himself to a creditor not to
sell land or burden it any further is void. There is, however, 110 legal



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B U L L E T IN

OF T H E

BUREAU OF LABOR STATISTICS.

provision against insertion in. the loan contract of a provision that
the mortgage becomes due in case of disposal or further encumbrance
of the right of construction, and such a provision has been inserted
in all of the loan contracts concluded by the Empire.
The compensation (Erbbauzins) which the grantee of the hereditary
right of construction has to pay to the imperial exchequer for the
use of the land may not be computed so high that it represents a full
capitalization of the value of the land, because the imperial exchequer
does not dispose of it permanently, but after the expiration of the
contract again obtains ownership of the land and, in addition, of the
buildings erected on it. In consideration of this circumstance, in all
contracts concluded up to date, the ground rent was fixed at 2 per
cent of the value of the land. The ground rent is to be entered in
the land register as a charge on the piece of ground.
If the grantee of the hereditary right of construction falls into
arrears with the payment of the ground rent, the loan contract pro­
vides as a rule that the building loan becomes immediately due; in
case of arrears for a period in excess of one year the imperial ex­
chequer is authorized to annul the grant of the hereditary right of
construction.
The hereditary right of construction terminates, unless contra­
ventions by the grantee of his obligations cause an earlier termina­
tion, with the expiration of the period for which it was granted. In
determining this period it is to be considered that the grantee must
be put in a position to mortgage the property. The term fixed must,
therefore, be long enough so that the building loans assumed by the
grantee may be entirely refunded and that there may be in addition
a few years during which the buildings are free from encumbrance.
The duration of the hereditary right of construction can not in
all instances be fixed uniformly. Where, at a considerable outlay of
capital, large and substantial buildings are to be constructed on the
leased land, it is only fair to grant a longer term than in instances in
which small houses of less massive though solid construction are to
be erected. In the contracts granting the hereditary right of con­
struction concluded by the imperial exchequer up to date, the term
of the grant has varied between 65 and 80 years.
On the expiration of the hereditary right of construction, all
buildings erected on the land become the property of the imperial
exchequer. However, in order that the grantee may not during the
period preceding the expiration of this right lose all interest in the
maintenance of the buildings, he is to be paid by the imperial ex­
chequer one-fourth of the estimated value of the buildings at the
time of the expiration of the hereditary right of construction. This
measure should do justice to practical requirements as well as to
equity. The grantee will always keep in mind that the better the



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183

condition of the buildings on the expiration of the hereditary right
of construction, the larger will be the compensation which he can
claim from the imperial exchequer. Neither does the imperial
exchequer suffer any disadvantage through this arrangement,
because even if it should be found that the building is in such bad
condition that it has to be demolished, the grantee of the hereditary
right of construction would receive only one-fourth of the price paid
by the wrecking enterprise, and the imperial exchequer three-fourtlis.
Careful provision is made that if the terms of the contract are
violated and the hereditary right of construction is thereby forfeited,
the grantee shall be suitably compensated for any buildings he has
put up on the land. This is done that there may be no trouble in
obtaining loans secured by the buildings. The usual arrangement
is that during the first 40 to 50 years, according to the duration of
the grant, the buildings shall be considered to have depreciated by
at least one-fourth of their original value, but that the grantee shall
receive their full assessed value up to the three-fourths of their cost
price. After this period the compensation is to bo reduced 3 per cent
for each year elapsed. Unless some such plan of gradually reducing
the compensation were adopted it would manifestly be to the advan­
tage of the grantee to force the annulment of the contract in its later
years, as he would then receive the full value of the buildings, whereas
at the expiration of the grant he would receive only one-fourth.
The contracts provide further that the hereditary right of construc­
tion shall expire without compensation if the grantee does not erect
the proposed buildings within two years after having been given
possession of the land, or does not within three years completely
restore buildings which were damaged by fire. The mortgage
creditors are in the latter case secured by the insurance awards.
The statement submitted to the Reichstag on February 3, 1909, by
the department of the interior shows that up to the end of the year
1908, 5,474,245 marks ($1,302,870.31) of the appropriation for the
imperial housing fund were expended for the purchase and drainage
in 12 localities of 210.6245 hectares (520.45 acres) of land and for
street building on the same. Hereditary right of construction was
granted to building associations on 55.6408 hectares (137.49 acres)
of this land. The average purchase price of the land was 1.93
marks (45.9 cents) per square meter (10.8 square feet).
BUILDING LOANS BY THE STATE INSURANCE INSTITUTES.
More important than the direct aid granted by the Empire to
public-welfare building associations is the indirect aid given to them
by the imperial invalidity insurance law in permitting State insurance
institutes to use their funds for such aid.



184

BU L LE TIN

01?’ TH E BUBEAU OF

LABOB STATISTICS.

When the invalidity and old-age insurance law of June 22, 1889,
came into force on January 1, 1891, it was expected that during the
first decades of its operation the invalidity and old-age institutes
would accumulate large funds. Experience justified this expecta­
tion, for with the exception of a few insurance institutes in territories
where the population was largely rural and the risks were especially
unfavorable the director.' of the institutes, after the first years of
operation, had to look around for investments for considerable funds.
According to article 1(34 of the invalidity insurance law of 1889
the funds of the State insurance institutes are to be invested in the
manner prescribed by the civil code in article 1807 and 1808, i. c., in
the same manner as trust funds (mundelsicher) . The State laws
determine in so far as mortgages are concerned the limits within
which trust funds may be invested in them ; in the case of rural prop­
erty, trust funds may be loaned on a first mortgage up to two-thirds
of the value, and in case of urban property up to one-half of the
value. The same article of the invalidity insurance law permits
insurance institutes to invest, with the approval of the imperial
insurance office, their funds up to one-fourth in a manner other than
the one prescribed for trust funds. In case of approval of the com­
munal union or of the highest administrative State authority they
may even invest one-half of their funds in a manner different from
that prescribed for trust funds. Such investment is, however, only
permissible in securities and in other ways only for purposes of
administration, to avoid the loss of assets, or for undertakings which
exclusively or principally accrue to the welfare of those subject to
the insurance. The real object of this last provision was to enable
the insurance institutes so to invest their funds as to give financial
aid to welfare associations erecting suitable workmen’s homes.
The rapid growth of the cities is the actual cause for the existing
scarcity of dwellings suitable for workmen. As a rule, in a rapidly
growing industrial town private enterprise unaided can not or does
not provide a sufficient number of workmen’s dwellings. Private
capital is held back by the fear that the local increase of industrial
prosperity is only temporary, and by the fact that the low profits
which are likely to be realized on an investment in working­
men’s dwellings do not offer any strong incentive to such an enter­
prise. It is a fact of frequent occurrence that a workingman’s
dwelling, on account of the high cost of keeping it in repair, its great
deterioration, and the frequent loss of rents, is a much less profitable
investment than an apartment house for the well-to-do classes. The
housing problem becomes, therefore, mainly a question of the income
to be expected from workmen’s dwellings. This income could, how­
ever, be considerably increased bv cheaper mortgage credit, and the




G OVEEXM EXT AID TO li'O U S IX G — G E E M A X Y .

185

whole housing problem is, therefore, ultimately a question of cheap
credit.
The State insurance institutes, more than any other financial insti­
tutions, are in a position to furnish cheap capital for the erection of
workmen’s dwellings, because it is to their personal advantage to
improve the housing conditions of their members. Just as the causal
connection of climate and sickness, of nutrition and sickness, and of
occupation and sickness can easily be proved, so also the causal con­
nection of housing conditions and sickness becomes a matter of course
which hardly needs proof. From the standpoint of preventive treat­
ment the improvement of the housing conditions of workmen means,
therefore, an improvement of the health of the people, and for the
State insurance institutes it means a saving in the payment of
invalidity pensions.
The directorates of the insurance institutes were well aware of this
fact, and there arose merely the question: In what manner may the
funds accumulated in the insurance institutes be best employed for
the improvement of workmen’s housing conditions?
Soon after the invalidity insurance institutes had begun their
activity in this kind of welfare work it was recognized that direct
loans upon small dwellings of the insured persons were not practicable
on a large scale and that therefore an intermediary would have to be
found between the parties in need of credit and the insurance insti­
tutes. In this respect it was soon recognized that the building asso­
ciations, especially in the legal form of registered associations with
limited liability, are most properly suited to act as loan agents.
The formation of building associations had meanwhile received
great encouragement by the enactment in 1886 of the law relating to
cooperative societies, which broke the rigid principle of solidarity of
all members and permitted the creation of cooperative societies with
limited liability, and by the liberal manner in which funds were put
at their disposal by the State insurance institutes.
As has been mentioned above, the invalidity and old-age insurance
law of 1889 contained a provision permitting the State insurance
institutes to invest under certain conditions one-fourth of their assets
in real estate without regard to the limitations otherwise prescribed
as to security for such investments. When the invalidity and oldage insurance law was revised in 1899 the powers granted by this
provision, in view of the success which the insurance institutes had
made with their financial aid of building associations, were greatty
enlarged. The conditions for the employment of the first fourth of
the assets were made less strict, and under specified conditions it was
also permitted to use another fourth of the assets in the same manner.
The insurance institutes have made generous use of these facilities




186

B U L L E T IN

OF TH E BUREAU OF LABOR STATISTICS.

and have made loans to building associations not merely at a very
low rate of interest but under such favorable refunding conditions that
the financial difficulties of the building associations have disappeared.
Some of the State insurance institutes have set up standard con­
ditions for the granting of loans for building purposes, which not only
safeguard the security of the capital invested but also attempt a
systematic regulation of the building activity in the interest of public
welfare. For instance, detailed conditions have been made by the
insurance institutes of Schleswig-Holstein, Hanover, Westphalia,
Hesse-Nassau, and the Rhine Province. Other institutes, however,
as, for instance, those of Mecklenburg, Upper Bavaria, Lower Bavaria,
and Brandenburg have not established any fixed rules but make their
conditions according to the merits of the case in question. As a rule,
the loan conditions have, however, with the exception of small varia­
tions, a certain uniform character.1 Certain typical principles are
to be found in all of them, and essential deviations from these are very
rare. For the purpose of this work, therefore, we here limit ourselves
to an enumeration of the governing principles and typical conditions.
COND ITIO NS UNDER W H IC H LOANS ARE G R AN TED .1
T H E B O R R O W E R S.

Most of the insurance institutes grant loans to communes, unions
of communes, savings banks, legally recognized foundations, corpora­
tions, and building associations. The institute of Schleswig-Hol­
stein considers also individual members of cooperative credit socie­
ties if the latter belong to the federation of agricultural cooperative
societies of Schleswig-Holstein.
The insurance institutes of West Prussia, Silesia, Hanover, Bruns­
wick, and Middle Franconia make loans also to employers, and that
of Hesse-Nassau to agricultural employers.
Employees may obtain loans from the institutes of—
Silesia and Posen, only through a commune;
Hanover, only insured persons, for houses with not more than
two-family apartments;
Westphalia, for houses with not more than three apartments and
not more than three rooms per apartment;
Oldenburg, in case there is 110 building association in the locality;
Hesse-Nassau and Rhine Province, if a cooperative society, a com­
mune, a union of communes, or a savings bank is jointly liable for the
loan;
Baden, for houses with not more than three apartments;
Wurttemberg, Middle Franconia, Swabia, if a borrower of the other
admitted classes is jointly liable for the loan;
The Palatinate.
1 Die Besehaffung hypothekariseher Darlehen fiir Baugeuossensehaft en Sob rift en der O ntralstelle fiir
Arbeilerwohlfalirtsemriohtuiigen, No. 33, pp. I4ff. Berlin, 1008.




GOVERNMENT AID TO H OU SIN G -----G ERM AN Y .

187

G R A N T OF LO A N S T H R O U G H TH E IN S T R U M E N T A L IT Y O F O T H E R PA R TIE S.

The insurance institutes of Hanover and Westphalia have issued
special regulations for the granting of loans through the agency or
guaranty of communes or savings banks. The institute of Thuringia
makes loans also through State credit institutes or public savings
banks, and that of the Rhine Province designates such intervention as
preferable.
SECU R ITY O N W H IC H LO A N S ARE M A D E .

Such security consists of:
(a) Houses to be sold on installments or to be rented. Nearly all
institutes make loans on both kinds. In the case of loans on houses
which are to be sold on installments the building association remains,
as a rule, jointly obligated with the buyer, and in Schleswig-Holstein
it must also collect the interest and refunding payments and transmit
them to the institute. The institute of Upper Franconia requires in
its contracts that renters must be given an opportunity to purchase
the dwellings rented by them, while that of the Upper Palatinate
makes such a stipulation only in case of loans to employers.
(b) One and two family houses. Loans are made on such houses
exclusively by the insurance institute of Thuringia, and preferably
by the institutes of East Prussia, the Rhine Province, Upper Fran­
conia, and Swabia and Neuburg. The institute of Middle Franconia
gives the preference to loans on two and four family houses.
(c) Hereditary right of construction. Loans on this right are ex­
plicitly declared permissible by the insurance institute of the King­
dom of Saxony, The other institutes do not even mention such
loans.
R E Q U IR E M E N T S AS TO P U B L IC -W E L F A R E CHARACTER OF B U IL D IN G S .

These requirements are specified in the contracts in various ways
as for instance:
(a) The rents must be suitable— i. e., not higher than is required to
provide for a proper interest on the invested capital, the refund of the
loan, costs of maintenance, administration, taxes, and other encum­
brances. Experts must be consulted as to the proper amount of
rent to be charged. According to the provisions of the insurance
institutes of the Hanse Towns the total amount of rents of a building
may not exceed 6f per cent of the invested capital.
(b) The dividends are in many instances limited to 4 per cent.
In addition it is frequently provided that the associations must
incorporate in their by-laws the provision that in case of dissolution
of the association the members shall be entitled only to the face valuo
of their shares, while the surplus shall be used for public-welfare
purposes.
(c) Often a stipulation is made that each apartment must contain
a certain number of rooms, the number varying considerably in



188

B U L L E T IN OF TH E BUREAU OF LABOR STATISTICS.

different places. The requirements in some of the States are as
follows:
West Pi •ussia: One large room (Stube), one small room (Rammer),
and kitchen.
Posen: Two living rooms, one of which may be used as kitchen,
with a total air space of at least 90 cubic meters (3,178 cubic feet).
Schleswig-Holstein : Two rooms sufficiently large to make possible
a separation of the sexes in case of grown children, and a small room
with one window.
Kingdom of Saxony: At least two rooms which can be heated,
inclusive of kitchen and a sufficiently large bedroom.
Rhine Province: At least three rooms.
Swabia and Neuburg: Three main rooms, exclusive of accessories.
(d) The subletting of rooms is permitted only in a vciy restricted
manner; in Hesse-Nassau, for instance, only to blood relations,
parents-in-law, and wards. In case of houses to be sold on install­
ments the number of apartments that may be rented is generally
limited to one or two.
(e) The safeguarding of the maintenance of the public-welfare
character is effected by providing short-term notices for the recall of
the loan in case of noncompliance by the borrower with his obliga­
tions, by registration of the right of refusal, by thorough supervision,
by stipulating that the associations must obtain the approval of the
insurance institute for certain transactions, and by other similar
safeguards.
SUPERVISION.

To facilitate efficient supervision in the interest of the security of
the loans and of the public-welfare character of the building activity
of the associations provision is made:
(a) That the insurance institute may become a member of the
building association, as is required in Hanover, Schleswig-Holstein,
and the Hanse Towns.
(b) That the insurance institute shall be represented in the super­
visory board, as required in East Prussia.
(c) That inspection of the buildings is to be permitted.
(d) That the institute may inspect all reports, minutes of meetings,
books and documents, balance sheets, building and remodeling plans.
(e) That the institute may request any information required by it,
and that such a request must be complied with.
APPRO VAL BY TH E IN SU R A N C E IN S TIT U T E .

Such approval is required—
(a) For disposal of the buildings :
(b) For changes in construction ;
(c) For changes in the use of the buildings;



G O VERN M EN T AID TO H O U SIN G ---- G ERM AN Y .

(d)
(e)
(/)
(g)

189

For the acquisition of building sites (in Hanover);
For the beginning of building operations (in Hanover);
For changes in the by-laws;
For the raising of rents (in Saxony).
FIRE INSU R A N C E.

Fire insurance is required as a matter of course. Some insurance
institutes, as for instance those of Schleswig-Holstein, Hanover,
Brunswick, and Hesse-Nassau, prescribe insurance in specified public
fire insurance institutes. Other institutes, as, for instance, that of
the Palatinate, require also that the chattels of the renters be insured.
A U D IT IN G .

Associations to which loans are to be granted must in SchleswigHolstein, Westphalia, and the Rhine Province be members of specified
auditing unions (.Remsionsverbande) of building associations.
TER RITO R IAL R EST R IC TIO N FOR LO A N S.

All insurance institutes with the exception of that of Berlin make
loans only within their own territory.
P E R SO N S TO W H O M TH E D W E L L IN G S M U S T BE R E N TE D .

Loans are granted only to those building associations which,
according to the conditions of the insurance institute in question,
rent or sell dwellings either chiefly or exclusively to insured persons
or persons subject to insurance or simply to workmen. Most of the
institutes consider only insured persons.
L IM IT OF A M O U N T OF L O A N S .

The limit of the amount of loans, as determined by the individual
insurance institutes, varies greatly.
(a) Loans within the limit prescribed for trust funds by the various
State laws are made by the institutes of Posen, Berlin, Upper
Franconia, Swabia and Neuburg, and of the Grand Duchy of Hesse,
the latter also lending beyond this limit in case of guaranty of the
loan by the commune.
(b) Loans up to 60 per cent of the estimated value of the security
are made by the institutes of Thuringia, Middle Franconia, Lower
Franconia, the Upper Palatinate, Lower Bavaria, and the Palatinate.
(c) Loans up to 75 per cent of the estimated value of the security
are made by the institutes of East Prussia, West Prussia, Pomerania,
Oldenburg, Westphalia, Brunswick, the Kingdom of Saxony, the
Rhine Province (these institutes lend up to 85 per cent of the actual
costs), and Baden.
(d) Loans up to two-fifths of the estimated value are made by
the institutes of Silesia, the Hanse Towns, Schleswig-Holstein (in case



190

B U L L E X IX

01’ TH E BUBEAU

OE LABOii STATISTICS.

of guaranty by tho commune, up to 90 per cent). Saxe-Anhalt,
Alsace-Lorraine, and Wur t1emberg.
(e)
The insurance institute of Hanover makes loans up to 100 per
cent of the net building costs.
R A N K OF TH E M O R T G A G E .

Wherever any provision is made in this respect it is always required
that the mortgage must be a first lien.
RATE OF IN T E R E S T.

The rate of interest charged is usually 3 or 34 per cent. Loans are,
however, also made at rates varying from 2 to 44 per cent.
REFU N D OF L O A N S .

(a) In per cent. The rate of refund stipulated is usually 1 per
cent. The rates are:
Kingdom of Saxony, one-half of 1 per cent ; Grand Duchy of Hesse,
4 to 1 per cent; Lower Franconia (only until the security is that
required for trust funds), 4 to 2 per cent; Schleswig-Holstein, 1 to 14
per cent; Upper Palatinate and Ratisbon (until the security is that
required for trust funds), 1 to 2 per cent; Westphalia (only 1 per cent
after the security is that for trust funds), and the Rhine Province (in
addition, as a contribution to the reserve fund, one-half of 1 per
cent of the amount in excess of the security required for trust funds),
1J per cent.
(h) Computed by years, refund is required in—
Twelve years, up to one-half of the value, in Oldenburg; thirty
years in Silesia ; forty years in Middle Franconia ; forty-two years in
Pomerania; forty-six years in Wurttemberg; fifty years in Baden (in
15 years for the amount in excess of the security for trust funds).
(c)
Refund by means of life insurance. This is a new refund­
ing method adopted by the insurance institute of the Rhine Province
after the example of the General Savings Bank of Belgium. It is
effected by having the workman, who either directly or through a
building association has purchased a house, take out insurance
from the institute, usually for the amount of the loan made by the
institute. As a rule the insurance must be on the endowment plan.
At the death of the insured person, his heirs become the owners of
the building free of encumbrance, or, if the policy matures during
his lifetime, the insured himself becomes the owner. This plan is
especially devised for the possibility that the borrower—generally
the breadwinner of the family -may die prematurely. In such a
case his heirs may get into financial difficulties, not be able to pay
the interest and refund, and frequently the communes or building
associations, jointly liable with the borrower, must assume the burden
of their liability.



G O V ERN M EN T

A ID

TO

HOUSING----- G ERM AN Y .

191

BU ILD IN G LO A N S.

Such loans are granted by the following institutes: East Prussia,
West Prussia, Hanse Towns, Schleswig-Holstein, Westphalia, HesseNassau, the Rhine Province, Alsace-Lorraine, Grand Duchv of Hesse,
Upper Palatinate and liatisbon, Swabia and Neuburg, and the
Palatinate.
Building loans are granted exceptionally by the institute of Silesia.
The institute of Hanover pays two-thirds of the building loan to
be granted after the building, exclusive of the inside work, is
completed.
RECALL OF TH E LO A N .

In about half of the States the institutes may recall their loans
without giving any special reason for so doing; usually a notice,
varying from 3 to 12 months, must be given before this can be done.
In the remaining States the institutes have the right to recall their
loans under certain conditions.
The conditions generally stipulated as reasons for the recall of
loans are: Impairment of the security of the loan, breach of contract,
danger of change in the application of the loan, and noncompliance
with the conditions made by the institute.
Of the so-called “ admitted” 1 institutes (Zugelassene Kasseneinriclitungen) , the pension fund of the Prussian-IIessian railroads is
the only one which has furthered the public-welfare building activity
to any great extent. The conditions made by these “ admitted”
institutes for the granting of loans are very similar to those stipu­
lated by the State insurance institutes.
STATISTICS OF STATE INSURANCE LOANS.

The imperial insurance office has published extensive statistics
as to the public-welfare activity of the State insurance institutes and
other similar bodies in its official bulletin of March 15, 1914.
i The “ admitted” institutes are those special institutes in which the benefits are of at least equal value
with the legal benefits of thei nsurance institutes.




192

B U L L E T IN

OF TH E BUREAU OF LABOR STATISTICS.

The following table shows the large increase since 1900 in loans
made on workmen’s dwellings:
T O T A L A M O U N T O F L O A N S M A D E ON W O R K M E N 'S D W E L L I N G S B Y T H E C A R R IE R S
O F T IIE G E R M A N I N V A L I D I T Y A N D O L D -A G E IN S U R A N C E F R O M 1S91 TO T H E E N D
O F E A C H S P E C IF IE D Y E A R , 1000 TO 1913.
[Source: Amtliche Nachrichten des Reichsversicherungsamls, vol. 30, No. 3, Mar. 15, 19.14.]

Year.

Amounts
loaned on
workmen’s
dwellings.

Loans on less security
than
required
for
funds (a u s s c r halb
M i l n d d sich c r licit).

Amount.

190 0
190 1
190 2
190 3
190 4
1905....
1900....
1907....
190 8
190 9
191 0
191 1
1912....
1 9 1 3 _____

$18,594,750
20,832,037
24,020,078
28,177,027
31,099,579
35,934,941
41,085,381
40,589,210
50,975,921.
00,703,280
70,175,598
80,205,503
99,544,458
114.807,744

*3,053,374
3,509,774
1,357,441
4,875,727
5,112,267
5,865,180
0,512,794
7,710,574
8.863,979
9,989,073
11,031,215
12,383,900
14,034,886
15.550,844

Per cent
ol total
loans.

10.4
16.8
17.7
17.3
16.1
16.3
15.9
16.6
15.6
15.0
14.5
14.4
14.1
13.5

The total assets of the carriers of the invalidity and old-age
insurance were, at the end of the year 1912, 1,929,100,000 marks
($459,125,800).
Of this amount 365,600,000 marks ($87,012,800),
or 19 per cent of the total assets, were outstanding in loans on
workmen’s dwellings, and 52,700,000 marks ($12,542,600) had been
repaid. The percentage which outstanding loans on workmen’s
dwellings formed of the total assets at the end of the year 1913 can
not be given here, as the amount of total assets for that year has not
yet been given out by the imperial insurance office.
The above table shows that the insurance carriers in their loans
on workmen’s dwellings make use to a considerable extent of the
right to loan out one-fourth of their assets on security inferior to
that required for trust funds. They use this right much less in their
other investments for welfare purposes, for the statistics of the
imperial insurance office show that the amount loaned up to the
end of the year 1913 for welfare purposes other than, workmen’s
dwellings was 561,900,000 marks ($133,732,200), of which only
13,700,000 marks ($3,260,600), or not more than 2.4 per cent, were
invested on security inferior to that required for trust funds. The
table, on the other hand, shows that even in loans on workmen’s




G OVERXMEXT AID TO HOUSING---- GERMANY.

193

dwellings there has recently been a tendency to reduce the percent­
age of such investments on inferior security. A detailed statement
of the manner in which the individual carriers of the invalidity and
old-age insurance have loaned out their funds on workmen’s dwell­
ings is presented in the following table.
GG171°— Bull. 158— 15--------13




B U L L E T IN

O iL
T

A M O U N T OF

OF TH E BUREAU OF LABOR STATISTICS.

LOANS

M A D E ON W O R K M E N ’S D W E L L IN G S B Y T H E IN D IV ID
1891 U P TO T H E E N D OF T H E Y E A R 1913, T O G E T H E R
[Source: Amtliche Nachrichten des Reichsver

Loans

Ur­
in­
al

im
-

Name of insurance
carrier.

workmen’s

Unions of com­
munes (Provinces,
districts), com­
munes, savings
banks, and other
legal public in­
stitutions.

Public-welfare
building asso­
ciations.

er.

Amount.

on

Rate
of in­
ter­
est.

Amount.

Rate
o f in­
ter­
est.

familv

dwellings

to—

Employees (in­
sured persons).

Amount.

Employers.

Rate
of in­
ter­
est.

Amount.

Rate
of in-1
ter- j
est. |
---------1

INVALID ITY INSURANCE
INSTITUTES.

1
3
4
5
6
8
9

1
0
1
1
12

13
14

1
5
16
17

1
8

19
20

21
22
23
24
25
26

2
7
28
29
30
31

!

$911,342
East Prussia..................
520,430
West Prussia................ .
1,338,514
Berlin...............................
1,092,435
Brandenburg..................
1,141,264
Pomerania......................
37,961
Posen............................. .
190,257
Silesia............................. .
1, 767, 627
Saxe-Anhalt...................
Schleswig-Holstein.......
2,124,918
Hanover..........................
5,112,827
Westphalia.....................
8,131,923
3,129,040
Hesse-Nassau............... .
Rhine Province........... . 10,933,279
Upper Bavaria...............
1.360, 455
Lower Bavaria............. .
43,125
Palatinate..................... .
93 ,092
151,654
Upper Palatinate and
Ratisbon.
Upper Franconia.........
192,661
1.261,995
Middle Franconia.......
Lower Franconia and
Aschaffenburg.
Swabia and Neuburg...
690,613
Kingdom of Saxony... . 9,778,532
1,773.662
Wurttemberg........
Baden............................
1.367.007
Grand Duchy of Hesse
813,989
Mecklenburg.................
Thuringia......................
483,842
Oldenburg....................
119, 739
610,217
Brunswick....................
o
993
Hanse Towns...............
Alsace-Lorraine...........
1,136,926

92
4

Total....................... . 58,481,619

3 -31
3 -32
3 -3 5
3h H
3 -31!
2 £-31!
3 -i \
3 -323 -4
3 -32;
3 -41-'
3 -4 1
3 -3',
311
3 -:
-5
3.V
3 -31 .
3 -4
3 -31 1
!
|

$795,366
83,300
106,624
105,125
416,075
1,121,623
221,578
119,179
2,339,367
1,852,256
443,102
3,099,863
28,560
3, 570
38,O O
S
23,800

3 -31
3.’, -4}

3*~3'
10,758
3 -3 ’
4, 593
21 3r
*
94,242
3 -4 522,463
22-3-1!
55,038
3 —
34-!
3 -3fj 2,698,487
2,071,321
3 -4
783,357
3 -3|
3 -3J! 2,266, 382
93,201
3-}!
6,402
3 !
1,166,936
3
134,565
sv

3 -3|

$320, 509 3 -4
19, 302 31-4
35,593
4
66,370 31-4
857

33-4
3

4

3
3
3
3
3
3
3

- 3 1 1,272,967 3 -4*
-31
168,730 3 -3|
-3 i
-41
332,760 31-4
-4
-3 i
2,142
3
16,279 3 -3>
-3.1
4
38,342 3 -31
3 -4
3 -4 1
3 -31
31,106
3£
67,140 3 -4
140,515 3 H
5,712
31

3 -4
3 -4
3 -4
31-4
3|-4
31
3 -4

3,332
125,759
3,022, 982
5, 724,475
446,497

31-4
3M i
3 2-4
3 i-4
3£

97,580
926,643
26,499
54, 502
116, 929

3 ~4
31-4
3 -3 1
41-41
3|

185, 757
731,894
453,866

3 -4
3 -4 i
31

19,611
26,228
13,673
53, 550

3 -3*
3 -:-\\>
31—
1
; ' 4

3 -31

30,869

31- 4 1

49,980
3 -4
492,589
3 -4 1
652,263
3 -4 ;
399, 016
3-1
82,S72
31-4 j
!
28,560
3 -4 | 1,417,344
3 -3*
3 -3 1 !
3 -4 “
3 -3 A
366, 520

______

2 - 1.; j 21,229,169
1

2 -41 : 3,853,539 3 -41
j

33
34
35

36

37
38

Pension fund for work­
men of the Prussian
Hessian railroads.
North German Miners’
Pension Fund.
Miners7Society of Saatbriicken.
W orkm en’s P e n s i o n
Fund of the Royal
Bavarian Transpor­
tation Institutes.
W orkm en’s P e n s i o n
Fund of the Royal
State Railroads of
Saxony.
Miners’ General Pen­
sion Fund of Saxony.
W orkm en’s P e n s i o n
Fund of the State
Railroads and Salt
Mines of Baden.




4,432,642

3 -3 1

11,491
!

2,999

3

518,285

3

584, 718

3 l-

5,102

31

252,018

31

i
|
i
|

3 -4
3 -4
2 -31

3 -31
3 -4 '

ADMITTED INSTITUTES.

32

|
!
1
1
;

188,032
320,806
36,604

78,386
157,675

21—
41 14,522,670

$50,551

58,715

31-41- |

33,320 4 -4-i

i

1
1

27,370 3-2-4
109,305

31-4

)5

G O V E R N M E N T AID TO H O U SIN G ---- G ERM AN Y .
JA L C A R R IE R S OF T H E G E R M A N I N V A L I D I T Y A N D
ATT 11 T H E R A T E OF IN T E R E S T ON SUCH L O A N S .

O L D -A G E

)M

IN S U

icherungsamts, vol. 30, No. 3, Mar. 15, 1914.)
Loans on homes for single persons (lodging houses,
etc.) to—

Total loans
on workm en’s
family dwellings.

Public-welfare
building asso­
ciations.

Rate
Rate
of in­
Am ount. of in­
ter­
ter­
est.
est.

$2,077, 768
623,032
1.374.107
1,276,187
1,251,839
454,036
2,679,089
2,680, 398
2,299,134
10,483,441
12,055,500
4,357,641
16,315,803
1,482,216
91,440
1.228.108
341,125
447,833
1,801,702
199,991
841,505
11,323,523
5,475,406
7,545,000
1,460,287
28,560
2,106,554
877, 861
1,077, 756
2,295,843
1,534,315
98,086,998

$25,109
32,130
192,066
157,235
78,064
105,910
188,972
84,609
116,618

3 -4
3 -4 *
3 -4
3J-4
3 -4
2|-3f
3 —
L

2f-3f

-3§
3*
3 -3£
3t 6~4

3i

-3 f
3| -4
3 -4
3 -3;
n

3 -4
3 -4 i
3 -4 \
442,085 3} -4
59,500 j
3h
3 -4
3 -3 .] 1,808,181 3 -4

Unions of com­
munes (Provinces,
districts), com­
munes, savings
banks, and other
legal public in­
stitutions.

Am ount.

Total loans on
homes for
single persons.

Rate
Rate
Rate
of in­
of in­
of in­
Am ount.
ter­
ter­ Amount. ter­
est.
est.
est.

$59,500

3jj.

40,460

3J-4 j.
15,470

3 M I................!........ .

il

imjr.

. $116,620

5,474
279, 459
23,800
33,320
288,456

ar­
il-

Employers.

31

3,748

3£—
3fl
3|
3 -3 i
3 -3J

$25,109
32,130
308,686
216, 735
78,064
146,370
204,442
84,609
3* 125,840
279,459
465,885
92,820
2,096,637

31-31

1

3 ~3§

I 3
*

2

3 -3|
:3 * -4

3
4
5

31- -4
3i -4
3 -1
3 -3 f
3.V - 3 1
3| -4
3 -3-J
3 -4

6

3>
1

7

8
9
10

11
12
13
14
15
16
17

3-4
3 -4:

3 -3:
6,426

3 -4
3 -4
2 -4

18
19

6,426
161,364

|

161,364 |

20

8,925
3 -4
311,423 |3|
3 -A h
3
3 -4 j 520,863 1
287,028
19,040
3H
6,902
3 -4 j
25,806
3 —
3 -4 i
19,754 j
3 -4 I 200,634 '3
3 -4 * ! 167,076|3

-4
-4

11,662

3Mi;
3!
£

-4?»;5,025, 720

I

3J
-3f
-4*

8, 925
384, 656
520, 863
287,028
19,040
6,902
2 5 ,806
19,754
200,634 3
167,076 3

792,040

3 -4

147,501

3 1
*
-3|
-4.1

1

21

430
179
269
028
327
462
360
861
510
47'
391

23
24
25
26
27
28
29
30
31

22

,965,261

4,444,132

3 -3 f

4,444,132

32

95,033

3 -41

95,033

33
34

51S,285

3

584,718

35

3
t>

32,472

3^-4

37

361,323

3 i-4

3
*




196

B U L L E T IN

OF TH E BUREAU OF LABOR STATISTICS.

T O T A L A M O U N T O F L O A N S M A D E O N W O R K M E N ’S D W E L L I N G S B Y T H E I N D I V I D
1891 U P TO T H E E N D O F T H E Y E A R 1913, T O G E T H E R W I T H

Loans

on

workmen's

family

dwellings

to—

!
Mar­
gin­
al
num­
ber.

Name of insurance
carrier.

Public-welfare
building asso­
ciations.

Am ount.

Rate
of in­
ter­
est.

Unions of com­
munes (Provinces,
districts), com­
munes, savings
banks and other
legal public in­
stitutions.

Amount.

Employees (in­
sured persons).

Rate
of in­
ter­
est.

Amount.

Rate
of in­
ter­
est.

Employers.

Amount.

Rate
of in­
ter­
est.

ADMITTED INSTITUTES —

concluded..
Pension Fund of the ! ____________
Imperial Railroads.
40 General Miners’ So­
ciety of Bochum.
41 Invalidity, W idow and
O r p h a n Insurance
Fund of the Naviga­
tion Accident Assoj
ciation.
39

i

|
M ,

$3,430

Total

$5, 795, 764
64,277,383

2*-4i $14, 522,670

S




2H i

3H I

' ' 1
4g

3 ’-

182,946

3 -3§

Grand total...........

776,086

21,412,115

4,836,776 3|~4J

2 -4J 8,690,315 3

i

197

G O V ERN M EN T AID TO H O U SIN G ---- G ERM AN Y .
U A L C A R R IE R S OF T H E G E R M A N IN V A L ID IT Y A N D
T H E R A T E O F I N T E R E S T O N SU CH L O A N S — Concluded.

O L D -A G E

IN S U R A N C E

FR O M

Loans on homes for single persons (lodging houses,
etc.) to—

Total loans
on w orkm en’s
family dwellings.

Amount.

Public-welfare
building asso­
ciations.

Rate
of in­
Amount.
ter­
est.

Rate
of in­
ter­
est.

Unions of com­
munes (Provinces,
districts), com­
munes, savings
banks, and other
legal public in­
stitutions.

Amount.

Total loans on
homes for
single persons.
E mploy ers.

Rate
Rate
of in­
Amount. of in­ Amount.
ter­
ter­
est.
est.

Grand
total.

j
]
1

Rate
of in­
ter­
est.

|
|

j

$4, 776,0S6

i

41
-

3,436

3>

77fi.ftRfi
3,436

j

i

1
j 10,815,486
108,902,484

2-4J $5,025,720

... 1 10,815,4S6

3-4|




3-4J

$792,040

3-4 $147,501

3^-4 $5,965,261

3-4J!114,867,744

!

198

B U L L E T IN

OF TH E BUREAU OF LABOR STATISTICS.

The above table shows that the loans had been made almost
exclusively 011 famity dwellings, the loans on homes for single persons
amounting to only 5.2 per cent of the whole amount. Of the four
groups of borrowers receiving loans on family dwellings, the publicwelfare building associations received by far the largest amount—
270,073,038 marks ($64,277,383), or 56 per cent of the total loaned
on both classes of homes; the employees came next, loans having
been made them to the amount of 89,966,871 marks ($21,412,115),
18.6 per cent of the total loaned; then came the various legal public
institutions with loans amounting to 61,019,623 marks ($14,522,670),
or 12.6 per cent; while employers stood lowest on the list, having
received only 36,513,929 marks ($8,690,315), 7.6 per cent of the
total. At the end of the year 1913 loans on workingmen’s dwell­
ings were still outstanding to the amount of 423,907,746 marks
($100,890,044). The amounts outstanding at each specified rate of
interest were as follows:1
Rate of interest.

I
:

Amounts
loaned.

Per cent
of total.

Below 3 per cent.......................................................................................................................
3 per cent.....................................................................................................................................
Over 3 but below 3^ per cent...............................................................................................
3J per cent...................................................................................................................................
Over 3* but below 4 per cent...............................................................................................
4 per cent.....................................................................................................................................
Over 4 per cent..........................................................................................................................

$89,572
38,908,620
5,210,793
43,387,202
4,429,306
3,548,597
5,315,954

0.09
38. 56
5.17
43.00
4. 39
3. 52
5. 27

Total...................................................................................................................................

100,890,044

100.00

Loans at. rates below 34 per cent are steadily decreasing. At the
end of the year 1912 the amount of loans made at such rates still
formed 49.15 per cent of the total amount of loans, while at the end
of 1913 it w only 43.82 per cent. This decrease, which is noticeable
~as
since 1911, is to be ascribed to the effect of the decree of the imperial
insurance office of Ma}r 11, 1910, in which the directorates of the
insurance institutes were requested not to make any more new loans
below the rate of 3J per cent and to call in old loans made at a lower
rate whenever such action was practicable. This request was due
to the condition of the assets of the invalidity insurance institutes
and to the general increase in interest rates.
The insurance institutes of East Prussia, West Prussia, Berlin,
Brandenburg, Pomerania, Posen, Silesia, Saxe-Anhalt, SchleswigHolstein, Hanover, Westphalia, Baden, the Grand Duchy of Hesse,
Brunswick, Hanse Towns, Alsace-Lorraine, the pension funds for
workmen of the Prussian-Hessian railroads and the royal Bavarian
transportation institutes had up to the end of the year 1913 loaned
13,300,000 marks ($3,165,400) at rates of from 3-| to 4|- per cent,
to building societies of officials and other public-welfare building
1 Amtliche Nachrichtcn dc.s Reichs vorsielierungsamts, vol. 80, No. 3, Mar. 15, 1914, p. 331.




G O VERN M EN T AID TO H O U SIN G ---- G ERM AN Y .

199

associations for the erection of dwellings for nomnsured persons.
This amount is not included in' the above table.
In this connection should also be mentioned the endeavors of the
managers of the pension funds for workmen of the royal State rail­
roads of Saxony and of the imperial railroads to better the housing
conditions of their members. The former have erected 5 houses
with 128 apartments at a cost of 686,784 marks ($163,455), and the
latter 10 houses with 120 apartments at a cost of 586,619 marks
($139,615).
UNEARNED INCREMENT TAX IN AID OF HOUSING.

To render land speculation more difficult and to discourage its
practice as much as possible, and led by the principle that the com­
munity as a whole is entitled to a part of the increased value of land
created by its labor, the German Parliament enacted on February 14,
1911, a law laying a tax on the so-called unearned increment
(Zuwachssteuergesetz) . This law provides for a progressive tax on
all real estate transfers upon the unearned profits of the owner of
the property. Exempt from the tax is improved real estate not
worth more than 20,000 marks ($4,760), and unimproved real estate
not worth more than 5,000 marks ($1,190), provided neither the
seller nor his wife has an annual income in excess of 2,000 marks
($476) and is not in the real estate business. All public-welfare
building associations are also exempt. The revenue from this tax is
divided as follows: Fifty per cent goes to the Empire, 10 per cent to
the Federal States for administration and collection, and 40 per cent
to the communes. The Empire’s share of this tax for the first 11
months of the fiscal year 1912 was 18,310,394 marks ($4,357,873.77).
Article 58 of the law authorizes the communes to levy an additional
unearned increment tax, and a number of them are availing them­
selves of this authorization.
A large number of the communes use the revenue derived from the
unearned increment tax to acquire land and afterwards build work­
men’s homes on it, or grant to public-welfare associations the heredi­
tary right of construction on the land.
HOUSING ACTIVITIES OF PRUSSIA.

The Kingdom of Prussia even earlier than the Empire made efforts
to improve the housing conditions of its workmen and low-salaried
officials. As early as the reign of Frederick II the administration of
the State mines was actively caring for the housing and settlement
of its workmen. A t that period building grounds were given to the
mine workers free. Since 1842, however, in the mine district of
Saarbrucken, the practice has been introduced of giving building
premiums of from 900 marks ($214.20) upward, according to the



200

B U L L E T IN

OF TH E BUREAU OF LABOR STATISTICS.

size of the building lot, or of making building loans up to l.;500
marks ($357). No interest is charged on these, and they are repay­
able in annual installments. Since 1855 this practice has been in
force in Upper Silesia also.
The present activity of the Prussian Government as an employer
in improving the housing conditions of its workmen and officials is
nearly on the same plan as that of the Imperial Government. Its
activity is carried on from annual appropriations made by the diet
for the various administrative departments in the budget or from a
special State housing fund for which a legislative appropriation w
ras
first made in 1895, followed by other appropriations in subsequent
years.
STATE H OU SING FUND.

The Prussian State housing fund was created by the law” of August
13, 1895, in which the diet put at the disposition of the Government
5,000,000 marks ($1,190,000), to improve the housing conditions of
workmen employed in State establishments and of low-salaried State
officials. The law provided that for this purpose the Government
should either erect dwellings or make building loans, and that the
rents charged should be so determined that in addition to covering
the costs of administration and maintenance, they should also bring
in a suitable rate of interest on the invested capital and a refund of
the building costs. The housing fund was to be raised by issuing
bonds. Similar laws w
rere passed in subsequent years, and inclusive
of the appropriation of May 6, 1911, the total appropriations for the
housing fund amounted to 144,000,000 marks ($34,272,000). The
laws uniformly required that a report should be made to the diet as
to the disposition of the fund. Such a report was formerly made
annually, but is now required only at intervals of three years. The
classes to be benefited by the fund were increased in 1902 so as to
include not only workmen and low-salaried officials, but also officials
of intermediate salary grades ( Miitlere Beamte).
The fund is employed for the following purposes:
1. The erection of dwellings owned by the State.
2. Building loans to building associations for the erection of
tenements.
3. Small loans to employees of the mining, railroad, and construction
departments of the State on dwellings owned by them.
4. Loans on hereditary rights of construction (Erhbaurechte).
5. Loans on dwellings to individuals with reservation of the right
of refusal to prevent speculation in case of sale of the dwellings.
G Loans on small holdings held practically in fee, but subject to a
.
fixed rental (Zicergrentenguter).




GO VERN M EN T AID TO H O U SIN G ---- GEE M A N Y .

201

ERECTION OF DW ELLING S BY THE STATE FOR ITS EM PLOYEES.

State-owned dwellings are erected only in localities in which either
private building activity is not sufficient to satisfy the demand for
small apartments, or rents are disproportionately high, or sanitary
apartments at moderate rents are not available, and in which the
erection of such dwellings promises a moderate return on the invest­
ment. These dwellings are rented to Government employees of the
lowrest and intermediate salary grades. The employees, however, are
not obliged to rent these dwellings,"that matter being left entirely to
their free will. As the rents of the dwellings must bring in a sufficient
interest 011 the costs of the buildings, it was originally assumed that
they must be fixed so as to bring in 1 per cent for costs of administra­
tion and maintenance, one-half of 1 per cent for refund, and about 3
per cent as interest on the total investment. This requirement was
reduced in 1898 with the consent of the diet, by determining that 1 per
cent for costs of administration and maintenance and for refund, and
an average interest of 3 per cent on the total investment form a suffi­
cient basis for operation. Whenever an annual return of 4 per cent
upon the capitalization is not to be expected, the means of the housing
fund may not be used for the erection of such dwellings. If in such
circumstances the interests of the service require an improvement of
housing conditions, the administrations affected must include in their
estimates for the budget the amounts necessary for the erection of
State-owned dwellings for employees.
As to the kind of dwellings erected by the various administrations,
the memorandum presented to the diet in 1912 furnished the follow­
ing information:
The administration of the railroads built, in the main, houses with
3 stories and 6 apartments. Since the housing fund has been avail­
able for dwellings for employees of the intermediate salary grades, the
higher returns received from such buildings have rendered it possible
to erect in a larger measure 1 and 2 story detached and semi­
detached dwellings for employees of the lowest salary grades.
The construction of 4-story dwellings has been limited to a few
large cities (Berlin, Frankfort on the Main, and Stettin). The apart­
ments for employees of the lowest salary grades and workmen con­
sist of 2 or 4 rooms, inclusive of kitchen. The floor space of the
smallest apartments is 28.5 square meters (306.8 square feet), and
that of the largest 45 square meters (484.4 square feet). The 4 and
5 room apartments for employees of the intermediate salary grades
have as a rule a floor space of 68 square meters (732 square feet).
Among the dwellings constructed by the administration of public
construction (Bauverwaltung), those of one or two stories are most
numerous, as they correspond best to the needs of the workmen and



202

B U L L E T IN

OF TH E BUREAU OF LABOR STATISTICS.

low-salaried employees of this branch of administration. Houses
with 3 stories were built in only a few cities. What has been said
as to the number of rooms and floor space per apartment in dwellings
constructed by the administration of railroads applies also in a general
way to those built by the administration of public construction.
Two-family houses are the rule among the workmen’s dwellings
erected by the administration of mines, especially in the large mining
district of Saarbrucken. A number of 4-family houses have been
built at the Westphalian anthracite mines near Gladbeck and Stassfurt. In Upper Silesia, where the 2 and 4 family houses erected
did not bring in the returns required for a proper capitalization of the
investment, there have lately been constructed 8 and 12 f amily houses.
Most of the apartments for workmen in the Saar mines consist of 3
rooms, inclusive of kitchen. Their floor space is on an average 47
square meters (505.9 square feet) on the ground floor and 32\ square
meters (349.8 square feet) on the upper floor. A special outbuilding
contains as a rule a water-closet and a small barn. The 12-family
houses in Upper Silesia have a cellar, three stories, and an attic. The
floor space of the apartments varies between 37 and 40 square meters
(398.3 and 430.6 square feet). Houses designated for the use of the
officials contain, generally, 4 apartments, with 4 or 5 rooms, inclusive
of kitchen, and an average floor space of 98 square meters (1,054.9
square feet). A parcel of garden land or arable soil varying in size
goes, as a rule, with every apartment rented by the administration
of mines.
BUILDING LOANS, ETC.

The principal conditions for the granting of such loans as deter­
mined in 1895 and amended later in 1902 by joint decree of the min­
isters concerned are as follows:
The need of financial aid to a building association for the purpose
of remedying an existing scarcity of low-rent workmen’s dwellings
must be established by special investigation in the case of each appli­
cation for a building loan. This principle is to be strictly adhered to
and applications which do not seem justified by existing local condi­
tions are to be rejected.
Applications for loans are to be considered only from those build­
ing associations whose membership is largely made up of workmen
employed in Prussian Government establishments or of Prussian
Government employees (Beamte) of the lowest and intermediate
salary grades. The association must as a rule have at least 100
members with shares of a total value of not less than 30,000 marks
($7,140). The by-laws of the association must state as the exclusive
object of the association the provision of suitable low-rent apartments
for families of small means either by construction or by purchase of
sanitary dwellings. Dividends to members must be limited to 4



G O VERN M EN T AID TO H O U SIN G ---- G ERM AN Y .

203

per cent of their shares, and the by-laws must provide that, in case of
dissolution of the association, members shall receive only the face
value of their shares, and that any remaining balance of assets shall
be used for public-welfare purposes.
Loans are granted within a limit of from 50 to 90 per cent of the
net costs of ground and buildings as determined by an estimate of a
superior technical official, or within a limit of from 50 to 100 per cent
of the building costs only, determined in a like manner. In this con­
nection it should be remarked that lately as a rule loans have been
made to building associations only on second mortgage. The asso­
ciations are supposed to be able to raise without difficulty and at a
low rate of interest funds up to the limit of security required for
trust funds from private credit sources, and loans from the State
housing fund are granted on second mortgage for the balance of the
amount required. In this manner it is made possible to aid building
associations to a much greater extent than by loaning them the full
amount required for their operations.
The associations must pay 4 per cent annually of the full amount
of the original loan (3 per cent interest and 1 per cent refund), at
which rate the loans are entirely refunded in 47 years. Loans may
be made only on dwellings containing small apartments, i. e., having
not more than 4 rooms kitchen and accessories, two small rooms
( Kammern) to be counted, as one room. If, however, a building
association, to satisfy demands of its membership or for other rea­
sons, erects dwellings with apartments larger than specified above,
the administrations either refuse to grant a loan or limit it to an
amount corresponding to the building cost of that part of the dwell­
ings which is given over to small apartments.
The building association is obligated to reserve to employees of the
State such a number of apartments as corresponds to the proportion
which the State loan forms of the capital invested in small apartments.
The rest of the apartments may be rented according to the free will
of the association. If an association during a long period does not
comply with the above obligation, the loan may either be called in
or the rate of interest may be increased 1 per cent.
Applications for loans are to be directed to the provincial author­
ity in the district in which the association has its seat.
The provisions as to the documents and papers which must accom­
pany the application, the procedure in making loans, the registra­
tion of the loan, control of the Government, the giving of notice for
recall of the loan, etc., are nearly identical with those applying to
loans to building associations from the imperial housing fund which
have already been given in the sections relating to that fund.
Small loans have been made, with good results, on homes owned by
ordinary laborers of the mining, railroad, and construction depart­



204

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

ments. The maximum amount loaned on such security must not
exceed three-fourths of the building costs or 6,000 marks ($1,428) in
case of a two-family house. Annual payments must be made amount­
ing to 6 per cent of the total loan. Of these payments an amount
equal to 3 b per cent of the outstanding loan is regarded as interest,
while the remainder is applied to reducing the indebtedness. Loans
of this kind may be made only on first mortgage.
The administration of finances has granted to the housing asso­
ciation ( Wohnungsverein) of officials in Berlin the hereditary right
of construction on several parcels of ground of the Crown lands in
Dahlen, Berlin, and Duisburg. The association has erected dwell­
ings on these building sites and has requested loans from the Govern­
ment on the hereditary right of construction. Such loans have been
granted on the usual conditions made by the Government for real
estate loans. Loans on hereditary rights of construction (Erbbaurechte) are made up to the full value of the buildings erected. In loan
contracts of this kind made up to date the conditions for the refund­
ing of the loan have been so arranged that the entire loan is refunded
long before the hereditary right of construction becomes extinct.
The usual condition that the building loan must have precedence, as
a lien, of the ground rent has been omitted in the contracts, as the
State exchequer is not only granting the building loan but also owns
the ground.
Lhitil lately the department of the interior has as a rule made
loans only on dwellings which remain the property of building asso­
ciations and are rented to workmen and employees of the State.
Applications for loans from building associations which sell the
dwellings erected by them to the occupier, or from individual Govern­
ment employees, were generally rejected. This action was due to
the fear that the owners of such dwellings might exploit them by
speculative sale or by letting them at higher rentals, thus defeating
the purpose for which the Government credit was granted.
Special local circumstances may, however, make it seem desirable
to deviate from this rule in individual instances, especially those in
which individual State employees are to be provided with suitable
houses. In making such loans the department of the interior
requests in the first place that a public corporation or some other
solvent association guarantee the amount loaned as well as interest
and refunding payment; secondly, there must be granted to the
guarantor the right of refusal, and the guarantor on the other hand
must obligate himself in case of an intended sale of the dwelling
either to make use of his right of refusal or to cede this right on request
to the State. Reasons for the exercise of the right of refusal are:
(a) If the owner of the dwelling is more than 4 w6eks in arrears with
any of the agreed payments without having been granted a stay by



GOVERNMENT AID TO H O U SIN G — GERMANY.

205

the creditors; (b) if at any time within 100 years from the date of
sale of the dwelling the owner washes to dispose of it; (c) if the owner,
notwithstanding a written warning, does not himself occupy the
dwelling or is using it entirely or partly for industrial purposes, or
permits third parties such use, or rents rooms in the dwelling; 1
(d) if he encumbers the property with a further mortgage without
the consent of the owners of the first mortgage; (e) if he purposely
or by gross negligence injures the dwelling or lessens its value; (f) if
he fails to provide proper and sufficient insurance against fire; (g) in
case of a forced sale of the property, or bankruptcy of the owner;
and (Ji) if the owner makes additions to or alterations of the build­
ing without obtaining the approval of the guarantor of the loan.
It was thought that the creation of small holdings held practically
in fee by agricultural laborers, but subject to fixed rentals, as ap­
proved by joint decree of the ministers of finance and agriculture of
January 8, 1907, might also be adapted to settling individual State
employees on rural lands. This would not only make the employees
independent as far as the housing problem is concerned, but would
also promote, colonization in the eastern Provinces, which is one of
the chief social problems confronting the Prussian Government.
An experiment in this respect has been planned in the following
manner: State employees who wish to acquire such holdings (.Bentenguter) of a minimum size of 12.50 ares (0.3 acre) shall apply for them in the
manner prescribed in the above-mentioned decree. Loans are, as a
rule, granted on such holdings by rent banks up to 75 per cent of the
value and a further loan is then granted from the means of the
State housing fund. The employee has, in such a case, only to raise
that portion of the amount required which is not covered by mortgage
loans.
Up to October 1, 1911, loans of this kind were made as an experi­
ment on 29 holdings acquired by railroad employees in Jarotschin
and 1 holding in Schwersenz belonging to an employee of the custom
administration.
STATISTICS OF H OU SIN G W O R K OF PRUSSIA.2

The means appropriated by the diet for the housing fund w^ere
apportioned to the administrations of railroads, mining construction,
and of the interior and expended by them in the following manner:
The administration of railroads had up to October 1, 1911, re­
ceived 88,173,846 marks ($20,985,375.35) from the housing fund.
Of this sum 49,382,038 marks ($11,752,925.04) w^ere expended for
dwellings owned by the State, 37,179,793 marks ($8,848,790.73)
1 W ith the approval of the provincial authorities, this condition may be waived.
2 Sammlung der Druclcsachen des rreussischen Hauses der Abgeordneten. 21. Legislaturperiode, V .
Session, 1912-13. Prucksaehe No. 286.




206

BU LLETIN ' OF TH E BUREAU OF LABOR STATISTICS.

wore loaned to building associations, and 1,612,015 marks ($383,659.57) were used for small loans.
Altogether there were completed or in process of construction 1,432
State-owned houses with 10,750 apartments. Of these houses 141
with 637 apartments were to be rented to officials of the intermediate
salary grades, and 1,291 houses with 10,113 apartments were for
officials of the lowest salary grades, auxiliary officials, and workmen.
Building loans amounting to 37,179,793 marks ($8,848,790.73)
were made to 117 building associations. The associations aided by
the State had up to October 1, 1911, completed 13,851 apartments
and had in process of construction 1,037 apartments. Of the com­
pleted apartments, 11,192 were rented to officials and workmen of the
State as follows: 2,126 to officials of the intermediate salary grades,
3,551 to officials of the lowest salary grades, and 5,515 to auxiliary
officials and workmen.
For small loans to individual workmen and low-salaried officials
of the State railroads for the construction of houses owned by them
(one and two family houses) 1,612,015 marks ($383,659.57) had been
apportioned. With the aid of this amount 105 one-family houses
and 211 two-family houses had been completed, while 5 one-family
and 4 two-family houses were in process of construction.
For the administration of public construction 1,486,657 marks
($353,824.37) had been appropriated from the housing fund. With
the exception of 2,000 marks ($476) used to make a small building
loan to an individual employee, all the above amount was expended
for the construction of State-owned dwellings. There had been com­
pleted in 25 localities 54 dwellings with 188 apartments, of which 3
were rented to officials of the intermediate salary grades and 185 to
officials of the lowest salary grades and workmen.
The apportionments made from the housing fund for the adminis­
tration of mining amounted to 24,278,493 marks ($5,778,281.33).
By far the largest part of this amount— i. e., 21,694,493 marks
($5,163,289.33)— was expended for the construction of State-owned
dwellings, 1,394 houses with 4,835 apartments having been either
completed or being in process of construction. Most of the apart­
ments (4,518) were designed for workmen, only 317 being intended
for officials. The rents received from the houses which are com­
pleted and the costs of which have been definitely learned show~ an
average return of 4.22 per cent on the invested capital.
In the mining district of Saarbrucken there is a continued demand
for building loans from the housing fund by individual employees,
and 2,584,000 marks ($614,992) have been used in making such loans.
Employees aided in this manner had, up to October 1, 1911, con­
structed 987 dwellings.




G O VERN M EN T AID TO H O U SIN G — G ERM AN Y .

207

Of the 27,471,246 marks ($6,538,156.55) appropriated from the
housing fund for the administration of the interior, the entire amount,
with the exception of 80,000 marks ($19,040), was expended in build­
ing loans to 86 building associations. These associations erected
w~ith the aid of the housing fund 9,621 apartments up to October 1,
1911, and had on that date 648 apartments in process of construction.
On October 1, 1911, there w~ere housed in these dwellings 3,004 State
employees of whom 1,810 were officials of the intermediate salary
grades, 963 officials of the lowest salary grades, and 231 auxiliary
officials and workmen.
A loan of 80,000 marks ($19,040) was made to an individual Gov­
ernment employee on a group of houses erected by him in Waldbrol
to be rented as workmen’s dwellings. The loan was guaranteed by
the district.
The amounts apportioned up to October 1, 1911, from the housing
fund to the individual administrations and the manner in which the
money was used are summarized in the following table:
S U M M A R Y OF A M O U N T S A P P O R T IO N E D U P TO O C T O B E R 1, 1911, F R O M T H E P R U S S IA N
S T A T E H O U S IN G F U N D TO T H E I N D I V I D U A L A D M IN IS T R A T IO N S A N D M A N N E R
IN W H IC H T H E M O N E Y W A S D IS B U R S E D .

Name of administration.

Expen di­
tures for
erection of
State-owned
houses.

Loans to
building
associa­
tions.

Railroads
<511, 752,925
353,348
Public construction.......................................................................
5,163,289
Mining.......................... ......................................................................
Interior...............................................................................................

$8,848, 790

17,269,562

T o ta l........................................................................................

Other
loans.

Total.

"6,519,117

$383,660
476
614,992
19,040

$20,985,375
353,824
5,778,281
6,538,157

15,367,907

1,018,168

33,655,637

Up to May 6, 1911, the Prussian Diet had appropriated by means
of 13 special laws the sum of 144,000,000 marks ($34, 272,000) for the
State housing fund. The preceding table shows that of this amount
141,410,242 marks ($33,655,637.60) had been invested by October 1,
1911, as follows: The sum of 72,561,188 marks ($17,269,562.74), or
51.3 per cent, had been spent in putting up houses owned by the
State; 64,571,039 marks ($15,367,907.28), or 45.7 per cent, had been
loaned-to building associations, and 4,278, 015 marks ($1,018,167.57),
or 3 per cent, had been put into loans of the other kinds described.
As a result of these investments, by October 1, 1911, the State had
2,880 dwellings, containing 15,773 apartments, either finished or in
process of construction; the building associations had 25,157 apart­
ments, of which 14,196 were rented to State officials or workmen,
while individual employees of the State had built or were building
houses containing 1,527 apartments. In other wwds, the State
housing fund had been used to provide a total of 42,457 apartments.



208

B U L L E T IN

OF TH E BUREAU OF LABOR STATISTICS.

The individual Government administrations of Prussia as already
mentioned had endeavored long before the creation of the State
housing fund to improve the housing conditions of their workmen and
employees. This they did by use of the funds appropriated by the
diet in the annual budget for their current expenditures. These
funds are still used for this purpose in all instances in which returns
of at least 4 per cent per annum on the capital invested in the purchase
or construction of buildings or in building loans, as required for all
investments of means from the housing fund, are not to be expected.
Most noteworthy in this respect is the activity of the administration
of mines, which by the granting of building loans and building pre­
miums tries to induce the workmen themselves to build houses. This
policy of colonization of the State mines reaches back to the begin­
ning of the last century and has been continued with special success
in the mining district of Saarbriicken. The construction of houses
from Government funds for the purpose of renting them to workmen
had before the creation of the housing fund been practiced only in a
very limited manner. To be sure, private houses that were damaged
by mining operations frequently had to be acquired by the adminis­
tration, and were afterwards rented to miners, but this was done more
to obtain some returns from these Government-owned houses than
from a desire to benefit the workmen.
The plan adopted by the administration of mines consists in granting
a loan, generally of 1,500 marks ($357), and a premium of from 750
to 900 marks ($178.50 to $214.20), according to the size of the building
lot, to workmen who already own a building site. The loan does not
bear interest and must be repaid within 10 years after the completion
of the building in monthly installments, which during each year must
amount to 10 per cent of the total loan. These monthly installments
are deducted each month by the administration from the wages until
the loan is repaid in full. The premium is not to be repaid. Loan and
premium are, as a rule, granted together, and only in rare instances are
premiums granted alone. The building costs of a house are sometimes
lower than the total amount of loan and premium, so that savings
are made in the amounts designated for premiums. The amounts
saved in this manner are used to grant premiums without loans to
workmen who wish to build with means of their own. The workmen
to whom loans and premiums are to be granted are determined by
lot among the applicants, who as a rule are very numerous.
Applicants must comply with the following conditions: They must
have a well-regulated household, be of good conduct, have wife and
children, have complied with their military obligations, be of an age
not below 25 and not over 40 years, and be of good health. Appli­
cants may not already possess a house, nor have received previously




GOVERNMENT AID TO HOUSING---- GERMANY.

209

a building loan, and must be in possession of a building site within a
district determined by the mine authorities inside the limits of which
the construction of workmen’s dwellings may be promoted by the
granting of building loans and premiums.
The house to be erected must contain a floor space of at least 40
square meters (430.6 square feet) and must have in addition to a
kitchen at least 3 living rooms. Kitchen and living rooms must have
a minimum floor space of 32 square meters (344.4 square feet). With
the exception of the above conditions, the workman is given a free
hand as to the building plans. The building work itself, however, is
generally placed under the supervision and direction of a State
architect.
The loan is paid in installments after the beginning of building
operations, the amount of the installments depending on the progress
of the building work. As a rule, these amounts are not paid direct
to the person to whom the loan is granted, but in his presence and
upon his receipt to those parties to whom he owes money for work
performed on the building or for materials furnished for it. The
premium is as a rule paid after the completion of the building, but
advances may also be granted on premiums.
The owner of the dwelling must during the first 10 years after its
completion conform to certain conditions. He must occupy the
house himself. Rooms not used by him he may rent only to work­
men employed in the State mines. A saloon, restaurant, or store
may not be conducted in the dwelling. The dwelling may be
sold only to a workman employed in the State mines, and the mine
management must give its consent to such a sale.
In case of contravention of the above provisions, or in case the
purpose of the loan and premium that the dwelling be used for at
least 10 years as a miner’s home is no longer fulfilled, owing to the
resignation or permanent dismissal of the recipient of loan and
premium, the premium must be immediately refunded by the recip­
ient or by his legal heirs. An exception in such an instance takes place
only in case of death of the recipient of the premium or of his invol­
untary invalidity. But even in the two cases last mentioned the
dwelling may be sold or rented only to a miner of the royal mines.
According to a report 1 made by the minister of commerce and
industry to the diet under date of December 23, 1911, up to the
end of 1910 aid of this kind had been given to the extent of 7,775,735
marks ($1,850,624.93) in noninterest-bearing loans and 5,660,365
marks ($1,347,166.87) in premiums. As a result, 7,366 houses with
1 Sammliing der Drucksachen des Preussischen Hauses der Abgeordneten.
Session 1912-13. Drucksache N o. 4 8 .
66171°— B ull. 158— 15------ 14




21. Legislaturperiode, V .

210

B U L L E T IN

OF T H E BU REAU OF LABOR STATISTICS.

14,732 apartments had been built and were then owned by miners
employed in the royal mines of the district.
The colonization of miners in the mining district of Upper Silesia
has in a like manner been aided by the granting of noninterestbearing building loans and building premiums. The conditions to
be complied with by applicants are the same as those given above,
except that the period during which the owner of the dwellings must
conform to certain conditions is 15 years for the district of Upper
Silesia, while it is only 10 years for that of Saarbriicken.
Such loans and premiums have lately been granted in Upper
Silesia to a very limited extent only, because the price of land and
the building costs are so high that the loan and premium are rela­
tively too small, and the miners have moreover not sufficient capital
to maintain themselves in the possession of the houses.
In all the Prussian mining districts together there had been erected,
up to the end of 1910, 8,353 houses with 17,799 apartments owned
by miners employed in the royal mines. The administration of the
mines had aided therein by granting 9,586,160 marks ($2,281,506.08)
in noninterest-bearing loans and 6,096,860 marks ($1,451,052.68)
in building premiums.
The administration of mines purchases also, with funds from its
annual appropriation for current expenditures, houses of private
parties which have been injured by mining operations. These
houses are then rerented to mine workers at a very low rent. Data
as to the number of such houses purchased and the amount expended
for them are not available, as in the reports of the minister of com­
merce and industry to the diet all State-owned houses are enumer­
ated in one statement regardless of whether they were purchased
with means from current departmental appropriations or with means
from the State housing fund.
In 1905, the latest year for which figures are available,1 it appears
that of the entire force of miners employed in the royal mines, 22.5
per cent were provided with housing accommodations partly in
houses constructed by the miners themselves with the aid of noninterest-bearing State loans and premiums and partly in State-owned
dwellings rented to them.
In addition to aiding and promoting the building of houses by
the miners themselves and to purchasing family houses and renting
them to miners, the administration of mines has in a number of
mine districts built large lodging houses (Schlafhauser). Up to
April 1, 1905, 32 of these lodging houses had been erected at an
expense of 2,818,542 marks ($670,813). Of the 32 lodging houses,
27 with 4,869 beds are in Saarbriicken.
1 Sammlung der Drucksachen des Preussischen Hauses der Abgeordneten. 20. Legislaturperiode, II.
Session 1905-6. Drucksache N o. 86, p. 1550.




GOVERNMENT AID TO HOUSING---- GERMANY.

211

The origin of these lodging houses in Saarbrucken dates back to
the middle of the last century. The supply of labor from the local­
ities surrounding the mines became at that time insufficient as a con­
sequence of the increased development of the mines, and workmen
had to be obtained from more distant localities. These workmen
are during week days quartered in lodging houses built by the admin­
istration, and over Sunday they go home to their families. The
administration of railroads works hand in hand with the adminis­
tration of mines for this purpose by running special workmen’s
trains at very low rates.
The usual charge to workmen for the use of lodging houses is 2
marks (47.6 cents) per month, inclusive of bed linen, towels, light,
and heat. In some of the lodging houses the workmen may obtain
food and drinks at moderate prices, while in others, especially in
Saarbrucken, they are given the use of kitchens so that they may
cook their own meals.
In 1905 altogether 5.7 per cent of the workmen employed in the
royal mines made use of such lodging houses. The State’s annual
average cost o f maintenance of the lodging houses after deducting
the receipts for rent was 94,156 marks ($22,409.13).
For years the administration of railroads has used funds from the
appropriations made in its annual budgets to erect dwellings for officials
and workmen who must live near their work, and who either can not find
suitable dwellings there or can obtain them only on very unfavorable
terms. At the end of 1910 employees of the State railroads occupied
53,832 apartments provided by means of the State exchequer. In­
cluded therein are 8,984 apartments erected by means of the State
housing fund. Of the total number of 53,832 apartments 31,709
were assigned to employees as free service dwellings and 22,123 were
rented to them.
The report1 from which the above data are taken does not give
the expenditures of the administration for the dwellings erected for
its employees.
The administrations of river and harbor works and of the army
have also in many instances erected dwellings for the use of their
officials and workmen. The administration of the army has done this
on a larger scale than the others to provide suitable housing for the
workmen employed in its technical establishments (arsenals, gun
and ammunition factories, etc.). Recent statistics as to this activity
are not available.
i Bericht des Ministers der offentlichen Arbeiten vom 13. Januar 1912 iiber die Ergebnisse des Betriebes
der vereinigten preussischen und hessischen Staatseisenbahnen im Rechnungsjahr 1910. Sammlung der
Drucksachen des Preussischen Hauses der Abgeordneten. 21. Legislaturperiode, V . Session 1912-13. Drucksache N o. 29.




212

BULLETIN OF THE BUBEAU OF LABOB STATISTICS.

TAX EXEMPTIONS AND CONCESSIONS.
LEGISLATIVE MEASURES.

The efforts of the Prussian State to improve the housing condi­
tions of people of moderate means have not been limited to officials
and workmen in Government employment. A number of laws have
been enacted to benefit the general public in this respect. Of such
legal measures the following are especially worthy of mention:
1. The law of May 21, 1861, relates to the introduction of a general
house tax. According to this law, in rural communities in which
the tax is not assessed on the basis of actual rents, a reduction is to
be granted on dwellings of artisans, factory workers, etc.
2. The income tax law of June 24, 1891, according to which those
registered cooperative societies, including building associations,
whose business activity is limited to their membership, are exempt
from the income tax.
3. The occupation tax law (Gewerbesteuergesetz) of June 24, 1891,
according to which building associations, the object of which as
stated in their by-laws is the provision of sanitary low-rent dwellings
for their members, are exempt from such a tax, provided their busi­
ness activity does not include commercial transactions, such as deal­
ing in real estate, use of the associations’ available funds for banking
operations, etc.
4. The stamp tax law of July 31, 1895, which exempts from the pay­
ment of stamp taxes those stock companies, cooperative societies,
and associations with limited liability, the exclusive object of which,
as stated in their by-laws, is to provide sanitary and suitably equipped
dwellings for families of small means in especially erected or pur­
chased houses. Their by-laws must also limit the dividends to 4 per
cent of the stockholders’ or members’ shares and provide that in case
of a dissolution of the company or association the stockholders or
members shall receive only the face value of their shares and that the
rest of the assets shall be used for public-welfare purposes.
5. The law of September 20, 1899, containing administrative
provisions in pursuance of the civil code provisions in art. 86,
par. 1, No. VI, by which the public-welfare building associations men­
tioned above under No. 4 are exempt from court fees.
6. The law of July 28, 1902, providing for the forced consolidation
( TJmlegung) for building purposes of parcels of property in the city
of Frankfort on the Main, and two identical laws passed in 1911 for
the cities of Cologne and Posen.
7. The communal tax law ( Kommunalabgabengesetz) of July 14,
1893, which in article 10 amends article 15 of the law of July 2, 1875,
relating to the laying out and alteration of streets and squares in
cities and rural localities in so far as the costs of construction and




GOVERNMENT AID TO HOUSING-----GERMANY.

213

maintenance may be computed on other bases than the length of
the parcel's fronting on the street, especially on the basis of the area
which can be used for building purposes. Article 27 of this law
permits the levying of a special tax on building lots. The difficulties
connected with this manner of taxation have, however, been so
great that this legal provision has had very little practical appli­
cation.
ADMINISTRATIVE MEASURES.

The administrative authorities of Prussia have for years given
special attention to regulating the housing conditions of people
of slender means. Their activity in this direction is largely centered
in efforts to improve the housing conditions through sanitary and
building regulations. Such activity does not, however, come within
the scope of the present work. As far as administrative measures
relating directly to the erection of dwellings for people of slender
means and exemption from taxation or reduction of taxes for such
dwellings are concerned, the following should be mentioned:
1. A joint decree of the ministers of the interior and finance of
October 2, 1899, recommended to all communes the introduction of
special real estate tax regulations based on taxation of the estimated
value of the property in place of taxation of the annual income from
it, and with special privileges for public-welfare building associations
and house owners of limited means. Such a form of taxation has
since been adopted by a very large number of communes. In addi­
tion to preventing injurious land speculation, in a large number of
cities and rural communities with suburban character it has resulted
in exempting dwellings with small apartments from excessive
taxation.
2. A large number of communes have introduced a transfer tax
( Umsatzsteuer) on real estate transfers, which has proved an effective
means of checking unsound land speculation.
3. Numerous cities have issued building regulations that limit the
height of buildings for the central, intermediate and outlying city
districts, starting with a certain height for the central districts and
gradually lowering this limit in such a manner that in the outlying
districts dwellings may not have more than two stories. Such
measures prevent the high prices of land prevailing in the central
districts from extending to the intermediate and outlying districts,
and at the same time by tending to spread building operations over
a large area, facilitate the erection of sanitary small dwellings for
people of small means. Building regulations of this kind grant as a
rule far-reaching privileges for those constructing small apartment
buildings and family houses.




214

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

4. Regulations relating to the housing of workmen employed in
brickyards, stone quarries, pits, and other seasonable industries,
and of migratory workers in agricultural establishments have been
issued by the police authorities in numerous districts, and have
effected essential improvements in the housing conditions of such
workmen.
5. The communal savings banks have given considerable aid to the
movement for the improvement of the housing conditions of people
of small means by giving preference to applications for mortgage
loans on dwellings with small apartments. In the Provinces of
Hanover, Westphalia, and in the Rhine Province, the communal
savings banks have to a large extent acted as agents in procuring
such mortgage loans from the State insurance institutes.
6. A further effort to promote the erection of dwellings with sani­
tary and low-priced small apartments has been made in a joint
decree issued March 19, 1901, by the ministers of commerce and in­
dustry, public instruction, the interior, and agriculture. This decree
directs the supervisory authorities to use their influence and, if
necessary, to exercise pressure upon the communes to induce them,
wherever the housing conditions are unsatisfactory, to provide,
following the example set by the State, sanitary low-priced dwellings
for their low-salaried officials and their workmen or to give financial
aid to public-welfare building associations and to promote publicwelfare building activities by such means as remission and postpone­
ment of payment of costs of street and sewer construction, remission
of building department fees, gratuitous assistance and advice by
employees of the building department, subscription of shares and
procuring of low-rate mortgage loans, especially by use of surplus
funds of the communal savings banks, and by sale, at a low price, of
ground owned by the communes and postponement of payment of
the sale price. The attention of the authorities was further directed
to a suitable transportation and land policy of the communes in the
interest of improvement of the housing conditions and to efficient
organization of the building activity of private individuals and
building associations. A decree of the minister of public works of
April 27, 1913, directed the officials of the State building service to
aid all public-welfare enterprises engaged in improving the housing
conditions.
The housing conditions of people of small means were, in pursuance
of the ministerial decree of 1901, thoroughly investigated in a number
of medium-sized and small cities, and in those localities in which
unsatisfactory conditions were found to exist to a considerable
extent the supervisory authorities exercised their influence upon the
communal authorities to remedy these conditions. In a number of




GOVERNMENT AID TO H O U SIN G ---- G ERM AN Y ,

215

instances the activity of the supervisory authorities in this direction
has been successful.
What has been accomplished by the communes in the way of
building dwellings for people of small means and in aiding publicwelfare building associations is discussed in this work in a special
section.
HOUSING ACTIVITIES OF BAVARIA.
STATE PROVISION FOR HOUSING GOVERNMENT EMPLOYEES.

The Bavarian Government has in all instances where the interest
of the service required it provided service dwellings for its officials
and workmen. According to a memorandum submitted to the
Bavarian Diet in 1902 by the minister of finances, there were at that
time among the employees of the civil administration 2,416 statutory
officials (25.1 per cent) and 9,113 nonstatutory officials and work­
men (20.3 per cent) housed in State-owned service dwellings. Of
the employees of the military administration 1,584 married noncom­
missioned officers and subordinate military officials out of a total num­
ber of 1,833, and 284 subordinate officials out of a total number of
317, occupied service dwellings. In addition to these dwellings built
mainly in the interest of the service, the State has erected a consid­
erable number of dwellings for its employees and workmen in the
service of the military administration, the administrations of mines,
State studs, and State roads, and for the corps of gendarmes. These
dwellings were all erected with means from the annual appropria­
tions made in the budget for current expenditures of the various
Government departments.
Special legislation was enacted to improve the housing conditions
of employees and workmen in the service of the administrations of
State railroads and mines and of the post office department. The
housing conditions of the numerous employees and workmen of the
State railroads were especially in need of improvement and were re­
peatedly brought to the attention of the Bavarian Diet. It finally
on May 31, 1900, enacted a law putting at the disposition of the
Government the amount of 6,000,000 marks ($1,428,000), of which
2,000,000 marks ($476,000) were to be expended for the erection of
State-owned dwellings and 4,000,000 marks ($952,000) to be loaned
to building associations, the membership of which must be com­
posed exclusively of employees or workmen of the State railroads and
of the post office and telegraph department. A further appropria­
tion was made by the law of December 21, 1901, which granted
4,500,000 marks ($1,071,000) for the above purposes. A law enacted
on August 10, 1904, appropriated 828,000 marks ($197,064) for the
erection of State-owned dwellings, 72,000 marks ($17,136) for loans
to building associations and 400,000 marks ($95,200) for the erection




216

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

of dwellings for employees of the post office and telegraph department.
The extraordinary budget for the years 1908 and 1909 provided
1,854,600 marks ($441,394.80) for the erection of State-owned dwell­
ings for railroad employees, 1,457,300 marks ($346,837.40) for loans
to building associations, and 485,100 marks ($115,453.80) for the
erection of dwellings for employees of the post office and telegraph
department. Up to the year 1909 the Bavarian Diet made alto­
gether special appropriations to the amount of 15,597,000 marks
($3,712,086) to improve the housing conditions of the employees of
the administration of State transportation institutes, and 7,529,300
marks ($1,791,973.40) of this amount were used for loans to building
associations. A further appropriation of 10,000,000 marks ($2,380,000) was made in the budget for the years 1910 and 1911 to
provide dwellings for railroad employees and part of this amount was
to be used in making loans to building associations.
LOANS TO BUILDING ASSOCIATIONS.

Conditions for the granting of loans to building associations are
that the permanent object of the association must be the erection of
low-rent apartment dwellings for its members, and that its member­
ship must be composed of active employees of the State railroads.
The by-laws of the association may, however, also admit to member­
ship employees of the post office and telegraph department, widows
of members and retired employees. Two-thirds of the apartments
erected must, however, be reserved for active employees. The
shares must have a minimum value of 100 marks ($23.80) and be
correspondingly higher if the association erects dwellings with
better apartments than are required to meet the average needs
of workmen or low-salaried employees. The membership must, as a
rule, be at least 100. The association must show by an estimate that
its enterprises will bring returns of at least 5 per cent on the capital
invested, and that it either has funds of its own sufficient for the
payment of the building costs or has made long-term loans from third
parties for this purpose.
State loans may not exceed 80 per cent of the estimated value of
ground and buildings, and in no case 80 per cent of the actual cost
of these. Loans must be secured by a first mortgage and bear interest
at 3 per cent per annum. The loans are to be refunded by annual
payments of 4 per cent (3 per cent interest and 1 per cent refund).
The loan may be terminated by either party upon three months’ notice,
the Government, however, agreeing not to make use of this right of
recall as long as the association complies with its contractual obliga­
tions. The loan becomes immediately due in case of transfer of the
building, and in such a case the association is obligated, in considera­
tion of the low interest charged on the loan, to refund to the State an




GOVERNMENT AID TO HOUSING---- GERMANY.

217

amount representing interest at the rate of 1% per cent, beginning
from the date of the receipt of the loan. This last provision aims to
maintain the dwellings for the original purpose for which they were
erected.
In the previously mentioned memorandum of the imperial depart­
ment of the interior of 1904 the Bavarian Government describes its
experiences with respect to loans to building associations of State
railroad employees as follows:
1. The average building costs per apartment were lower for dwell­
ings erected by building associations than for those erected by the
administration of railroads.
2. The interest due on loans was always paid regularly by the
associations.
3. An exact determination of the local rents is especially impor­
tant, particularly in times of economic depression during which
rents are apt to be forced down. Experience has shown that apart­
ments erected by building associations are in good demand only
when offered at rates lower than the usual local rents.
4. The associations have, as a rule, conducted their affairs inde­
pendently, although it was necessary that the administration of rail­
roads, in consideration of its financial interest, and also to guard the
interests of the service, should assure itself a certain control over the
conduct of business. Minute supervision was required only in the
working out of the building plans, the conclusion of building contracts,
during the period of construction, and for the financing of the exe­
cuted enterprise. The supervision could be considerably limited
after the financing of the enterprise was completed and the contrac­
tual conditions relating to it were regulated. In this connection it
should be remarked that the employees and workmen of the State
railroads have on numerous occasions shown remarkable aptitude in
the management of the affairs of the associations.
In the same memorandum the Bavarian Government makes also
the statement that, at the end of the year 1902, of 51,113 persons
employed by the State railroads 8,728 occupied apartments owned by
the State and 1,150 were housed in association dwellings, so that alto­
gether about 19 per cent of the personnel of the State railroads were
housed in State-owned or association dwellings.
A law enacted August 10, 1904, provides for the granting of build­
ing premiums and building loans to individual workmen in the State
mines who intend to build homes on ground owned by them. Build­
ing lots are sold to them for this purpose by the State at a very low
price. The premiums vary in amount between 600 and 750 marks
($142.80 and $178.50), according to the floor space of the dwelling,
and are paid when the construction work, which must be executed in
accordance with plans approved by the administration of mines, is




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BULLETIN OF THE BUREAU OF LABOR STATISTICS.

finished. The amount of the premium must be secured by a noninterest-bearing mortgage which is canceled after 30 years, if during
this period the owner of the dwelling has complied with certain con­
tractual obligations restricting his right of renting or disposing of the
dwelling. Building loans must also be secured by mortgage and are,
as a rule, granted only if the applicant can show that in addition to a
loan from an insurance institute and the building premium he has
funds of his own equal at least to the amount of the building premium.
Such loans may not be recalled and do not bear interest for 10 years,
3 per cent interest being charged after the expiration of that period.
The loans must be refunded by an annual payment of at least 5 per
cent of their original amount. Up to 1909 60,000 marks ($14,280)
had been appropriated for the special fund created to grant these
building premiums and loans.
In 1900 the diet authorized the State insurance department to
use 470,000 marks ($111,860) of the reserve funds of the State fire
insurance institute to provide low-rent apartments for officials and
employees of the department, and this action was shortly after fol­
lowed by a further authorization for the use of 210,000 marks ($49,980)
for the same purpose. Suitable ground was purchased for this pur­
pose in Munich and four dwellings, each with eight apartments, were
erected on it.
A special appropriation of 300,000 marks ($71,400) was made in
the budget for the fiscal year 1902-3 to give financial aid to com­
munes, societies, associations, etc., in their efforts to improve housing
conditions. The amount appropriated was to be expended for the
promotion of an efficient housiiig inspection and for aiding publicwelfare building enterprises by granting subsidies to help defray the
costs of organizing such enterprises.
FINANCIAL AID THROUGH THE STATE AGRICULTURAL MORTGAGE
BANK.

A new method to provide financial aid for the improvement of
housing conditions was adopted by Bavaria when the diet on March
24, 1908, amended the law relating to the State agricultural mort­
gage bank (Landeskultur-Rentenanstalt) . This bank occupies a
special position among German land mortgage associations as being
(1) the only mortgage credit association constituted under the impe­
rial cooperative societies act, (2) the only cooperative society regis­
tered under that act which is empowered to issue mortgage bonds,
(3) practically founded and capitalized by the State, and (4) the only
registered cooperative society whose business is supervised by a royal
commissioner.
The bank was founded in 1896 with the special object of procur­
ing mortgage credit for small Bavarian landowners. The above-men­




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219

tioned amendment authorizes the bank to grant loans also for the
erection and sanitary improvement of dwellings with small apart­
ments for people of small means and for the colonization of agricul­
tural workers. This legislative measure is characterized by the
absence of any limitation of its benefits to Government employees.
The new law provides that small apartments are to be defined as
those which comprise not more than 3 rooms and kitchen, and that
loans may be made only to communes. Communes to which loans
are granted may either acquire land on their own account and erect
or improve dwellings, or they may use the funds obtained from the
agricultural mortgage bank for loans to legal public-welfare associa­
tions for the above-mentioned building, or for colonizatiori purposes.
Loans may be made by the bank for this purpose up to 90 per cent of
the value of ground and dwellings. Several large loans have been
made by the bank up to date to the communes of Munich, Bamberg,
and Lechhausen. The conditions were 3| per cent interest and
f to 1 per cent annual refund.
HOUSING WORK OF SAXONY.

The State of Saxony has been active only as an employer in im­
proving the housing conditions of people of small means.
The administration of the State railroads has for years given special
care to the housing conditions of its employees. Dwellings for
employees were originally erected only if the interest of the service
required that the employees should live in the neighborhood of the
stations or of their working places. When, however, with the rapid
increase of population and traffic, the rents of dwellings in the neigh­
borhood of large railroad stations increased steadily in the last
decades, and railroad employees were more and more forced to rent
dwellings at a considerable distance from the stations, the adminis­
tration could no longer restrict its activity in the matter of housing
to urgent service interests, but decided to offer to a larger number of
its employees the advantages of sanitary low-rent housing accommo­
dations situated conveniently to the stations. For this purpose since
1892 the diet has appropriated a total amount of 5,000,000 marks
($1,190,000), with which, up to the end of 1909, the administration
had erected 63 dwellings with 837 apartments, chiefly in the large
cities of Dresden, Leipzig and Chemnitz, in the vicinity of the newly
built switch yards and shops. In addition, since 1892 the adminis­
tration has erected or purchased 36 houses with 151 apartments at a
total expenditure of 960,000 marks ($228,480) from appropriations
made in the ordinary budget for costs of additions and renovations.
In the royal decree No. 28 of April 4, 1910, it is stated that the
administration of the State railroads will continue to erect dwellings




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B U L L E T IN OF T H E BU REA U OF LABOR STATISTICS.

for its low-salaried employees and workmen in all localities where
dwellings in the vicinity of the working places are not available in a
sufficient number or where the rents charged are not proportionate
to the income of the personnel, provided that the building costs do
not exceed 100,000 marks ($23,800) in each instance.
Guided by the example of the Empire, Prussia, Bavaria, and
Wurttemberg, the Diet of Saxony finally decided in 1910 to make an
appropriation of 1,000,000 marks ($238,000) for the budget period of
1910 and 1911 for loans by the administration of railroads to building
associations composed in the main of railroad employees. This was
followed by another appropriation of 1,000,000 marks ($238,000)
for the budget period of 1912 and 1913. The conditions for the
granting of loans are identical with those for loans from the Prussian
housing fund. (See p. 202.)
State funds are otherwise not used to improve the housing condi­
tions of people of small means, the Government believing that the
communes should, next to the employers and public-welfare societies,
be active in giving aid for the improvement of housing conditions.
This attitude of the Government has been expressed in a decree of
the ministry of the interior of March 31, 1903, addressed to the dis­
trict authorities, in which the latter are directed to promote the
activity of the communes in the following directions:
(a) Erection of sanitary and suitable dwellings by the communes
themselves for their low-salaried employees and permanently em­
ployed workmen.
(h)
Promotion of all efforts of public-welfare building associations
and similar enterprises directed toward providing sanitary small
apartments at a moderate rent. As means of such promotion are
to be considered: pertinent and expert advice, and if necessary even
more far-reaching gratuitous cooperation by communal officials; a
reduction of assessments for improvements and of fees to the building
department; credit aid through grant of loans at a low rate of interest;
subscription of shares or assumption of guaranty b}^ the commune.
Surplus funds of communal savings banks are designated as especially
adapted for such uses.
(c)
Provision of cheap building plots. For this purpose the com­
munes should pursue such a policy in regard to land as would
enable them to counteract any unsound and oppressive land and
building speculation. By increasing their own land holdings at
every opportunity, and by retaining the land already owned simply
for commercial reasons, they should be able to use a moderating
influence upon the real estate market. Communal land should be
sold only under special guaranty that it is to be permanently removed
from speculative dealings. Also, the grant of the hereditary right of




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221

construction to foundations and public-welfare associations is recom­
mended.
id) Provision of the best possible transportation facilities to the
outlying wards of large communes.
To keep informed on all progress in the activity of the communes
in this direction and on such bad conditions as still exist, the ministry
of the interior has ordered all the local State authorities as well as
the communal councils to submit regular reports every three years,
beginning with October 1, 1904.
In a lately issued decree the ministry of the interior expresses its
opposition to the practice of communes renting dwellings below cost.
The decree states that the erection of dwellings with small apartments
by communes, which in itself is very desirable, should take place only
on a basis of reasonable profit, as otherwise it w ould be impossible
x
for private building enterprises to compete with them, and the com­
munes alone would have the task of providing low-rent housing for
people of small means.
HOUSING WORK OF WURTTEMBERG.

The State of Wurttemberg had up to the year 1909 been active
only as an employer in improving the housing conditions of people of
small means. Service dwellings and dwellings to be rented have
been erected wdth State funds for Government officials, especially for
the numerous employees of the transportation service. On March 31,
1908, the administration of railroads owned 2,238 dwellings, with
3,156 service and 1,456 rented apartments, and the post office depart­
ment owned 134 dwellings, with 90 service and 137 rented apartments.
The total building cost of these dwellings amounted to 32.400,000
marks ($7,711,200).
The diet enacted on August 8, 1909, a law authorizing the ministry
of finances to make building loans up to a total amount of 350,000
marks ($83,300) to building associations in which officials of the inter­
mediate and lowest salary grades and workmen in the employment of
the State form a majority of the membership. The associations
must have at least 100 members and a minimum share capital of
30,000 marks ($7,140). Dividends to members must be limited to 4
per cent and the purpose of the association must be the erection of
low-rent dwellings for people of small means, these dwellings to
remain permanently in the possession of the association, or later on
to become the property of individual members of it. Loans are made
up to 80 per cent of the cost of ground and building and up to 100 per
cent of the building cost only. The rate of interest is 3| per cent,
and the loan is to be refunded by annual payments of 1 per cent of its
original amount. The loans may be terminated entirely or partially
by either party after three months’ notice. The State may, however,




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B U L L E T IN

OF T H E BU REAU OF LABOR STATISTICS.

make use of this right only after 10 years, provided the debtor com­
plies with his contractual obligations. The number of apartments
held at the disposition of Government employees must correspond to
the proportion which the State loan forms of the total investment in
the dwelling. Loans must be secured by a mortgage. It is, however,
not required that the security be a first mortgage; on the contrary,
the State prefers to make loans on second or third mortgages, so that
the funds appropriated for this purpose may be of benefit to a large
number of building associations.
The above law, in addition to providing for the granting of loans,
also authorizes the ministry of finances to guarantee, to a total
amount of 350,000 marks ($83,300), loans made by third parties to
building associations under the same conditions as those required
for State loans.
HOUSING WORK OF GRAND DUCHY OF HESSE.

Like other German State Governments, the Hessian Government
in its annual budget makes provision for the erection of State-owned
dwellings for the use of its low-salaried officials, for workmen in the
railroad service, and for agricultural workers employed on the Crown
lands.
In its direct financial aid for the improvement of housing condi­
tions of people of small means, the Hessian State occupies, however,
an exceptional position among the other States of Germany. Since
1902 its efforts to aid in the erection of dwellings with low-rent
apartments have not been confined to dwellings for Government em­
ployees, but have been planned to benefit all people of small means.
The carrier of this financial aid is the State credit bank (.Landeslerediikasse), a State institution forming a department in the minis­
try of finance.
The law of August 6, 1902, relating to the State credit bank au­
thorizes this institution to make building loans on dwellings erected
for the housing of people of small means in accordance with the pro­
visions of the housing law ( Wohnungsfursorgegesetz) of August 7,
^
1902. This law contains in its first part the conditions under which
such loans may be granted by the State credit bank. Dwellings for
people of small means are defined by the law as dwellings with apart­
ments consisting of not more than 3 rooms and kitchen. The law
provides that loans may not be made directly to building associa­
tions but only to communes or unions of communes, and no mort­
gage security is required from them. The granting of a loan must
be approved by the district authorities, the State housing inspector,
and the ministries of the interior and of finance. The communes may
after obtaining a loan either build on their own account or transfer
the loan to a public-welfare building association. If the creation of



GOVERNMENT AID TO HOUSING-----GERMANY.

223

a building association is not possible in a locality, the commune may
with the approval of the minister of the interior transfer loans ob­
tained from the State credit bank to private individuals of small
means. Loans made by communes to building associations must be
limited to 90 per cent of the ground and building costs. The interest
charge is based on the actual yield of the 3 J per cent Hessian Govern­
ment bonds according to current stock exchange quotations at the
time when the loan is made. To the rate of interest computed in this
manner is added one-tenth of 1 per cent. The rate of interest is there­
fore not fixed, but varies according to the fluctuations of the money
market, whereby the State avoids making loans at a rate below the
actual cost of the money raised through the sale of bonds. The regular
rate of interest may during the first 10 years after the coming in force
of the housing law be reduced one-half of 1 per cent in the case of
especially needy communes. The annual refund is fixed at a mini­
mum of three-fourths of 1 per cent of the original amount of the loan.
Interest is to be computed each year on the original amount of the loan,
and the amount in excess of the interest required on the actual balance
of the loan is to be applied as refund. Exemption from the payment
of refund may be granted for every fifth year, provided that the bor­
rower obligates himself to use the amount saved in this manner for
present or future repairs.
The granting of loans to building associations through the agency
of the communes involved too protracted proceedings and formali­
ties. The housing law was, therefore, after a campaign of agitation
on the part of the building associations, on July 1, 1908, amended so
as to permit direct loans from the State credit bank to building
associations up to 66§ per cent of the costs of buildings and ground.
The State credit bank had up to the end of the fiscal year 1907
granted loans to the amount of 255,100 marks ($60,713.80) for the
erection of low-rent dwellings.
Loans have been granted by the State credit bank only to communes
which were in actual need of financial aid. Communes in good
financial circumstances making application for building loans from
the State credit bank are as a rule directed by the district authorities
to the Hessian State mortgage bank, which makes such loans under
conditions similar to those of the State credit bank but at a higher
rate of interest.
The Hessian State mortgage bank (Hessische Landeshypothekenbank) established by virtue of a special act of July 12, 1902, occupies
a unique position among the State mortgage banks. It is a mortgage
bank company subject to the imperial mortgage bank act of July 13,
1899, but all its shares are held by the State, the communes, and
public savings banks, and the State guarantees its bonds. Like
other banks established under the act of 1899, it is under State




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BULLETIN OF THE BUREAU OF LABOR STATISTICS.

supervision, but it differs from them in that its business is not con­
ducted with the view of obtaining the highest possible profit, divi­
dends to shareholders being limited to 4 per cent. The bank, al­
though not a State institution proper, like the State credit bank, has
been granted exemption from all State and communal taxes and its
officials have the rights and duties of statutory Government officials.
The object of the bank according to article 2 of its company
agreement is: (a) The promotion of both rural and urban mortgage
credit and the disburdening of rural and urban estates within the
Grand Duchy of Hesse by the grant of amortization loans, not sub­
ject to recall, at a moderate rate of interest, especially to small
farmers and tradespeople; and (b) the promotion of communal
credit in the Grand Duchy of Hesse by the granting of loans to com­
munes and unions of communes.
In 1911 the capital stock of the bank was 9,000,000 marks
($2,142,000), of which 8,300,000 marks ($1,975,400) or 92 per cent
were paid in by the State and the balance by communes and public
savings banks. Participation of private capital is excluded. The
rate of interest charged on loans is 4J per cent. Loans are to be
refunded with annual payments of one-half of 1 per cent of their original
amount. The rate of interest may not be raised during the entire
duration of the loan, nor may the loan be recalled except in special
instances provided in the loan agreement. The debtor, however, has
the right to refund at any time the entire loan or parts of it.
Loans may not exceed one-half of the value of the property mort­
gaged except with the unanimous consent of the loan commission of
the bank. In such a case loans may be made on urban property up
to 60 per cent and on agricultural property up to 66§ per cent of its
value. Loans on building plots and such newly erected buildings as
are not completed and capable of making a return are not permissible.
The business report of the bank for the year 1912 shows that after
deducting all sinking fund payments, it had outstanding amortization
loans to a total amount of 157,519,633 marks ($37,489,672.65).
The total number of loans was 12,075, of which 11,357 were mortgage
loans and 718 were loans to communes.
During the year 1912 1,255 new loans were made. Nearly threefifths (708) of the number were for amounts of 5,000 marks ($1,190)
or less, nearly four-fifths (954) for amounts of 10,000 marks ($2,380)
or less, and about nine-tenths (1,066) for amounts of 15,000 marks
($3,570) or less. More than one-half of the loans (639) were made to
small business men, artisans engaged in trade on their own account,
and workmen (the latter were granted 205 loans), and over one-fifth
to farmers. Of the mortgage loans granted during 1912 809,319
marks ($192,617.92) were used for the erection of dwellings with




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225

small apartments consisting of not more than three rooms and kitchen,
and 38,411 marks ($9,141.82) for repairs of such dwellings.
Relatively few loans were made to communes and building asso­
ciations, which is to be accounted for by the fact that these may
obtain loans at a lower rate of interest from the State credit bank
and the State insurance institute.
The Grand Duchy of Hesse was the first Federal State of Germany
to introduce an unearned increment tax. A law of December 14,
1907, authorized communes with more than 3,000 inhabitants to
introduce such a tax by local statute with approval of the ministries
of the interior and finance. This approval may also be given to
communes with less than 3,000 inhabitants, provided special condi­
tions show the need of such a tax. The tax may be levied in all cases
of property transfer other than by inheritance. The tax may not
exceed a rate of 20 per cent of the increase in value where this increase
is less than 60 per cent, and 30 per cent of the increase is fixed as a
maximum rate. The rate of taxation is to be reduced to two-thirds
if from 10 to 15 years have expired since the transfer of the property,
and to one-half in case of possession during more than 15 years. An
increase in value of less than 10 per cent is exempt from the tax; the
tax is, however, computed from the entire increase whenever the
same amounts to 10 per cent of the value or more.
The housing law of Hesse mentioned on a preceding page not only
provides financial aid for the improvement of housing conditions,
but has also centralized the housing inspection of the State by creating
in the ministry of the interior a bureau of housing inspection with a
State housing inspector at its head. The latter’s duties in addition
to the supervision of the housing inspection proper include also:
The advising and assisting of public-welfare building associations in
all their efforts directed toward the improvement of housing condi­
tions for people of small means; arousing the interest of communes,
employers and workmen in the erection of sanitary low-priced
dwellings; and the approval of applications for building loans from
the State credit bank as well as seeing that such loans are used in
accordance with the provisions of the housing law.
Another noteworthy provision of the housing law is that of article
9 which provides that in case a majority of the rooms in a dwelling
have been condemned by the housing inspectors and the tenants have
been turned out, the communes shall have a right to expropriate the
building for the purpose of erecting in its place a sanitary low-rent
dwelling for people of small means, provided that its owner does not
comply with a request to remodel or demolish the dwelling.
6 6 1 7 1 °— Bull. 158— 15--------15




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BULLETIN OF THE BUREAU OF LABOR STATISTICS.

The ministry of the interior has in a considerable number of cases
approved the creation of special communal funds for the acquisition
of ground to be used for the erection of sanitary low-rent dwellings.
HOUSING WORK OF GRAND DUCHY OF BADEN.

The Government takes the attitude that the erection of new dwell­
ings for people of small means should be left to speculative private
building enterprises and employers, as well as to the public-welfare
activities of communes and associations for mutual aid. The direct
activity of the State has therefore been entirely restricted to pro­
viding suitable housing for its employees and workmen; in this
respect, however, its activity has been very extensive.
To provide suitable housing for its officials, especially for those of
the lowest salary classes, the Government either erected new dwell­
ings or rented them from communes, corporations, or private parties,
and assigned them to its employees either as service dwellings
or more often as a charge against the housing money (Wohnungsgeld)
due them according to their salary grade. Housing for employees
has been provided in this manner not only where the interest of the
service required it, but also in localities where apartments suitable
for employees are either not to be found at all, or only at a rental
which is out of proportion to their housing money.
During the years 1894 to 1903, inclusive, the diet appropriated
altogether 1,648,820 marks ($392,419.16) to be expended for the
above purpose by the administrations of justice, of the interior, and
of finances. Of the classes of low-salaried officials of the above
administrations benefited by these appropriations, there are to be
specially mentioned: Prison guards, policemen, gendarmes, the per­
sonnel of hospitals and asylums, and of the workhouse and reforma­
tories, supervisors of public roads, bridge tenders, customhouse
inspectors, and forest rangers. During the same period there had
been appropriated for the administration of State railroads 3,447,300
marks ($820,457.40) for dwellings for employees of the intermediate
and lowest salary classes and 588,400 marks ($140,039.20) for dwell­
ings for workmen. The first-named amount does not include funds
appropriated for dwellings constructed in connection with the build­
ing of new lines and large stations. At the present date service
dwellings are provided for all station agents, shop superintendents,
road masters, freight handlers, telegraphers, station masters, car
inspectors, gatemen, and storekeepers, in whose cases it is more or
less in the interest of the service that they should live in the station
buildings or near them. Of 1,666 track guards and switch tenders
there were only 150 for whom free service dwellings were not pro­
vided. Other employees of the above-named classes were provided
with quarters by the State only where privately owned apartments




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227

were either not to be had at all or only at a rental out of proportion
to the housing money of the employees.
Since the coming in force of the new law regulating the housing
money there is less need of State aid for the housing of officials.
The erection of dwellings for workmen has been limited to the four
stations of Mannheim, Rheinau, Neckargemund, and Kehl Hafen.
An indirect form of State aid is found in the law of May 6, 1899,
relating to the tax on real estate transfers, which, in article 33, No. 6,
exempts all public-welfare building associations from the payment of
such a tax. The income-tax law of September 20, 1900, exempts in
a similar manner building associations registered as cooperative
societies with limited or unlimited liability.
HOUSING WORK OF GRAND DUCHY OF MECKLENBURGSCHWERIN.

Since the State, in the years 1890 to 1894, took over the private
railroads, the grand-ducal administration of railroads has steadily
promoted the policy of assigning service dwellings to officials of the
intermediate and lowest salary classes, especially to track guards.
Up to the end of 1903 there had been expended for the erection of
new and improvement of old service dwellings a total amount of
764,000 marks ($181,832). In that year 132 service dwellings were
available for officials of the station service and 663 for track guards,
switch tenders, etc. A garden and a plot of arable land are allotted
with every service dwelling, station officials being allowed 1,100
square meters (11,840 square feet) of land, while track guards and
switch tenders are allowed from 1,600 to 2,200 square meters (17,222
to 23,681 square feet).
The Government developed also a noteworthy activity in providing
more sanitary and roomy dwellings for handworkers and day laborers.
It colonized them as cottagers (Hdusler) in rural districts by selling
them Crown lands. Each cottager is sold 5 ares (J acre) for his house
and courtyard, and in addition he is granted a hereditary lease
(Erbpacht) for 15 ares (f acre) of arable land. Up to 1906, 11,274
cottagers were colonized in this manner. In a circular letter of Feb­
ruary 16, 1907, the grand-ducal ministry of finance ordered all Crown-land agents (.Domanialdmter) to promote to still greater
extent this colonization of cottagers, a grand-ducal decree of February
17, 1907, having granted very favorable conditions for mortgage
loans on such cottages from funds of the administration of Crown
lands. Such loans may be granted up to three-fourths of the value
of the property as estimated by the fire insurance institutes at a rate
of interest of 3J to 4 per cent.




228

B U L L E T IN OF TH E BU REAU OF LABOR STATISTICS.

HOUSING WORK OF GRAND DUCHY OF OLDENBURG.

The State Agricultural Improvement Fund has been authorized by
the diet to guarantee the loans which the State insurance institute
of Oldenburg grants for the erection of dwellings for agricultural
laborers up to the full insurance value of the buildings.
The grand-ducal ministry of the interior has lately issued the follow­
ing announcement:
The ministry has funds at its disposal for the promotion of the erec­
tion of urban and rural one-family dwellings. Such dwellings must
be occupied by the owner himself and have connected with them an
area of garden or arable land corresponding to local conditions. The
State Credit Institute of Oldenburg is authorized to make loans on
such property up to three-fourths of its total value and the State
exchequer assumes part of the interest of these loans.
The law of January 11, 1897, relating to public-welfare building
associations, grants exemption from all court fees and stamp taxes
to such associations.
HOUSING WORK OF DUCHY OF BRUNSWICK.

The diet in 1892 appropriated 780,000 marks ($185,640) for the
erection of family houses for agricultural workmen employed on
Crown lands. A further amount of 51,000 marks ($12,138) was
appropriated for the same purpose in 1902. The lessees of Crown
lands on which such dwellings have been erected with State funds
must annually pay 3 per cent interest on the building costs.
An amount of 8,800 marks ($2,094.40) is annually appropriated
from State funds for the purpose of granting building premiums.
Premiums of 300, 200, and 100 marks ($71.40, $47.60, and $23.80) are
granted for dwellings which are erected in rural communes by persons
of the working classes for their own use or for rental to working
people. Such grants are conditioned on the neediness of the person
erecting the dwelling and on compliance with certain building speci­
fications.
A Government subsidy of 1,000 marks ($238) has been granted to
the Brunswick building association.
HOUSING WORK OF DUCHY OF SAXE-MEININGEN.

The Government was given in 1901 the disposition of a fund of
350,000 marks ($83,300) created from State and Crown land revenues,
for the purpose of making building loans on sanitary low-rent dwell­
ings for people of small means at a rate of interest lower than the
current rate. Loans from this fund have repeatedly been made to
communes which reloan them to people of small means and to build­
ing associations. The rate of interest fixed for such loans was 2 to




GOVERNMENT AID TO HOUSING-----GERMANY.

229

2J per cent and the refund 1J to 2 per cent. Communes which
granted loans were obligated by the Government not to make any
conditions in reloaning the money more burdensome than those of
the original grant.
HOUSING WORK OF DUCHY OF SAXE-COBURG AND GOTHA.

The Building Association for Workmen’s Dwellings in the city of
Gotha has been granted building loans by the Government from State
funds to the amount of 200,000 marks ($47,600). Part of these loans
were made without any interest and part at a very moderate rate
of interest. The ducal State mortgage credit bank in Coburg has
made loans of an equal amount on workmen’s dwellings at a rate of
interest of 3^ per cent, with an annual refund of from 1 to I f per cent.
HOUSING WORK OF SCHWARZBURG-SONDERSHAUSEN.

The administration of the princely Crown lands has for years been
erecting dwellings for its workmen. The lessees of the Crown lands
must pay 2f to 3 per cent interest on the capital invested in work­
men’s dwellings erected by the administration on such lands.
The Prince of Schwarzburg-Sondershausen gave on April 23, 1902,
from his privy purse 50,000 marks ($11,900) for the creation of a
workmen’s housing fund. This fund is to be used to provide low-rent
dwellings for people of small means living in the principality; work­
men permanently employed in the princely forests or in the State or
domanial establishments are to be given the preference when these
buildings are rented. The fund may be employed for this purpose in
the following three ways:
1. Small dwellings may be erected by the fund and given over to
proper applicants at first on a rental basis. After the occupier has,
however, paid in rent one-half of the value of the dwelling, it becomes
his property if he either pays the balance of the value in cash or gives
a mortgage for it. Small dwellings are defined as one or two family
houses which do not cost more than 4,000 marks ($952) inclusive of
the value of the ground. The annual rent is to be 4 per cent of the
sale price agreed upon.
2. Hereditary rights of construction may be granted against pay­
ment of an annuity on ground already improved by dwellings, or on
unimproved ground conditioned on the immediate erection of dwell­
ings. Such grants are to be made for 70 years against annual pay­
ments of an acknowledgment fee of 3 marks (71.4 cents) for the use of
the ground and 3| per cent interest on the building loan granted or
on the value of already standing buildings. Building loans may be
made up to 95 per cent of the building costs.




230

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

3.
The administration of the housing fund may grant loans for
purchase of building lots and erection of dwellings up to 90 per cent
of their value. It may also procure such loans for third parties from
the State Insurance Institute, Thuringia, or the State mortgage
credit bank, and guarantee them or supplement them from the
housing fund up to 90 per cent of the value of ground and dwellings.
Cn such loans the administration demands 3 per cent interest, with
1 per cent annual refund, and reserves the right of refusal for 15 years.
The loan may after 10 years be terminated by either party on three
months’ notice. The administration, however, may recall it at any
time in case of gross neglect of the property.
The law of March 19, 1904, enlarged the former agricultural
mortgage bank into a State mortgage credit bank, authorizing it to
make loans to communes against issue of debentures and to make
mortgage loans on real estate to private parties. Real estate mortgage
loans may be made by the bank up to 50 per cent of the officially
estimated value of a property. Such loans bear interest at the rate of
4J per cent and are to be refunded by payments of 1 per cent per an­
num. The bank also procures mortgage loans from the State In­
surance Institute Thuringia, and in that case charges interest at the
current rate fixed by the institute, plus one-fourth of 1 per cent for
costs of administration.
HOUSING WORK OF SCHWARZBURG-RUDOLSTADT.

The State mortgage credit bank grants building loans to persons
of small means who are insured against invalidity in a similar manner
to the bank of Schwarzburg-Sondershausen by procuring the means
from the State Insurance Institute Thuringia.
HOUSING WORK OF MUNICIPALITIES.

The imperial statistical office conducted in 1909 an exhaustive
investigation of the activity of German cities in improving housing
conditions and published the result in 1910.1 The investigation em­
braced 106 cities; included in these were all cities which according
to the census of 1905 had a population in excess of 50,000 inhabitants,
and in addition a number of smaller cities which had taken especially
noteworthy measures to solve the housing problem. The above publi­
cation has been extensively used in compiling the following data:
FOR THEIR OWN EMPLOYEES.

Of the cities included in the investigation 42 answered in the
affirmative the question whether they provided housing for workmen
i Wohnungsfursorge in deutschen Stadten.
flir Arbeiterstatistik.




Berlin, 1910.

Bearbeitet im Kaiserliclien Statistischen A m te, Abteilung

GOVERNMENT AID TO HOUSING-----GERMANY.

231

in their employment. Most active in this regard were the cities of
Frankfort on the Main, Essen, Cologne, Kiel, Diisseldorf, Munich, and
Stuttgart.
Frankfort on the Main has provided 21 service dwellings for work­
men in the employment of the city. These service dwellings are
rented to them at the very low rent of 66 to 100 marks ($15.71 to
$23.80) for 2-room apartments, and of 120 to 140 marks ($28.56 to
$33.32) for 3-room apartments.
Also, the city owns 62 dwellings with 241 two-room, 51 three-room
and 2 four-room apartments, which are rented to city employees
and workmen. The average rent for the two-room apartments is
276 marks ($65.69), for three-room apartments 432 marks ($102.82),
and for four-room apartments 450 marks ($107.10).
Essen has 136 apartments of 2, 3, and 4 rooms at its disposal,
which it rents at a very low rental to workmen employed in the
communal gas and water works, stables, and abattoir.
Cologne owns 28 houses, with 130 apartments, costing 533,327
marks ($126,931.83), the majority of which are rented to workmen
employed by the city.
In Kiel the city owns 13 dwellings, with 124 apartments, costing
492,475 marks ($117,209.05), which are by preference rented to
workmen employed in the gas, water, and street-cleaning depart­
ments.
The city of Diisseldorf owns 20 houses, with 141 apartments, costing
1,066,000 marks ($253,708). Part of these apartments are rented
to workmen in the employment of the city.
The city council of Munich in October, 1909, appropriated 934,000
marks ($222,292) for the erection of 15 houses, with 175 apartments,
to be rented to city employees and workmen.
In Stuttgart the city owns 13 houses, with 104 apartments (12
one-room, 81 two-room, and 11 three-room apartments), which are
rented to city employees and workmen at rents varying from 150 to
384 marks ($35.70 to $91.39).
The complete data of the 42 cities as compiled by the imperial
statistical office show that most of the apartments provided by
cities for their own workmen were two-room apartments. The rent
charged is in nearly every instance lower than the prevailing local
rents for apartments of corresponding size. The conditions of the
leases do not as a rule differ from those in ordinary private leases.
Rents are generally to be paid monthly in advance. In most leases
it is stipulated that either party may end the tenancy at one month’s
notice. Most of the leases prohibit the subletting of rooms.




232

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

FOR THE GENERAL WORKING CLASSES.

Of the cities included in the investigation of the imperial statis­
tical office, 15 have erected dwellings which are rented to the general
working classes and people of small means, instead of only to work­
men in the communal employment. Of these cities, 8 are in Prussia,
4 in Alsace-Lorraine, 2 in Baden, and 1 in Saxony.
The following table shows the number and cost of houses erected
and the number of apartments they contain:
N U M B E R A N D COST O F D W E L L I N G S E R E C T E D B Y G E R M A N C IT IE S F O R T H E U S E OF
T H E IR G E N E R A L W O R K I N G P O P U L A T IO N , A N D N U M B E R O F A P A R T M E N T S C O N ­
T A I N E D IN T H E M .
[Source: Wohnungsfiirsorge in deutschen Stadten. Bearbeitet im Kaiserlichen Statistischen A m te,
Abteilung fur Arbeiterstatistik. Berlin, 1910, p. 477.]

Number
of
dwell­
ings
erected.

Number
of
apart­
ments
con­
tained in
them.

17
4
3
2
7

100
24
26
16
48

1103,468
14, 708
15,151
17,946
42,078

Diisseldorf.................
Essen..........................

20

141
114
56

253,708

B onn...........................
R em sch eid..............
Chemnitz...................
M annheim................

3
10
4
4

20
29
24

26.299
47,600
32,445
42,339

Freiburg....................
Strassburg.................
M iihlhausen............
M etz............................

66
13
35
5

222
134
166
27

234,192
126,140
173, 740
26,180

Colmar........................

2
1

8

9,520
7,568

City.

Gleiwitz..................... 1
Flensburg..................
Cassel..........................
Barmen......................

1

Total
cost.

Remarks.

Old houses purchased and rebuilt.
Houses newly erected.
Rented exclusively to workmen and low-salaried
officials.
Rented in part also to communal workmen.
Administered by the city's welfare office.
Rented by the Krupp Foundation, which is ad­
ministered b y the city, to workmen and lowsalaried officials.
Erected by the poor-law board.
The city has in addition taken over from a dis­
solved building association 29 houses, with 63
apartments, at a cost of $46,172, inclusive of
repairs.

Part of the apartments are rented to communal
workmen.
Erected by the city.
Erected by the poor-law board.

Of the cities mentioned in the preceding table there are five, namely,
Freiburg, Miihlhausen, Diisseldorf, Strassburg, and Essen, which have
been especially active in erecting workmen’s dwellings.
The activity of Freiburg is especially noteworthy, both because it
has done more than any other German city and because it began the
erection of workmen’s dwellings at a very early period. As early as
1862 and 1863 the city erected from its improvement fund a number
of small one-family dwellings to be sold on installments at cost to
low-salaried officials, artisans, workmen, widows, etc., in order to
provide these classes of the population with cheap homes. This
enterprise, however, did not meet with success, as these dwellings are
no longer the property of that part of the population for which they




GOVERNMENT AID TO HOUSING---- GERMANV.

233

were intended. After having given financial aid in the seventies to
a building association, the city turned again in 1886 to the erection
of workmen’s dwellings for its own account and on its own grounds.
The city council appropriated on March 11 and May 13, 1886, the
amount of 201,000 marks ($47,838) for the erection of 16 three-story
dwellings and for the necessary street and sewer construction. A
further appropriation of 183,000 marks ($43,554) was made on March
1, 1889, for the construction of another row of 16 dwellings, situated
opposite to those built from the first appropriation. These latter
dwellings were architecturally superior to those first built. The
further erection of 16 dwellings in another street was made possible
by another appropriation on July 25, 1895, of 245,000 marks ($58,310).
These showed further architectural improvements, more of the dwell­
ings being detached and their exterior and interior fittings being of a
better quality. After having expended in this manner 629,000 marks
($149,702) on these three groups of houses and having erected 168
sanitary and suitable apartments, the city council approved in 1898
the erection of 33 more dwellings, at a total cost of 610,000 marks
($145,180). For various reasons, up to the middle of the year 1909
only 344,000 marks ($81,872) had been expended from the last appro­
priation and 18 dwellings with 54 apartments had been erected. The
city of Freiburg had, therefore, up to the middle of the year 1909 alto­
gether built 66 houses, with 222 small apartments.
Most of the houses have three stories and are provided with an
attic, but a few are four stories high. The apartments are all sepa­
rated and consist of from one to three rooms, kitchen, toilet, and
pantry, with cellars and garden space.
For every 12 apartments there is a laundry'provided with running
water and with a separated bathroom. Each kitchen has running
water. The toilet rooms are furnished with water-closets with flush
and are connected with the city sewers. The rents for these apart­
ments vary according to their size from 10 to 33 marks ($2.38 to
$7.85) per month. Leases may be canceled at one month’s notice.
The renters are workmen, artisans, low-salaried officials, and widows.
The apartments are in special demand by families with numerous
children.
A statement of the income from these communal workmen’s dwell­
ings issued for the year 1908 shows that the gross income from rents
was 57,477.50 marks ($13,679.65). From this amount must be de­
ducted 36,900 marks ($8,782.20) for 3f per cent interest on the build­
ing costs, 557.81 marks ($132.76) for taxes, and 12,799 marks
($3,046.16) for maintenance, water tax, janitor service, etc. The
net profit for the year 1908 was, therefore, 7,220.69 marks ($1,718.53),




234

BULLETIN OF THE BUREAU OF LABOR STATISTICS.

or 0.73 per cent on the capital of 984,000 marks ($234,192) invested
in the dwellings.
The city magistracy (Stadtrat) on May 16, 1909, submitted to the
city council an extensive memorandum recommending to the city the
erection of more workmen’s dwellings and at the same time defending
the city’s policy in this respect against unjustified criticism.
MUNICIPAL LOANS FOR THE ERECTION OF W O R K M E N S DWELLINGS.

The investigation of the imperial statistical office shows that 26
cities, with a population in excess of 50,000, and 7 smaller cities have
promoted the erection of workmen’s dwellings through the granting
of communal loans for this purpose. Of the 26 large cities, there are
14 in Prussia, 3 in Bavaria, 1 in Saxony, 2 in Wurttemberg, 2 in
Baden, 1 in Brunswick, and 1 in Alsace-Lorraine; included with them
are also the sovereign cities of Liibeck and Hamburg. Of the 7
smaller cities there are 3 in Prussia, 1 in Bavaria, 1 in Wurttemberg,
1 in Baden, and 1 in the Grand Duchy of Saxe-Weimar.
The following table shows the amount of the individual loans, the
name of the borrower, the rate of interest charged, and the principal
conditions for the granting of the loan :
L O A N S G R A N T E D B Y G E R M A N C IT IE S F O R T H E E R E C T IO N OF W O R K M E N ’ S
D W E L L IN G S .
[Source: Wohnungsfiirsorge in deutschen Stadten.
Bearbeitet im Kaiserlichen Statistischen A m te,
Abteilung fiir Arbeiterstatistik, Berlin, 1910, p. 484.]

City.

Berlin.

$238,000

119,000
59,500

Magdeburg.,

Rate of
interest in
per cent.

Am ount
of loans.

Loaned in equal
shares to two
pu blic-w elfare
building associa­
tions.
Building associa­
tion.
W orkm en’s build­
ing association.

108,766
40,896

Erfurt.

23,705
5,593

Flensburg..




7,140

Building and sav­
ings society.
Building Associa­
tion
Schmidtstadt.
W orkm en’s build­
ing association.

Other conditions.

Second mortgage.

Mortgage security.
Mortgage security; three-fourths of 1 per
cent refund. Restrictions as to area to
be occupied by buildings.
Dwellings
m ay not be higher than 4 stories.
Twothirds of the area of each floor with the
exception of the ground floor must be
given over to small apartments. Recall
of loan excluded during first 5 years.
Building operations to begin 6 months
after loan has been approved.
Mortgage security (loan of the communal
savings bank).
Mortgage security (loan of the city), onehalf of 1 per cent refund. Loan granted
for the erection of workmen’s dwellings
exclusively. Approval of building plans.
Limitation of rents. Permanent control
b y the city of the maintenance of build­
ings. Recall of loan in case of noncom­
pliance with obligations.
Second mortgage.
Do.
Mortgage security. Obligation to rent onethird of the apartments to communal
workmen.

235

GOVERNMENT AID TO HOUSING---- GERMANY.

L O A N S G R A N T E D B Y G E R M A N C IT IE S F O R T H E E R E C T IO N O F W O R K M E N ’S
D W E L L I N G S —Continued.

Am ount
of loans.

City.

K ie l...........

$16,660

Liineburg.

47,600

D ortm und.

71,210

Frankfort on t h e
Main.

150,440
71,400

71,238
Mulheim
Ruhr.

on

the

Crefeld.

118,286
223,244

Borrower.

Rate of
interest in
per cent.

Building and sav­
ings society.
Public - w e l f a r e
building associa­
tion and private
parties.

One half of 1 per cent annual refund.
1 per cent refund. First mortgage. Build­
ings m ust, in the first place, serve as
workmen’s dwellings. Recall of loan by
city permissible only after 10 years and on
6 months’ notice if borrower complies with
his obligations.
First mortgage.

Public - w e l f a r e
building associa­
tion.
People’s building
and saving so­
ciety.
Stock company for
the erection of
s m a l l apart­
ments.
Frankfort Housing
Association.
P u b l i c -w e l f a r e
building associa­
tions.
Citizens of Crefeld.

M ii n c h e n-Gladbach.

60,136

31,428
22,231

Mortgage security. Four loans repayable
after 63, 61, 61, and 53 years.
Mortgage
years.

i 19,159

B o n n ...

9,541

R heyd t.

18,088

Neuss.

66,569

Munich.

Augsburg.

Citizens of N eu ss..

3h

1 Total amount of loans granted to the four associations,
reported.




71

Repayable

after

61

Three-fourths of 1 per cent refund.

3 and 4

Cooperative build­
ing association,
with
limited
liability.

after

1 per cent refund. 17 apartments must be
reserved to traction employees.

374,088

21,420

Repayable

Loans made on first mortgage security in a
maximum amount of three-fourths of the
value of ground and dwellings. Control
of execution of buildings through the city
building department.
Mortgage security. Additional loans made
up to 75 per cent of their value on houses
on which the savings bank has made
loans up to 50 per cent of their value.

Gladbach Build­
ing Stock Co.
Diisseldorf Savings
and Building So­
ciety.
'Official’s building
association Duisburg-Ruhrort.
Evangelic Savings
and Building So­
ciety in Laar.
Catholic Savings
and Building So­
ciety in Laar.
Protestant
Sav­
ings and Build­
ing Society in
> Duisburg-Buck.
Housing associa­
tion. .

Duisburg.

security.

Mortgage security.
years.
1 per cent refund.

Citizens of Miinchen-Gladbach.

Diisseldorf.

Other conditions.

Repayable whenever the dwellings are no
longer used for the present scope. Long­
term loans.
Loans are made to persons subject to in­
validity insurance at the rate of 3 per cent
interest and 2 per cent refund, and to
small business people, artisans, etc., at
the rate of 4 per cent interest and 1 per
cent refund on houses worth up to 18,000
marks ($4,284). Recall is permissible in
case of unpunctual payments, bank­
ruptcy, change in the use of the dwellings,
devaluation, transfer, and insufficient fire
insurance.
2 to 10 per cent refund. Mortgage security.
Second mortgage loans are made on prop­
erty of a m axim um value of 50,000 marks
($11,900) up to 75 per cent of the value.
1 per cent refund. Loans m ay not exceed
80 per cent of the building costs, inclusive
of the value of the ground. (For particu­
lars see text.)
Second mortgage. Refund in 46| years.
Further mortgaging of property not per­
missible. In case of sale the city reserves
to itself the right of refusal.
Am ount granted^ each association is not

236

BULLETIN

OF THE BUREAU OF LABOR STATISTICS.

L O A N S G R A N T E D B Y G E R M A N C IT IE S F O R T H E E R E C T IO N O F W O R K M E N ’ S
D W E L L I N G S — Concluded.

City.

Fiirth____

Rate of
interest in
per cent.

Am ount
of loans.

179,730

Public - w e l f a r e
building associa­
tion.

First mortgage security.

Ratisbon.

Plauen___

23,800

The city has a communal loan fund for
the improvement of housing conditions.
Loans with very favorable refunding con­
ditions.
1 per cent refund. Mortgage security.
(See text.)
1 per cent refund. Mortgage security.

19,040

Stuttgart.

142,800

U lm ..........

Lud wigsburg.

111,860
1,904

Mannheim___

5,879

11,091

Mannheim
Com­
munal
Savings
Bank.
Freiburg.................. .

8,092
46,648
97,594
39,848

Jena........... .

1,975

Brunswick.

3,570
1,190
12,424

Strassburg.

11,900

Liibeck___

23,800

11,900

H am burg.




285,600

Building and sav­
ings society of
the federation
of low-salaried
officials of the
railroads
and
steamboat com­
panies of W urttemberg.
-------d o ..................... .

Building and sav­
ings society.
Building and sav­
ings society (reg­
istered coopera­
tive society with
limited liability).
____ d o ..................

.d o .
.d o .

To be taken over after 3 years b y the Insur­
ance Institute Wurttemberg as a 3 per
cent loan and to be refunded in 92 equal
semiannual installments.
4J and 4|
3|

4

31

Public - w e l f a r e Reduced
building associa­
rate.
tion.
Private
parties,
O n e men in the build­
fourth
ing trades, and
of 1 per
societies.
cent
reduct i on
from
us ual
rate of
in te r­
est.
2
Building Associa­
tion of J ena.
____ do.......................
3*
4
------ d o .......................
4
Brunswick Build­
ing Association.
Free of
Public - w e l f a r e
building associa­ interest.
tion.
Public - w e l f a r e
31
building society.

.d o..

Other conditions.

3
1

The building plans are subject to communal
approval.
Second mortgage.

Third mortgage on a grant of hereditary
construction and the buildings erected
in pursuance of this grant. Refund in 50
years.
Do.
First mortgage on a grant of hereditary con­
struction and the building erected in pur­
suance of this grant. Refund in 50 years.

Loans made on mortgage security up to 70
per cent of the estimated value.

Mortgage security.
Do.
Do.
Mortgage security. Loan m ay not be re­
called during first 10 years.

1 per cent refund. Mortgage securit;,,
Conditioned on erection of 100 apartments
within 2 to 3 years. State control as to
the use of building loan, as to building
plan, determination of rents, and condi­
tions of sale.
1,000 marks ($238) annual refund. Mort­
gage security conditioned on erection of 40
apartments within 5 years. Other con­
ditions same as above.
Loans may not be recalled during first 10
years, and m ust, after the expiration of 10
years, be refunded in annual installments
of 10 per cent. The apartments to be
built must correspond to specified require­
ments. (See text.)

GOVERNMENT AID TO HOUSING-----GERMANY.

237

More detailed facts with respect to some cities which were espe­
cially active in granting loans for the erection of workmen’s dwellings
are given below to supplement the data contained in the above table.
In 1901, in commemoration of the day on which the Prussian
Kingdom was established, Berlin created a foundation endowed with
1,000,000 marks ($238,000) from communal funds. According to
the resolution of the city council of June 19, 1902, the object of this
foundation is to aid people of small means residing in Berlin in
obtaining low-rent sanitary apartments. The funds of the founda­
tion are to be used especially in granting financial aid to publicwelfare building enterprises which promote the erection of dwellings
containing such apartments. Ready funds of the foundation may
also be used to protect from homelessness people of small means liv­
ing in Berlin. Dwellings erected with the aid of the foundation are
to be rented to the people of small means who have resided in Berlin
for at least five years. Families with numerous children are to be
given preference. Rents are to be fixed in such a manner as to
bring in the usual interest on the ground and building costs, and to
cover the cost of maintenance and administration. The funds of the
foundation were loaned in equal shares to two building associations
at 3 per cent interest. In addition to this, the treasury of the city
obtained a loan of 500,000 marks ($119,000) from the communal
savings bank and reloaned it on mortgage security to a building
association at 3^ per cent interest.
The city of Posen has made mortgage loans to the local workmen’s
building association in amounts aggregating 250,000 marks ($59,500)
at 3J per cent interest and an annual refund of three-fourths of 1 per
cent. The communal committee on matters relating to the com­
munal savings bank determined on February 7, 1903, upon the fol­
lowing conditions for the granting of mortgage loans by the com­
munal savings bank for the erection of workmen’s dwellings: Loans
are to be granted only if the ground in question is not excessively
exploited for the erection of buildings, and if the location and inte­
rior equipment of the dwellings fulfill all technical and sanitary
requirements. Dwellings on which loans are to be granted may not
be higher than four stories. At least two-thirds of the floor space of
all floors with the exception of the main floor must be given over to
small apartments consisting of not more than two rooms and acces­
sories. These small apartments must not be located exclusively in
wings or facing into courtyards. Each apartment must have a
direct exit to the stairs. Each apartment consisting of more than
one room must be provided with running water, a sink, and drainage
pipe. Running water and a sink must be provided on the common
landing for every four 1-room apartments. Loans may be termi­
nated by either party after six months’ notice. Recall of a loan




238

B ULLETIN OF THE BUREAU OF LABOR STATISTICS.

is, however, excluded during the first five years. The borrower is
obligated to begin building within six months after his application
for a loan has been approved, and the dwellings must as a rule be
finished within two years. In case of noncompliance with these con­
ditions the borrower forfeits his claim to a loan. Dwellings and
apartments must always be kept in good repair. The communal
committee on matters relating to the savings bank is authorized to
make an inspection at any time to ascertain if the above conditions
are complied with.
Magdeburg has made very extensive loans. Loans must be
secured by mortgage and are granted partly by the communal sav­
ings bank. Up to May, 1909, the loans made by the city totaled
171,830 marks ($40,895.54). Those made by the savings bank bear
interest at the rate of 3^ per cent. The loans granted by the city are
made with funds obtained from the State Insurance Institute SaxeAnhalt. The city figures as debtor of the insurance institute and
reloans the money on mortgage under the following conditions:
1. The borrower shall pay each year an amount equal to 3f per
cent of the original loan. From this amount 3| per cent on the out­
standing loan shall be deducted for interest and the remainder shall
be devoted to paying off the capital. These payments must be
made quarterly.
2. The loan may be used only for the erection of workmen’s dwell­
ings— i. e., dwellings with apartments of not more than three or four
rooms, inclusive of kitchen. Not more than one-sixth of all apart­
ments may have four rooms. The dwellings must also contain apart­
ments of less than three rooms in a number to be prescribed by the
city. The establishment in the dwellings of stores, workshops, and
other industrial rooms is as a rule prohibited and may only be per­
mitted by special approval of the city.
3. The building plans are to be submitted to the city before the
beginning of building operations and to be transmitted by the latter
to the State Insurance Institute Saxe-Anhalt, to which is reserved
their final approval.
4. Apartments may be rented only to persons insured in the State
Insurance Institute Saxe-Anhalt. The special approval of the insti­
tute is required for exceptions to this rule. The borrower must each
year in January submit to the city a list of all tenants, made out on
a special form prescribed by the insurance institute.
5. Rents for apartments of three rooms (inclusive of kitchen and
small rooms which can not be heated) may not exceed 225 marks
($53.55) per year, and for those with four rooms (inclusive of kitchen,
etc.), 300 marks ($71.40).




GOVERNMENT AID TO HOUSING-----GERMANY.

239

6. The entire property, especially the buildings, must be kept in
good serviceable condition and the city alone shall be competent to
decide whether this condition is observed.
7. If the borrower does not completely and in due time comply
with the above conditions, the city shall be authorized to recall the
loan after three months’ notice.
8. The city reserves in a general way the right to recall the loan
on the first day of any quarter by giving six months’ notice. This
right of recall is merely to insure the accomplishment of the purpose
for which the money was loaned. The city will never use it as long
as the borrower complies with his contractual obligations.
9. The borrower must pay all costs of the loan. Loans are made
up to 70 per cent of the total value of the property.
The city of Luneburg has borrowed from the State Insurance
Institute Hanover 200,000 marks ($47,600), at 3| per cent interest,
and reloaned them for the erection of workmen’s dwellings to a
public-welfare building association and to private parties, stipulating
that 3i per cent interest and 1 per cent refund is to be paid on these
loans. Loans may be terminated by either party on six months’
notice. The city, however, may not during the first 10 years of the
loan make use of this right of recall, if the borrower complies with
his contractual obligations. The rents from dwellings on which a
loan is made may not exceed 6 per cent of the invested capital. The
borrower in renting apartments is obligated to consider in the first
place persons insured in the State Insurance Institute Hanover. If
the owner of a dwelling on which the city has made a loan rents an
apartment to a person in his employment, he is prohibited from
inserting in the lease a clause providing that the tenant must vacate
the apartment immediately without the usual notice whenever he
leaves his employer’s service.
The city of Neuss contracted a loan of 500,000 marks ($119,000),
and formed with it a communal administrative fund for making
mortgage loans on small dwellings up to 75 per cent of their value.
Such loans were originally made only on dwellings owned by residents
of Neuss of a value not exceeding 25,000 marks ($5,950), but this
limit was later on raised to 50,000 marks ($11,900). Up to April 1,
1909, loans amounting to 279,709.63 marks ($66,570.89) were made
on 94 dwellings. The contractual annual refund varies between 2
and 10 per cent; the rate of interest charged is 4J per cent.
Munich takes first place among the Bavarian cities in granting
loans for the erection of workmen’s dwellings. The city council
issued, in July, 1909, a set of fundamental regulations for the loaning
out of communal funds to promote the erection of dwellings with
small and medium sized apartments. According to these regulations
the city, in addition to making independent provision for the hous­




240

B U L L E T IN OF T H E BU REAU OF LABOR STATISTICS.

ing of its own employees and workmen, will also promote in a general
way the erection of dwellings with small apartments— (a) by pro­
curing for this purpose loans from the State agricultural mortgage
bank, and (b) by making mortgage loans with communal funds.
Loans are not to be made on individual houses but on large groups
of dwellings. The majority of the apartments must consist of not
more than two rooms and kitchen and accessories. Loans from com­
munal funds may not exceed the amount of 80 per cent of the cost
of buildings and grounds. The conditions are: 4 per cent interest
and 1 per cent refund. Building operations must begin at the latest
two months after final approval of an application for a loan, and
their uninterrupted progress must be assured. On motion of its
committee on housing the city council appropriated 2,000,000 marks
($476,000) for the above purpose. On July 15, 1909, loans were
approved to the amount of 716,800 marks ($170,598.40) for the
erection of 11 houses with 120 apartments. Previous to this date
the city had made loans from communal funds amounting to 855,000
marks ($203,490) on 12 houses with 125 apartments.
The granting of loans from the State agricultural mortgage bank
and the city’s guaranty of them is discussed in the next section.
In Plauen in Saxony the city council on May 22, 1902, resolved
that the communal savings bank might, with ministerial approval,
grant loans to private parties or to associations for erecting dwellings
with small apartments, beyond the limits determined in its by-laws
and up to the full amount of fire insurance carried. These loans must
be secured by mortgage. The borrower must pay 5 per cent annually
for interest and refund, and any portion of this amount exceeding the
current rate of interest charged by the savings bank for mortgage
loans is to be credited to refund. For the protection of the depositors
and other creditors of the bank the amount of 200,000 marks ($47,600)
is to be taken from its reserve fund and to be separately administered
for the purpose of covering such losses as may arise through granting
loans beyond the security stipulated in the bank’s by-laws. The total
amount of such loans may never exceed the guaranty fund. Loans
of this kind may not be granted during times in which a scarcity of
small apartments does not exist, nor is expected to exist in the near
future.
In 1907 the city of Stuttgart in Wurttemberg granted a 4 per cent
mortgage loan of 600,000 marks ($142,800) to a building and savings
society of low-salaried railroad and steamship officials of Wurttem­
berg, which had already built a large group of dwellings, but had got
into serious financial difficulties. Later on it made the same society
another loan of 100,000 marks ($23,800) at the same rate of interest.
The first loan was made on condition that the State Insurance Insti­
tute Wurttemberg, should take it up after three years and commute




GO VERN M EN T AID TO H OUSING -----G ERM AN Y .

241

it into a 3 per cent loan to be refunded in 92 equal semiannual install­
ments. The second loan of 100,000 marks ($23,800) which as a lien
ranked after that of 600,000 marks ($142,800) was to be refunded to
the city in annual payments of 5 per cent inclusive of interest.
The city of Mannheim in Baden has made several loans to the
building and savings society of Mannheim, a registered cooperative
society with limited liability. It first loaned 24,700 marks ($5,878.60)
at 4 per cent interest on a second mortgage on houses of the society
of an estimated value of 167,000 marks ($39,746). Next the commu­
nal savings bank granted to the society at the end of the year 1907
a loan of 196,000 marks ($46,648). The society gave as security a
first mortgage on the buildings it had erected on a specified hereditary
right of construction granted to it by the city. This loan bears
interest at the rate of 3J per cent and is to be refunded in 50 years by
means of annual payments. In 1908 the city granted to the same
society two loans of 46,000 marks ($10,948) and 34,000 marks
($8,092). The society gave in both instances a third mortgage on a
hereditary right of construction and on the buildings erected on the
grant. The interest on both loans is 4 per cent and by means of
annual payments they must be refunded at the latest by 1958.
The treasury department of the Hanse town Lubeck in 1899 granted
to the Lubeck Public-Welfare Building Society a loan of 100,000 marks
($23,800). The society had to assume an obligation to construct within
two or three years dwellings with about 100 apartments. The loan was
made on second mortgage security at a rate of 3 1 per cent interest and
1 per cent annual refund. The city reserved the right to control the
use of the building loans, the formation of the building plans, the
determination of the rents, the conditions of transfer and the general
activity of the society. The loan may at any time be recalled after
six months’ notice if the society does not comply with its contractual
obligations. A second loan, amounting to 50,000 marks ($11,900),
was granted to the society by the city in 1902. Like the first loan it
bears interest at the rate of 3| per cent and is to be refunded by
annual payments of 1,000 marks ($238). As security for this loan
the society gave a mortgage on specified property and obligated itself
to erect within five years on its property in a specified street dwellings
with at least 40 apartments. The city reserved again the right of con­
trol specified above.
The senate of the city of Hamburg passed on May 21, 1902, a law
relating to the promotion of housing work. According to article 1
of this law, the committee on finance is authorized to sell at public
auction specified parcels of the city’s real estate to parties agreeing to
erect buildings on them in accordance with the conditions given
below. On request of the purchaser the committee on finance may
6 6 1 7 1 °— Bull. 158— 15--------16




242

B U L L E T IN OF T H E BU REAU OF LABOR STATISTICS.

in place of cash payment accept a first mortgage bearing interest at
the rate of 4 per cent.
According to article 2 the buildings to be erected may in the stories
above the first floor contain only apartments of the following descrip­
tion:
(а) Apartments of at least 30 square meters (323 square feet) and
not more than 35 square meters (377 square feet) floor space, consist­
ing of one room, kitchen, toilet, and pantry;
(б) Apartments of at least 35 square meters (377 square feet) and
not more than 48 square meters (517 square feet) floor space,
consisting of two rooms, kitchen, toilet, and pantry;
(c) Apartments of at least 48 square meters (517 square feet)
and not more than 60 square meters (646 square feet) floor space,
consisting of three rooms, kitchen, toilet, and pantry.
All apartments must have attic and cellar space. At least onetwentieth of the apartments in each building must be of the kind
described under (a) and not more than one-sixth of them may be of
the kind described under (c).
At auction sales held in accordance with the provisions of article 1,
it must be made a condition of the sale that no saloon shall be main­
tained in the buildings to be erected.
According to article 3 of the law, the committee on finance is au­
thorized to raise, by means of a public loan, the amount of 1,200,000
marks ($285,600) and to reloan this amount to parties who have pur­
chased land from the city at the auction sales provided for in article
1, or to other parties who erect dwellings with small apartments.
The rate of interest on such loans is to be 4 per cent. Loans of this
kind may not exceed 25 per cent of the insured value of the property,
and must be secured by a mortgage, the amount of which, together
with other mortgages preceding it in rank, may not exceed the price
of the ground and 75 per cent of the insured value of the building.
The loan contract must provide that the buildings to be erected shall
correspond to the specifications given in article 2 of the law; if they
do not the loan may be recalled at any time without notice. If the
borrower wishes it, the contract must contain the stipulation that,
provided the above conditions are observed, the loan may not be
recalled for 10 years, and that at the expiration of that time it shall
be refunded in annual payments of 10 per cent. This loan may,
however, be recalled at any time without previous notice if the
apartments contained in the building do not correspond to the
specifications of article 2 of the law.
Article 4 of the law grants 10 years’ exemption from payment of
the land tax to all dwellings corresponding to the provisions of article
2, erected and in use within three years after the passage of the law,
provided that the annual rent per square meter (10.8 square feet),




243

GO V ERN M EN T AID TO H O U SIN G ---- G ERM AN Y .

inclusive of the charges for the use of water and illumination of the
stairs, does not exceed 6 marks ($1.43).
Articles 5 and 6 of the law grant to dwellings with small apart­
ments exemption from specified provisions of the building regula­
tions.
According to a report of the senate commission of June 15, 1909,
the amount of 1,200,000 marks ($285,600) provided for in the law
had been at that time exhausted through the granting of various
loans.
Further appropriations of city funds for the improvement of
housing conditions were lately under consideration by the Senate
and burgesses of Hamburg.
Since the publication of the report of the imperial statistical office
on housing work of German cities, the city of Dresden has appro­
priated 500,000 marks ($119,000) for the purpose of granting loans
on second mortgage security on houses with small apartments erected
after January 1, 1911.
MUNICIPAL GUARANTY OF BUILDING LOANS MADE BY THIRD PARTIES.

In 1909, according to the report of the imperial statistical office,
19 German cities, with a population of over 50,000, had guaranteed
loans made to building associations by third parties. These cities
are enumerated in the following table, with the total amounts of the
loans which they had guaranteed:
G E R M A N C IT IE S W H IC H H A V E G U A R A N T E E D L O A N S M A D E B Y T H I R D P A R T I E S TO
B U I L D I N G A S S O C IA T IO N S A N D A M O U N T S O F T H E S E L O A N S .
[Source: Wohnungsfiirsorge in deutschen Stadten. Bearbeitet im Kaiserlichen Statistischen Am te,
Abteilung fiir Arbeiterstatistik. Berlin, 1910, p. 498.]

City.

Amount
of loans
guaranteed.

Posen...................................................................
Hagen................................................................
Miilheim on the R uhr..................................
Barmen...............................................................
Cologne...............................................................
Crefeld.................................................................
Munchen-Gladbach.......................................
Diisseldorf.........................................................
Duisburg...........................................................
Elberfeld............................................................
Essen...................................................................

$59,500.00
123.998.00
27.370.00
71.400.00
66.878.00
176.953.00
309.400.00
45.220.00
121.380.00
15.470.00
202.776.00

City.

B onn ...........................................................
Oberhausen............................
Remscheid.......................................................
R h eyd t.......................................................
Neuss 1................................................
Munich. ........................
Ludwigshafen....................................
Plauen...............................................................
M annheim.................................................
Strassburg...........................................

Am ount
of loans
guaranteed.

$82,990.60
71.400.00
12,399.80
238.000.00
277,746.00
476.000.00
8,568.00
23.800.00
71.400.00
238.000.00

i The yearbook for housing reform (Jahrbuch der Wohnungsreform) for 1911 reports that Neuss has up
to February, 1912, assumed guaranty for loans made to 3 local building associations in the amount of
2,530,000 marks ($602,140). In the houses erected by these 3 associations live at present 3,684 persons, or
nearly 10 per cent of the population of the city.

Of the cities enumerated in the above table 14 are in Prussia, 2
in Bavaria, and 1 each in Saxony, Baden, and Alsace-Lorraine. It
is noteworthy that of the 14 Prussian cities, 12 are in the Rhine
Province. There are only two cities with a population of less than




244

B U L L E T IN

OF TH E BU REAU OF LABOR STATISTICS.

50,000 inhabitants among those enumerated, Rheydt and Neuss,
which are also in the Rhine Province.
The loans guaranteed were in nearly all instances obtained from
State insurance institutes, but those guaranteed by the city of
Munich were made by the State agricultural mortgage bank.
SALE OF BUILDING GROUNDS AT REDUCED PRICES.

The report of the imperial statistical office shows that 23 cities
sold communal lands at reduced prices to promote the erection of
workmen’s dwellings. These cities are Spandau, Erfurt, Kiel,
Hanover, Luneburg, Cologne, Munchen-Gladbach, Diisseldorf, Duis­
burg, Bonn, Augsburg, Flirth, Dresden, Plauen, Ulm, Heilbronn,
Ludwigsburg, Freiburg, Constance, Giessen, Jena, Strassburg, and
Colmar. Of these cities, 16 have a population of over 50,000 inhabi­
tants; 9 of these are in Prussia (5 in the Rhine Province), 2 each
in Bavaria and Saxony, and 1 each in Wurttemberg, Baden, and
Alsace-Lorraine; the other cities (Luneburg, Heilbronn, Ludwigs­
burg, Constance, Giessen, Jena, and Colmar) had less than 50,000
inhabitants.
Erfurt reports that 5 building lots aggregating 2,507 square
meters (26,985.3 square feet) were sold at 10 marks ($2.38) per
square meter as building grounds for dwellings with small apart­
ments with the provision that the city was to bear the costs of street
building and maintenance. In 1899 the city sold 5 building lots
at prices from 3 to 4.10 marks (71.4 to 97.6 cents) per square
meter (10.8 square feet) on condition that dwellings with apart­
ments consisting of one large room, one or two small rooms and
kitchen should be erected on them, that building operations should
be started within one year from the date of sale and that the brick­
work should be finished within two years from that date. The
transfer costs and the costs of street building were to be borne by
the city.
In the same year the city sold a plot of ground
of 17,912 square meters (192,804.8 square feet) at the price of 6
marks ($1.43) per square meter (10.8 square feet), free of street
building costs on condition that dwellings should be erected only
on that part of the ground which fronts on the street and that these
dwellings should be mainly workmen’s dwellings. In 1900 the
city sold two plots of land of 2,770 and 10,300 square meters (29,816.3
and 110,869.2 square feet) at 12 marks ($2.86) per square
meter (10.8 square feet), free of street building costs on condition
that one of the plots, except for its corner lots, should be used only
for houses containing on the second, third, and fourth floors two
apartments each consisting of one large room, one or two small
rooms, and kitchen. Finally in 1902 the city sold four plots at the
price of 7 marks ($1.67) per square meter (10.8 square feet), free of




G O VERN M EN T AID TO H O U SIN G ---- G E R M A N Y .

245

* street building costs on the same conditions as made for the sale
effected in 1899.
The city of Kiel has sold to the local workmen’s building and sav­
ings society two plots of 3,836 and 1,872 square meters (41,290.7
and 20,150.2 square feet) at 5 marks ($1.19) per square meter (10.8
square feet); the actual value of the land was, according to the report
of the city, 12 marks ($2.86) per square meter.
In 1903 the city of Hanover sold to the Continental Caoutchouc
and Gutta-percha Co. for the erection of workmen’s dwellings a
tract of 708 Hanoverian quadrat ruten (12,011 square yards for 550
marks ($130.90) per quadrat rute (16.965 square yards) free of street
building costs.
The city of Liineburg has opened communal lands for building pur­
poses and sells lots on which workmen’s dwellings are to be erected
for 4 and 6 marks (95.2 cents and $1.43) per square meter inclusive
of costs for the building of streets. From 1901 to May, 1909, there
had been erected 140 houses on lands sold at 4 marks (95.2 cents) per
square meter.
Duisburg has sold to the local building and savings society 30 ares,
8 square meters (32,378 square feet) at a moderate price.
Miinchen-Gladbach transferred to the Gladbach Building Stock
Co. 47.45 ares (1.17 acres) for a consideration of 16,757.23 marks
($3,988.22) or 3.53 marks (84 cents) per square meter.
The poor administration of the city of Bonn sold to the Workmen’s
Housing Association in the years 1898 to 1909 altogether 9,479
square meters (102,032 square feet) of building lots as follows: 4,240
square meters (45,639 square feet) at 5 marks ($1.19) per square
meter ; 1,780 square meters (19,160 square feet) at 7.50 marks ($1.79);
2,514 square meters (27,061 square feet) at 10 marks ($2.38); and 945
square meters (10,172 square feet) at 13.75 marks ($3.27); the dif­
ference in price is due to the more or less favorable location of the
plots with respect to the central part of the city.
The city of Furth sold to the public-welfare building association,
founded in 1908 for the erection of workmen’s dwellings, a tract of
land of 30,400 square feet for the low consideration of 35,000 marks
($8,330).
Dresden made a gift of building lots for 18 houses to the JohannMeyer-Foundation which is administered by the commune and has
as its purpose the erection of dwellings for w
rorkmen of small means.
Ulm has sold building lots at reduced prices to the Housing Society
of Ulm, the local building and savings society, and to the building and
savings society of the railway employees of Wurttemberg (branch
Ulm).
Heilbronn transferred to the Workmen’s Housing Association of
Heilbronn for the erection of workmen’s dwellings a tract of 2,957




246

B U L L E T IN OF T H E BUREAU OF LABOR STATISTICS.

square meters (31,829 square feet) for a consideration of 5 marks
($1.19) per square meter; the actual value of the land was 10 marks
($2.38) per square meter.
Ludwigsburg sold to the local building and savings society 1,166
square meters (12,551 square feet) for 2.83 marks (67 cents) per
square meter.
As early as in the seventies Freiburg aided the local public-welfare
building association through sale at reduced prices or gift of com­
munal lands. The city has also aided the Freiburg Building Society
which in the years 1903 to 1908 erected 24 houses with 173 small
apartments. In addition to granting to this society many privileges,
the city sold it a tract of land at such a low price that it virtually
represented a gift to the society of 58,000 marks ($13,804).
Constance sold at reduced prices -building lots for 12 dwellings.
The city of Jena sold in 1899 and 1907 building lots at reduced
prices. The price charged in 1899 was 1.50 marks (35.7 cents) and in
1907, 5 marks ($1.19) per square meter.
Colmar made the local building society a gift of a building lot of 82
square meters (882.6 square feet).
EXEMPTION, RESPITE FROM PAYMENT, OR REDUCTION OF STREET-CONSTRUCTION
COSTS OR OF GROUND OR HOUSE TAXES.

Of cities with a population over 50,000, 24 have granted exemption
or respite from payment or reduction of street construction costs of
ground or house taxes. These cities are: Posen, Breslau, Erfurt,
Kiel, Flensburg, Hanover, Frankfort on the Main, Aix la Chapelle,
Barmen, Miilheim on the Ruhr, Mulheim on the Rhine, Cologne,
Munchen-Gladbach, Dusseldorf, Duisburg, Bonn, Nuremberg, Furth,
Wurzburg, Stuttgart, Ulm, Mannheim, Freiburg, and Strassburg.
Of these cities there are 16 in Prussia (9 in Rhine Province), 3 in
Bavaria, 2 each in Wurttemberg and Baden, and 1 in Alsace-Lor­
raine. Of smaller cities there are to be mentioned: Liineburg,
Rheydt, Ratisbon, Heilbronn, Heidelberg, Constance, and Jena.
It would go beyond the scope of the present work to describe the
measures taken by each of the cities enumerated above, but a few
especially noteworthy methods of extending aid of this kind to
building associations may be mentioned here.
The city of Erfurt in 1898 granted exemption from street con­
struction costs to the Erfurt Building and Savings Society for all
houses which should be erected within 10 years as dwellings for work­
men and other people of small means. The society was also granted
exemption from the transfer tax, and fees for building permits
amounting to about 2,000 marks ($476) were remitted to it. In 1902
the society had already erected 15 houses, with 107 apartments. In
1903 the society built 7 houses more, with 54 apartments and a kin­




G O VERN M EN T AID* TO H OU SIN G-----G ERM AN Y .

247

dergarten; the city remitted to it again street-construction costs to
the amount of 2,900 marks ($690.20), and fees for building permits,
amounting to 1,010 marks ($240.38). When the same society in 1908
started the construction of 13 houses, with 100 apartments, the city
remitted one-half the cost of street construction, or about 6,000
marks ($1,428), on condition that the 13 houses should be completed
within 3 years. The city has also aided the Building Association
Schmidtstadt by laying, at a cost of 8,000 marks ($1,904), sewer and
water pipes to the building lots of the association which were situated
beyond the built-up area of the city. The city has further remitted
to the association costs of street construction, or granted a respite
for their payment.
The city of Kiel has in a number of instances permitted the streetconstruction costs for workmen’s dwellings to be refunded to it in 20
annual installments in place of the usual 10 annual installments.
The ground-tax ordinance of December 24, 1900, of the city of
Flensburg provides that in the case of dwellings erected or purchased
by public-welfare building associations and dwellings owned and
occupied by workmen or other persons of a similar economic condi­
tion, only half the value of the property in question shall be taken as
a basis for the computation of the ground tax.
The city of Hanover has in several instances remitted part of the
street-construction costs to a total amount of about 15,000 marks
($3,570). It has also, as mentioned previously, sold a tract of land
to the Continental Caoutchouc and Gutta-percha Co. free of streetconstruction costs.
In Mulheim on the Ehine the city aided the building and savings
society by assuming the necessary street-construction costs, with the
provision that the association should repay this amount gradually,
without interest. The city accepted as security 25 shares of the asso­
ciation of a face value of 200 marks ($47.60). Later on, after the
association had refunded the street-construction costs, these shares
were purchased by the city.
The city of Cologne has remitted street-construction costs to the
total amount of 175,993 marks ($41,886.33).
InMunchen-Gladbach the local building association has been granted
a reduction of one-half of the street-construction costs and of the
ground and house taxes.
The city of Duisburg passed on April 18, 1898, an ordinance accord­
ing to which in the case of workmen’s dwellings only one-half of the
street and sewer construction costs shall be charged to the owner and
the entire costs of sidewalk construction shall be borne by the city.
The amounts remitted in this manner are, however, to be refunded to
the city if the buildings are used for other purposes than the housing
of workmen. This obligation of an eventual refund is registered as a




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lien on the property. The building department decides in each
instance whether a dwelling has the character of a workmen’s dwelling
in the meaning of the ordinance, and is guided in its decision by the
following norms: The height of these dwellings shall not exceed 10
meters (32.8 feet); no dwelling shall contain more than 3 or 4 apart­
ments consisting, as a rule, of not more than 2 or 3 rooms of a maxi­
mum airspace of 50 cubic meters (1,765.7 cubic feet). The ordinance
is not retroactive and does not apply to workmen’s dwellings erected
by industrial establishments for their own workmen.
The city of Aix-la-Chapelle has remitted street-constraction costs to
the amount of 5,043.34 marks ($1,200), and, according to its groundtax ordinance, workmen’s dwellings are taxed on only one-half of their
value. The ground taxes remitted in this manner amounted for the
fiscal year 1908 to 1,078.50 marks ($256.68).
In Rheydt public-welfare building associations are, according to an
amendment of a local ordinance of July 17, 1894, permitted to erect
workmen’s dwellings on streets which have not yet been opened to
public traffic without making a deposit of the prospective street-construction costs; they may also be permitted, subject to revocation, to
use part of the street grounds for small gardens in front of the houses.
These gardens must, however, be separated from the street by a fence.
The city ordinance of July 24, 1900, regulating the ground and house
tax, provides that all dwellings erected for the use of workmen or
small business men after the coming in force of the ordinance shall
during the first three years after their erection pay only one-tenth
of the regular ground and house taxes.
Of Bavarian cities, Nuremberg should be mentioned, where the city
council on July 23, 1907, and on July 10 and 28, 1908, passed ordi ­
nances remitting one-half the costs of sewer and street construction
to all building enterprises beginning before August 1, 1909, and com­
pleting within one year the erection of workmen’s dwellings with
small apartments of one or two large rooms, one small room and
kitchen, provided the dwellings in question are maintained for their
original purpose for at least 10 years. Building enterprises and owners
of building lots made use of this inducement in 11 instances in which
6,410.50 marks ($1,525.70) were remitted for costs of street con­
struction and 1,519.21 marks ($361.57) for costs of sewer construction.
An application of the railway employees’ building association ( Nurnberg-RangierbaJinhof), for remission of one-half the street and sewer
construction costs for 22 houses has been granted and will involve an
amount of about 30,000 marks ($7,140).
If workmen’s dwellings are erected on a street which is not yet
built up, the city of Fiirth does not charge street-construction costs
for the entire length of the street from one crossing to the next one,
as is otherwise usual, but only for the actual length of the street




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occupied by the buildings to be erected and for half the width of
the street. This remission can be granted only because the city
does its own street-construction work.
The city of Ulm, Wurttemberg, has remitted the local surtax to
the real estate tax entirely, and one-half of the State transfer tax
for all workmen’s dwellings built and sold by the city. One-half of
the local surtax and of the State transfer tax was remitted to the
local building and savings society.
In accordance with contractual agreement the city of Heilbronn
has remitted to the local housing society altogether 37,500 marks
($8,925). This amount is composed of the costs of purchase of the
street area and of the costs of sewer construction and maintenance,
which according to the local building ordinance should have been
refunded by the society. In addition, the city was under no obli­
gation to bear the costs of street construction for the dwellings erected
by the society which are situated at a great distance from the builtup part of the city.
Of the cities of Baden, Mannheim has remitted the costs of street
construction or granted a respite for their payment for 5 houses
erected by the local building and savings society. The amount
involved was 10,098.87 marks ($2,403.53). Heidelberg in 1890
remitted 3,100 marks ($737.80) of street-construction costs for
workmen’s dwellings erected by a private party. Constance has in
several instances not charged the costs of purchase of the street area;
the amount involved was about 18,000 marks ($4,284).
Strassburg has remitted to the local public-welfare building asso­
ciation about 20,000 marks ($4,760) of taxes and street-construction
costs.
GRANTS OF HEREDITARY RIGHTS OF CONSTRUCTION (ER B BA U R E C H T ) ON MUNICIPAL
LANDS.

The success of the movement of the land reformers (Bodenreformer)
is manifested by the large number of grants by German cities of
hereditary rights of construction. Cities which have granted such
rights ( Erbbaurechte) on communal lands are: Charlottenburg, R ixdorf, Posen, Breslau, Halle, Dortmund, Frankfort on the Main, Aixla-Chapelle, Dusseldorf, Duisburg, Elberfeld, Essen, Wurzburg, Leip­
zig, Zittau, Ulm, Karlsruhe, Mannheim, Giessen, and Strassburg.
Grants of rights of hereditary construction which were to a large
extent for the benefit of the working people were, however, made by
the following cities only: Frankfort on the Main, Aix-la-Chapelle,
Essen, Leipzig, Ulm, and Mannheim.
Below are data as to the number of grants of Erbbaurechte, the area
of the land involved by these grants, the parties concerned, and the
number of houses and apartments erected, for those cities only




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B U L L E T IN OF T H E BU REAU OF LABOR STATISTICS.

which granted Erbbaurechte benefiting directly or indirectly the
working classes.
Frankfort on the Main had up to the end of March, 1909, granted
134 Erbbaurechte, 10 to building associations, 99 to officials and teach­
ers, and 25 to private parties. The land involved in these grants
had an area of 71,720.4 square meters (17.7 acres). Up to that date
there had been erected on the land 62 one-family, 46 two-family, and
16 three-family houses, and 72 association houses with 911 apart­
ments.
Duisburg has granted hereditary rights of construction on 3 tracts
of a total area of 2,157 square meters (0.533 acres) to the officials’
housing association.
Elberfeld has granted an Erbbaurecht on a lot of 215 square meters
(2,314 square feet) to a married couple.
Essen has granted an Erbbaurecht on a tract of land to the United
Savings and Building Association.
Halle has granted an Erbbaurecht on two tracts amounting to
398 square meters (0.1 acre) to the society u Volkswohl.”
Leipzig granted an Erbbaurecht on a tract of 82,344.8 square
meters (20.3 acres) to the local public-welfare building association.
Ulm has granted Erbbaurechte to the Ulm Building Association
on a tract of 9,449 square meters (2.3 acres) and to the Sharpshooters’
Guild on a tract of 1,543 square meters (0.4 acre).
Mannheim granted in 1907 an Erbbaurecht for 2 tracts of 2,283
and 1,772 square meters (0.6 and 0.4 acre) to the savings and building
association. In 1908 the city concluded a contract with the grandducal administration of railroads in which the administration was
granted an Erbbaurecht on a tract of 998 square meters (0.2 acre).
The period for which the above-mentioned hereditary rights of
construction were granted varies greatly in the individual contracts.
The shortest period is 60 and the longest 100 years.
The annual ground rent charged for the grant of the hereditary right
of construction is in Frankfort on the Main 2\ per cent and in Aix-laChapelle and Ruhrort 3 per cent of the value of the ground. In
Elberfeld the ground rent has in consideration of the very favorable
location of the plot in question been fixed at 6,000 marks ($1,428) per
year. Essen charges an annualground rent of 534.38 marks ($127.18).
payable semiannually in advance and representing 2\ per cent of the
cost of the ground. In Halle the annual ground rent is 400 marks
($95.20). In Leipzig the public-welfare building association pays to
the city an annual ground rent of 12 pfennigs (2.9 cents) per square
meter of the tract on which an Erbbaurecht has been granted, exclu­
sive of the land used for streets or squares. The contract concluded
with the association, however, authorizes the city council to raise the
ground rent 25 years after the beginning of the grant to 14 pfennigs




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251

(3.3 cents) per square meter, after 50 years to 16 pfennigs (3.8 cents),
and after 75 years to 18 pfennigs (4.3 cents). The city of Ulm
charges for those parts of the ground which front on the street an
annual ground rent of 40 and 60 pfennigs (9.5 and 14.3 cents) up to
a depth of 20 meters (65.6 feet); for the balance of the ground the
rent is one-half of the above rates. In Mannheim the annual rent
paid by the savings and building society amounts to 3^ per cent
interest on three-fifths of the value of the ground and 4 per cent
interest on the costs of street construction. The grand-ducal admin­
istration of railroads pays to the city of Mannheim an annual ground
rent of 239.52 marks ($57.01) payable semiannually.
The obligation to pay ground rent is in Frankfort on the Main, Aixla-Chapelle, Ruhrort-Duisburg, Elberfeld, Essen, Halle, and Ulm, con­
sidered as a servitude on the hereditary right of construction and is
entered as such in the land register. In Leipzig it is stipulated in
the Erbbaurecht contract that the city shall be authorized to recall the
grant without previous notice, if the building association after a
written demand for payment repeated three times at intervals of
one month is still in arrears with the payment of the ground rent.
Nearly all contracts contain provisions as to the transfer of the grant of
the Erbbaurecht. In Frankfort on the Main the grantee binds himself
not to transfer the grant within the first 15 years of its duration,
except by legacy, without the consent of the city. A general right
of refusal is reserved to the city in any case of transfer of the grant,
and this right is to be entered in the land register as a permanent
servitude upon the Erbbaurecht. Similar provisions are inserted in
the contracts made by the city of Aix-la-Chapelle. In the case of
Ruhrort-Duisburg and Elberfeld the contracts provide that the city
shall have the right of refusal in any case of a transfer of the grant.
In the contract made by the city of Leipzig with the public-welfare
building association the latter obligates itself not to transfer the
Erbbaurecht granted to it without previous approval of the city. In
case of breach of this obligation, the city is authorized to annul the
grant immediately. The contract of the city of Ulm with the local
building association provides merely that the association shall not be
restricted in its right to sell the Erbbaurecht and the building erected
on it. According to the contract concluded by the city of Mannheim
with the local savings and building society, the latter obligates itself
not to transfer the Erbbaurecht without previous approval by the
city. In case of a transfer the party to whom the transfer is made
must assume all the obligations of the original grantee of the Erbbau­
recht. A general right of refusal is reserved to the city in each case
of transfer. The right becomes extinguished if the city does not,
within two months after having been informed by the grantee of the
Erbbaurecht of the conclusion of a transfer of the grant, notify the




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OF TH E BU REAU OF LABOR STATISTICS.

grantee in writing of its intention to exercise its right of refusal. The
right of refusal is to be entered in the land register as a permanent
servitude of the Erbbaurecht.
As regards the obligations of the parties to the Erbbaurecht contracts
enumerated above, the obligations assumed by the cities which con­
cluded such contracts are as follows: The city of Frankfort on the Main
obligates itself that the land involved in the Erbbaurecht contracts
shall be free of any lien, of third parties and guarantees to the grantee
exemption from street, sidewalk, and sewer assessments. The obli­
gations assumed by the city of Aix-la-Chapelle are very similar and
differ from those of Frankfort on the Main only in that the grantee is
subject to assessments for sidewalk and sewer construction and mainte­
nance. In Ruhrort-Duisburg the city obligated itself to construct
before October 1, 1908, specified streets on and near the land in
question. The grantee must, however, bear the cost of construc­
tion and maintenance of the sidewalks in front of the buildings to be
constructed. The cities of Essen and Mannheim guarantee that the
land in question is free from all liens of third parties. Halle in its
contract with the society “ Volkswohl” assumes the costs of street
construction. The city of Leipzig in its contract with the publicwelfare building association assumes the construction of all streets
and squares, inclusive of sidewalks and sewers, for the costs of which
the association has to pay annual interest at the rate of 4 per cent.
The city of Ulm assumes all the costs of construction as well as of
maintenance of streets, sewers, and gas conduits.
As to the obligations of the grantees of hereditary rights of construc­
tion, in addition to the obligation of the grantee to pay interest for the
use of the land, all contracts contain the clause that he must pay all
taxes and assessments on the land in question.
Of fundamental importance are the provisions regularly inserted
in all the contracts as to construction and maintenance of dwellings
erected by the grantee.
In Frankfort on the Main the grantee is obligated— (1) to build on
the land in question only in accordance with the submitted and
approved plans and to use the building exclusively for housing pur­
poses; (2) to maintain all structures above and below ground in a good
condition; in case of dissolution of the contract, however, allowance is
made for the wear caused by ordinary use; (3) to insure the buildings
to their full value against fire, and in case of fire to use the insurance
recovered exclusively for the reconstruction of the buildings, and to
begin and complete such reconstruction work without delay. The
communal building department is authorized to supervise the con­
struction and maintenance of the buildings and the grantee must
comply with all orders of the department. In case of noncompliance
the building department is authorized to have the necessary work




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253

performed at the expense of the grantee and to stop further pay­
ments by the city of installments of the building loan granted to the
grantee of the Erbbaurecht.
Other buildings than those provided for in the building plans may
not be constructed on the grant without approval of the city. The
grantee is also bound to see that the apartments are not used in a
manner objectionable from a sanitary or moral point of view. Rents
charged by the grantee may not exceed the limit to be agreed upon
with the city.
The contract of the city of Aix-la-Chapelle contains essentially the
same provisions. The only variation worth mentioning is that con­
struction work must be started within one year after the conclusion
of the contract and the building must be completed without delay.
None of the buildings erected by the grantee may house more than
two families.
The contract of Ruhrort-Duisburg with the officials7 housing
society, after providing for submission of the building plans for
approval to the building department and to the city council, stipulates
that the buildings must be kept in good condition during the period
covered by the contract and must be insured for their full value with
a legally licensed fire insurance company of Prussia. The city may
at any time while the contract is in force have the buildings inspected
as to their condition. The buildings erected on the grant must con­
tain only small apartments designed for rental to low-salaried officials
or persons of similar social and economic standing. Rental of these
apartments to other classes of the population is permissible only by
special approval of the city, to be obtained separately in each instance.
In the dwellings erected on one of the three tracts involved in the
grant, not more than one-fourth of the apartments may contain more
than four rooms exclusive of kitchen and accessories. In renting
apartments, individual groups of officials, such as officials of the
Empire or State, may not be given preference without explicit
approval by the city. In obtaining loans from the Empire or State
the society is, however, at liberty to insert on request of the Empire or
State a clause in the loan contract, in which it obligates itself to
reserve apartments to officials and employees of the Empire or State
in a number corresponding to the ratio the membership cf such
officials and employees forms of the total membership of the society.
Rentals for the apartments erected on the grant may not be higher
than required to cover the expenditures for interest and refund of the
loans raised for the erection of the buildings, the costs of maintenance
and administration, and for the creation of a suitable reserve fund for
possible losses of rent. Essential changes in the buildings, such as
additions or reconstructions, are permissible only with the approval of
the city. Another noteworthy provision of the contract prohibits




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B U L L E T IN OF T H E BU REAU OF LABOR STATISTICS.

the renting of premises for restaurants and saloons, or for industrial
establishments without previous approval of the city. The contract
finally provides that in any case of contravention of its provisions
the ground rent for that one of the three tracts of land involved in the
grant on which the contravention took place shall be increased to
double the stipulated amount without prejudice to other rights
reserved to the city.
The contract of the city of Essen with the United Building and
Savings Association authorizes the latter to erect on the tract involved
in the contract 32 cne-family and 15 two-family houses in accordance
with the building plans approved by the city. The city is authorized
to supervise the construction of the buildings and their maintenance
in good condition. The contract provides that during the period
covered by it the city shall be represented on the supervisory board
of the association.
The contract of June 12,1901, of the city of Leipzig with the publicwelfare building association contains the provision that the associa­
tion shall erect only dwellings containing small apartments. These
apartments must in the main consist of only three rooms, and must
never have more than four rooms inclusive of kitchen. The association
obligates itself to a proper maintenance of the dwellings to be erected
and of the courtyards and gardens belonging to them. In case of
destruction of the buildings by fire or other untoward events, the
association is obligated to reconstruct them within two years at its
own expense. The city council is authorized to supervise the main­
tenance of the buildings during the last 50 years of the period covered
by the Erbbaurecht.
In the contract of the city of Ulm with the Ulm Building Associa­
tion the latter obligates itself to comply with the orders of the city
poor board as to solidity of construction, architectural outside finish,
and sanitary, safe, and convenient equipment of the interior of the
buildings. In case of noncompliance with this obligation the
association must pay to the city treasury for each month’s delay a
fine of 250 marks ($59.50).
The contract of the city of Mannheim with the savings and building
society imposes the following obligations on the society:
1. To submit in due time to the city council the building plans for
approval and to comply with all orders of the city council relating to
these plans.
2. To erect within five years after the conclusion of the contract
the building specified in the building plans submitted to the city
council and to use this building exclusively for housing purposes
with the exception of four apartments on the main floor which may be
used as a bakery, a butcher shop, a grocery, and some other store.




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255

3. Not to make any changes in the building or in the arrangement
of the apartments without previous approval by the city; the erection
of other structures not provided for in the building plans is to be
considered as such a change.
4. To maintain all structures and equipment above and below
ground in good condition.
5. To prohibit to tenants the subletting of rooms or keeping of
lodgers, and to see that the apartments are not used in any insanitary
manner or for immoral purposes.
6. To obtain the approval of the city for the determination of the
rents to be charged and for any later increase of the same, and not to
collect any higher rents than those approved.
The city is authorized to see that the above provisions are com­
plied with, and the grantee of the Erbbaurecht must comply with
all orders issued by the city in this connection. In case of noncompliance the city is authorized to take the necessary measures at
the expense of the grantee.
In each of the contracts discussed here there are detailed pro­
visions as to the pecuniary settlement at the expiration of the Erbbau­
recht between the owner of the ground and the grantee of the Erb­
baurecht, especially as to whether the buildings erected on the leased
ground are to become the property of the city with or without com­
pensation to the grantee.
According to the contract made by the city of Frankfort-on-theMain all buildings and installations erected on the leased ground be-'
come on the expiration of the Erbbaurecht the property of the city
w i t h o u t any c o m p e n s a t io n t o th e g r a n te e .
The rules published by the city of Aix-la-Chapelle for the granting
of hereditary rights of construction on communal land provide that
the land together with all buildings erected on it shall on the expira­
tion of the grant become the property of the city. To what extent
the grantee is to be compensated depends on the agreement made as
to building loans. In case of payment of a compensation, the follow­
ing rules are to be observed: The grantee is to be compensated for
the value of the buildings erected in a ratio corresponding to the
amount of personal resources invested in the buildings by him or
his successor to the grant. In case the city and the grantee can not
agree as to the value of the buildings, their value shall be determined
by a board of arbitration composed of two members, one named by
the city and the other one by the grantee. If these two arbitrators
can not come to an understanding, they shall select a third member,
who shall act as chairman of the board, and in case they should not
be able to agree on his selection, he shall be named by the president
of the appellate court (Landgericht) . The compensation determined
upon in this manner is to be paid to the grantee in cash. The city




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BULLETIN OF THE BUREAU OF LABOR STATISTICS.

reserves, however, the right to deduct any part not yet refunded of
the building loan granted or other claims.
In Ruhrort-Duisburg the buildings erected on the grant become on
expiration of the Erbbaurecht the property of the city. The city,
however, pays to the grantee a compensation of 25 per cent of the
value of the buildings at the time of the expiration of the grant. The
determination of this value is effected in the same manner as in Aixla-Chapelle. Payment of the compensation takes place only after the
grantee has brought proof that there are no liens on the buildings.
If it can not be proved that the buildings are unencumbered, the city
deposits the compensation in favor of the registered liens.
The contract concluded by the city of Elberfeld provides that after
60 years the buildings erected on the leased ground, with all acces­
sories and installations, become the property of the city. The grantee
receives a compensation of one-half the value of the buildings. The
determination of the value is effected in the same manner as described
in the case of Aix-la-Chapelie.
The contract concluded by the city of Halle expires after 70 years,
at which time all buildings erected on the leased ground become the
property of the city. The city pays to the grantee a compensation
of one-fourth of the value of the buildings at the time of the expira­
tion of the contract.
In the case of Essen all buildings and installations erected on the
leased ground revert, together with the ground, to the city when the
contract has expired. The city pays to the grantee as compensation
the full value of the buildings, as determined at the time of the
expiration of the contract.
In the contract of the city of Leipzig with the public-welfare build­
ing association it is stipulated that on the expiration or dissolution
of the contract all buildings erected on the leased ground shall become
the property of the city without any compensation to the association.
Very detailed provisions are contained in the contract of the city
of Ulm with the local building association. In accordance with these
provisions, on the expiration of the contract the city is authorized
and obligated to take over all buildings erected on the grant and to
pay to the association a compensation determined as follows:
1. The cost of erecting each building is to be taken as its original
value. As soon as a building is completed, the association must sub­
mit to the city a full statement of its cost, accompanied by all bills.
2. To the cost of construction must be added the amount by which
the building has increased in value through improvements, in so far as
this excess value is still in existence at the time of the transfer of the
buildings to the city. Deteriorations of the buildings through use
are,on the other hand, to be deducted from the cost of construction.




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3. The compensation to be paid for each individual building, no
matter what enlargements and improvements it has experienced in
the course of time, may not be higher than the original costs of con­
struction, which are to be considered as the maximum amount of
compensation, without prejudice to further deductions as provided
under No. 4.
4. During the last 20 years of the period covered by the contract
the amount determined as compensation is reduced each year by 1
per cent for deterioration of the buildings. If, in accordance with the
provisions of the contract, the grant is annulled because the grantee
has encumbered the buildings with mortgages in excess of 75 per cent
of their costs of construction, no deduction is made for deterioration
of the buildings if the grant has been in effect for less than 20 years.
A deduction of 1 per cent for each year after the twentieth is made if
the contract was in force from 20 to 40 years. The city will, however,
make no use of its right to make a deduction for deterioration if the
buildings are transferred to it in good condition.
5. The amount of compensation is paid to the mortgage creditors
in so far as this is required to refund the mortgages and interest on
them with which the grant is encumbered. Any remaining balance
is paid to the grantee, as soon as the hereditary right of construction
has been canceled in the land register.
6. The determination of the expenditures of the grantee for
improvements, as well as of the extent to which the structures have
deteriorated, is to be made by a commission consisting of a com­
munal official nominated by the city council, a technical expert
nominated by the grautee, and the chairman of the board of apprais­
ers of valuation for fire insurance purposes as chairman of the com­
mission. The determination made by this commission is binding
on the city as well as on the grantee.
The contract of the city of Mannheim with the building and sav­
ings society provides that after expiration of the period covered by
the contract, unless a new agreement has been made by the parties
before the expiration of this period, all structures erected on the
leased ground shall according to free choice of the city be either
removed within 6 months at the expense of the grantee, or be trans­
ferred to the city free of any liens of third parties. In the latter
case, the city shall pay to the grantee a compensation consisting of
one-fifth of the value of the structures. This value is to be com­
puted by adding one-half of the value of the buildings to one-half of
the capitalized value of usufruct. The determination of the amount
of the compensation is to be made by a board of arbitration composed
like that of Aix-la-Chapelle.
0 6 1 7 1 °— Bull. 158— 15--------17




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B U L L E T IN OE T H E BUREAU OF LABOR STATISTICS.

Two contracts, those of Frankfort on the Main and Aix-la-Chapelle,
authorize the city to cancel the Erbbaurecht after the expiration of
a specified period and this right of cancellation is in no way condi­
tioned on a breach of contract by the grantee. In Frankfort on the
Main, the city is authorized to cancel the Erbbaurecht after expiration
of the first 15 years and the leased ground reverts to the city together
with the buildings erected on it. This right of cancellation may,
however, be exercised by the city only after the expiration of the
first'15 years, and after this period only at the expiration of every
5 subsequent years, and is always conditioned on previous notice
of at least 6 months. Whenever the city makes use of this right
of cancellation, it must assume all the mortgages with wiiich the
buildings are encumbered which w
rere agreed upon in the contract
and must refund to the grantee that part of the building costs which
he has contributed from his own resources and which has not yet
been amortized on the basis of an annual payment of 0.51 per cent.
If the cancellation of the grant takes place within the first 30 years
of its duration, the city must pay to the grantee an additional com­
pensation, consisting of the amount of one year’s ground rent and
one year’s interest on the mortgage with wiiich the Erbbaurecht
is encumbered. The provisions in the contract of the city of Aixla-Chapelle are essentially the same as those given here for Frank­
fort on the Main.
The contracts of the cities of Elberfeld, Halle, and Ulm provide
for cancellation of the Erbbaurecht on the entire tract of land
involved in the grant or on part of it if such a cancellation is required
by reasons of public interest.
In nearly all the contracts of cities granting hereditary rights of
construction there are provisions giving to the city the right to annul
the contract if the grantee fails to comply with his contractual obli­
gations.
The provisions of this kind in the contract concluded by the city of
Frankfort on the Main are as follows: If the grantee does not comply
with his contractual obligations, especially if he transfers the Erb­
baurecht without the city’s approval, or does not punctually pay
the ground rent, or does not comply with his obligations as to the
erection and maintenance of buildings on the grant, or raises the
rents of the dwellings without the approval of the city, the city
shall be authorized to annul the contract, and the ground as well as
the buildings and other structures and installations erected on it
shall become the absolute property of the city. The latter must,
howrever, assume all mortgages, and must pay to the grantee in
full that part of the building costs contributed by him out of his
owrn resources which has been refunded, and must also pay him onehalf of the unrefunded part of these costs.



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259

The conditions under which the city of Aix-la-CIiapelle can annul
contracts granting the hereditary right of construction are in all
essential pointy identical with those given for Frankfort on the Main.
Ruhrort-Duisburg is in the following instances authorized to can­
cel on 8 months’ notice the grant of the hereditary right of con­
struction before its expiration:
1. If the officials’ housing society uses the leased ground for other
purposes than those stipulated in the contract.
2. If the society is for more than three months in arrears with the
payment of the ground rent or for more than 6 months with other
payments for which the commune is liable in a subsidiary manner.
3. If the society within two years after the conclusion of the con­
tract has not erected buildings on the grant in the manner contrac­
tually agreed upon.
4. If the society neglects the maintenance of the buildings in such
a manner that the intervention of the competent authority becomes
necessary, and the objectionable condition of the buildings is not
remedied within the time limit set by that authority, or if the con­
dition of the buildings creates a public nuisance.
5. If all the buildings are not insured to their full value with a
fire insurance company licensed in Prussia, or if after destruction
of large parts of buildings or entire buildings through fire or other
causes the society fails to remedy the damage or to reconstruct the
destroyed buildings within 2 years.
6. If the public-welfare character of the enterprise ceases to exist,
especially if the rents charged become too high.
If the city annuls the contract for one of the above-given reasons
it must compensate the grantee for the value of the buildings in the
following manner: The full value of the buildings at the time of the
annulment of the contract is to be paid if this annulment takes place
within the first 30 years of the period covered by the contract.
In case of annulment of the contract after the first 30 years of its
duration, the estimated value of the buildings is to be reduced for
the next 15 years by 1 per cent for each year and during each of the
following 30 years by 2 per cent. Periods of less than six months
are not to be considered in this computation and periods of over six
months are to be considered a full year.
The city of Elberfeld is authorized to repurchase the Erbbaurecht
whenever the grantee is more than six months in arrears with the
payment of the ground rent, or if after admonition he does not com­
ply with his contractual obligations within a proper time limit. If
such repurchase takes place within the first 35 years of the period
covered by the contract the city must compensate the grantee for
the full value of the buildings; after the thirty-sixth year the com­
pensation is annually reduced by 2 per cent.



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B U L L E T IN

OF TH E BUREAU OF LABOR STATISTICS.

The contract of the city of Leipzig with the public-welfare building
association gives the city the right to annul the contract without
previous notice: (1) If the association is entirely or partly in arrears
with the payment of interest on street-construction costs or of ground
rent after the city has, at intervals of one month, three times requested
payment. (2) If the association transfers the Erbbaurecht to a
third party without previous approval of the city. (3) If the asso­
ciation encumbers the grant with mortgages or otherwise without
the approval of the city. (4) If the city on the basis of a later
agreement should assume the liabilities of the association to the
State Insurance Institute of the Kingdom of Saxony.
In the contracts of the city of Ulm it is provided that the city may
immediately annul the grant if the grantee does not within three
years rebuild any building which has been destroyed by fire, or- if
he encumbers the grant with mortgages in excess of 75 per cent of
the initial building costs.
In its contract with the building and savings society, the city of
Mannheim has reserved the right to demand that the Erbbaurecht
and all buildings erected in pursuance of the same shall be transferred
to it without compensation and free of aiw liens of third parties or of
the grants, if the grantee does not comply with his contractual obli­
gations as to the submitting of the building plans to the city and the
encumbrance of the Erbbaurecht with mortgages, or as to unau­
thorized transfer, or if he is more than one year in arrears with the
payment of ground rent, interest on mortgages, or the refunding
annuities agreed upon in the contract.
The possibility of obtaining loans for the erection of buildings on
the grant is of vast importance to the grantee of the hereditary
right of construction after the conclusion of the contract. Such
loans are usually made only against a mortgage on the Erbbaurecht.
Mortgages upon hereditary rights of construction are, however,
according to a decision of the imperial insurance office not to be
considered as safe investments for trust funds, a decision which pre­
vents the State insurance institutes, which are the chief lenders of
money for building operations, from making building loans on hered­
itary rights of construction under the usual conditions.
The contracts reproduced in the report of the imperial statistical
office on housing work show that the cities of Frankfort on the Main
and Aix-la-Chapelle themselves make building loans to grantees of
hereditary rights of construction.
The city of Frankfort on the Main as a rule makes building loans
to grantees of rights of hereditary construction up to 75 per cent, and
in the case of buildings erected by communal officials and teachers or
one-family houses erected by State officials, up to 90 per cent of the




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261

building costs. The rate of interest is 4 per cent, and for communal
officials and teachers 3J per cent. The loans are to be refunded by
means of annuities of 0.42 and 0.5 per cent, respectively. The grantee
must, therefore, contribute 10 to 25 per cent of the building costs from
his own resources. What portion of this sum is refunded to him on
the expiration of the contract depends on the individual agreement.
In case of a transfer of the hereditary right of construction without
the approval of the city— except by inheritance-— the city is authorized
to raise the rate of interest for the building loan up to 5 per cent or
to recall the loan on 4 weeks7notice. The city has the right of imme­
diate execution whenever the debtor is in arrears with payments on
the loan; this right is also applicable to any successor of the original
debtor. If the debtor is more than one month in arrears with the
payment of a refunding annuity or if he transfers the Erbbaurecht
and the city is not willing that the new purchaser of the grant should
assume also the building loan made by the city, it may without
previous notice demand immediate payment of the unpaid part of
the loan. Refunding annuities due always precede in rank that
amount of the loan which has been refunded.
The city of Aix-la-Chapelle makes building loans to grantees of
the hereditary right of construction up to 90 per cent of the building
costs. The rate of interest charged is 3J to 4 per cent. Such loans
are to be refunded within the period covered by the grant by means of
annual payments of at least 0.42 per cent. All other conditions are
essentially the same as in the case of Frankfort on the Main.
The contract between the city of Essen and the United Building
and Savings Society shows that the State Insurance Institute of the
Rhine Province has made a building loan of 212,000 marks ($50,456)
to the society on mortgage security. The society has also mortgaged
to the insurance institute its claim to compensation for the value of
the buildings on the expiration of the period covered by the grant.
In the contract of the city of Leipzig granting to the public-welfare
building association the hereditary right of construction on specified
communal lands there is in article 2 the following provision: “ The
association shall, in so far as its capital stock and its other resources
are not sufficient, raise the capital necessary for building purposes
by means of mortgage loans. Such mortgage loans must be subject
to regular refund which must be completed within the period covered
by the grant. The grant may not be encumbered with mortgages,
nor may the association’s own liens upon the building be transferred
without the approval of the city in every instance. A like approval
is required for any other encumbrance of the grant. In case of
contravention of this provision by the association the city may annul
the grant without previous notice. This right must be entered in
the land register.”



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B U L L E T IN

OF TH E BUREAU OF LABOR STATISTICS.

The manner in which the Mannheim building and saving society has
obtained building loans on the Erbbaurechte granted to it by the city
of Mannheim from the city itself as well as from the communal savings
bank has already been described on page 241. Of fundamental
importance, however, is the loan contract which the society concluded
with the State Insurance Institute of Baden. The society applied in
1907 to the insurance institute for a building loan on an Erbbaurecht
grant. As the insurance institute may loan its funds only on buildings
which are to be used as dwellings for workmen subject to invalidity
insurance, and as a large part of the buildings to be erected by the
society on the grant were to be given over to the use of officials and
employees of the Empire, State, and commune and of merchants, and
to small tradespeople, teachers, etc., not all of whom belong to the
classes subject to insurance, the society made application for a build­
ing loan only on that part of the buildings which was to be used for
persons subject to insurance. It accordingly offered as security a
mortgage on the Erbbaurecht and on the buildings erected on the
larger part of the northern half of the grant of an estimated value of
346,000 marks ($82,348). The insurance institute was willing to make
the loan. But loans secured by a mortgage on hereditary rights of
construction are not always considered safe investments for trust
funds, and the imperial insurance office has in several instances
recommended insurance institutes to demand additional security on
such loans. Therefore, in this case the insurance institute made the
loan conditional on its guaranty by the city of Mannheim. The city
assumed this guaranty with the approval of the State, provided
that the insurance institute would within two weeks notify it in writing
of any increase of the rate of interest as a consequence of nonpayment
of interest due (art. 2, par. 2 of the loan contract), and within 4 weeks
if the society should be one year in arrears with the payment of
interest or of a refunding annuity. This preliminary condition having
been complied with, the State Insurance Institute of Baden granted in
October, 1907, to the building and savings society a loan of 300,000
marks ($71,400) for the erection of workmen’s dwellings in the city
of Mannheim under the following conditions:
(a) The loan must be secured by a first mortgage on the hereditary
right of construction and on the buildings to be erected on the grant
before the amount of the loan or any part of it is paid to the borrower.
(b) The loan is to be paid over to the borrower in installments,
according to the progress of the buildings, after submission of an
officially attested statement of the expenditures made. These install­
ments may not, however, exceed 80 per cent of the provisionally
computed total amount of the loam After the completion of the
buildings the borrower must have their value officially estimated and
must submit this estimate to the insurance institute.
(c) The loan must be used for the erection of workmen’s dwellings
in the district of Mannheim. The conditions under which the dwellings



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263

are rented must harmonize with the purpose for which they were
erected. The insurance institute shall be authorized to make changes
in these conditions. Under all circumstances these rules must be
observed: (1) Dwellings in a number corresponding to the ratio
which the amount of the building loan granted by the insurance
institute bears to the total building costs shall be reserved exclusively
for rental to persons insured with the insurance institute who do not
own a home and who intend to occupy the rented apartments them­
selves. (2) Rentals for apartments may not be raised and the
apartments rented to the highest bidder; and (3) rents in so far as
they are to be paid by employers, shall be apportioned into as many
parts as the renter receives wage payments, and be paid or collected
on pay days.
(d) The State insurance institute shall have the right to inspect at
any time tho buildings mortgaged to it. The borrower shall be
obligated to make all necessary installations or changes requested
by the insurance institute for sanitary or moral reasons.
(e) The State insurance institute shall be granted the right of refusal
on everything mortgaged to it.
The rate of interest charged is 3J per cent and the loan must be
refunded within 50 years by means of semiannual payments of 6,375
marks ($1,517.25).
SALE O F D W E L L IN G S

BY

M U N IC IP AL ITIES W IT H
R EPUR CH ASE.

R E SE R VA TIO N

OF T H E

R IG H T OF

Very similar to the hereditary right of construction (Erbbaurecht)
is the procedure of the right of repurchase ( Wiederkaufsrecht)
adopted by the city of Ulm. In this procedure the city transfers the
land together with the building erected on it to the purchaser as his
property, reserving, however, by entry in the land register, the right
to repurchase land and building within 100 years at the original price
whenever there is a change of ownership or if the owner does not
comply with the obligations assumed by him at the time of the
purchase. The party acquiring the land and building is, in the
contract reserving the right of repurchase, in contrast to the
contract granting the right of hereditary construction, called the
‘ ‘ owner ’ ’ (Eigeniumer) . Beyond his title he has very few advantages
over a grantee of the hereditary right of construction, because if the
right of repurchase becomes active, as, for instance, in the case of
death and distribution of inheritance, the city may terminate his
ownership and invalidate any mortgages he may have given on the
property.
The city of Ulm began the erection of workmen’s dwellings on its
own account on February 8, 1894, when it started to build 16 double
houses. During the succeeding years this first group of houses was
followed by others and at the beginning of 1910 the city had erected
175 workmen’s dwellings. Among the purchasers of the dwellings
were 55 persons in the mail and railway service, 88 mechanics and




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B U L L E T IN

OF T H E BUREAU OF LABOR STATISTICS.

factory workers, 9 day laborers, 8 persons exercising an industry
independently, 7 workman employed in the military commissary
department and in the arsenal, 1 State employee, and 7 employees
of the communal building department.
A publication of Mayor Wagner of Ulm 1 describes the architec­
ture and inner construction of the houses erected by the city, as well
as their cost to the purchaser. A description of two representative
types follows:
(a) Dwelling, of 2 stories and attic, containing 2 apartments, each
of which consists of 2 rooms, kitchen, toilet, hall, cellar, woodshed,
laundry, and carries with it a share in a common garden. The floor
space of the two rooms is together 34 square meters (366 square feet),
of the kitchen 9 square meters (96.9 square feet) and of the garden for
2 apartments 162 square meters (1,743.8 square feet). The total cost
of the building lot inclusive of garden and of the dwelling erected
on it is 6>000 marks ($1,428). The purchaser must annually pay
330 marks ($78.54) or 5J per cent of the entire cost, of which 3 per
cent is for interest and 2|- per cent for refund. Cost of maintenance,
real estate taxes, and water tax amount annually to 60 marks ($14.28).
The purchaser of the dwelling on the other hand receives annually
140 marks ($33.32) rent for the second apartment, so that his net
annual outlay is only 250 marks ($59.50).
(b) Dwelling, of 2 stories and attic, containing 2 apartments, each
of which consists of 3 rooms, kitchen, toilet, hall, cellar, woodshed,
laundry, and carries with it a share in the common garden. The floor
space of the three rooms is together 42 square meters (452.1 square
feet), of the kitchen 7 square meters (75.3 square feet) and of the
garden for both apartments 180 square meters (1,937.5 square feet).
The total cost is 8200 marks ($1951.60). The purchaser pays annu­
ally interest and refund to the amount of 451 marks ($107.34), The
costs of maintenance, real estate taxes, and water tax amount to 79
marks ($18.80) per year. His receipts are 220 marks ($52.36) per
year for rent of the second apartment, and his net annual outlay for
the dwelling therefore is only 310 marks ($73.78).
The conditions under which the houses were sold by the city were
subject to change during the period covered by the right of repur­
chase. The contracts of sale for the first two groups of houses
erected provide only for a right of repurchase during the first 15 years
after the sale. The conditions for the sale of houses subsequently
erected were entirely revised in 1902 and are more stringent than the
original conditions. A large number of owners of the first two
groups of houses sold accepted them.
1

Wagner: Oberbiirgermeister: Die Thiltigkeit der S ta d tU lm a . D . auf dem Gebiete der Wohnungsfur-

sorge fiir Arbeiter und Bedtenstete (Hauser zum Eigenerworb).




U lm , 1903.

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265

In its present form the contract of sale grants the city the right
of repurchase for a period of 100 years. The city may exercise this
right in the following instances:
(а) If the debtor or his heirs are more than 6 months in arrears
with a payment contractually agreed upon and no respite has been
granted to them by the city.
(б) If and as often as the owner of the property and his assigns,
especially his heirs, within 100 years after the date of the sale wish
to transfer the property. This is also applicable if joint heirs who
have inherited the property transfer it to one or several of the heirs.
(c)
If the owner of the dwelling after admonition in writing con­
tinues to rent apartments in his dwelling at a rental higher than the
maximum rental determined by the city council.
id) If the owner, without the approval of the city council, en­
cumbers the property with a further mortgage.
(e)
If the owner does not live in the dwelling himself although
repeatedly requested to do so.
(/) If he refuses to refund to the city the actual building costs as
accounted for by the communal building department.
(g) If he willfully or by gross negligence injures the property and
lessens its value.
Qi) If the property is attached or the owner becomes bankrupt;
and
(i)
If the owner without the approval of the city takes in lodgers
or a larger number of them than is permitted, or places them in rooms
not designated as living rooms, or if without approval of the city he
uses the ground or dwelling for industrial purposes.
The purchaser must, at the time of the sale, make a first payment
of 10 per cent of the costs of ground and building; on the balance he
is to pay 3 per cent interest and 1-J per cent annual refund. The pay­
ment of refund and interest is to be made quarterly. If the pur­
chaser is in arrears for the past quarter the rate of interest is increased
to 4 per cent; this, however, is not charged for the first month during
which the payment was overdue. Payments in excess of the amounts
agreed upon for the purpose of faster refund of the total debt are
permissible. In cases of sickness or in other extraordinary circum­
stances the city may grant the debtor a temporary respite for pay­
ment due. The city reserves the right to increase the rate of interest
if it should have to pay a higher interest than 3 per cent on the loans
made to it, for the erection of workmen’s dwellings, by the communal
savings bank of Ulm and the Insurance Institute of Wurttemberg.
When one-half of the purchase price has been refunded, the city
may demand that the balance be paid on six months’ notice. If the
owner, in order to obtain the money required for this payment, must
give a new mortgage on his property, the city shall permit the can­
cellation of its own mortgage and the registration of the new mortgage
in its place.




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B U L L E T IN

OF TH E BUREAU OF LABOR STATISTICS.

The owner may, after one-half of the purchase price has been paid
by him, discontinue further refund. The city council is, however, in
such a case authorized to increase the rate of interest to the current
rate.
Of great importance is the determination of the sum to be paid in
case of repurchase. According to the provisions of the contract of
sale, this sum is determined by a board of valuation. The price paid
for ground and building at the time of its erection is taken as a basis;
to this amount is added the amount by which the value of the building
has been increased through improvements, so far as this excess value
is in existence at the time of repurchase, and any decrease in value
caused by deterioration of the building is deducted. The board of
valuation is to be composed of a communal official nominated by the
city council, a technical expert nominated by the owner of the prop­
erty, and the chairman of the board of appraisers of valuation for
fire insurance purposes, as chairman of the board.
The city reserves a special right of repurchase for a period of 200
years on all gardens in front of the buildings sold, in case it should
have to repurchase the area occupied by them for the purpose of
widening the street. The price for this repurchase is stipulated in
advance in the contract of sale, and the owner has no claim for com­
pensation for improvements made in the garden area; he is, however,
authorized to remove these improvements.
The contract of sale further obligates the purchaser to keep the
building in a good condition, to make all repairs required in due time,
and to obey all orders of the city relating to the maintenance of the
building. No essential alterations may be made on the building
without the approval of the city council, which has at all times the
right to inspect it.
PROPOSED HOUSING REFORMS.

It is manifest that housing conditions in Germany are in great need
of reform, and it is generally admitted that legislation could do much
to improve them. “ In no sp h ere/’ said Miquel, the former Prussian
minister of finance, “ is there greater danger of legislatures failing
to recognize the auspicious moment for the enactment of laws than in
the sphere of the housing problem; nowhere, moroever, is it more diffi­
cult- to overcome inveterate bad habits, nowhere more expensive to
remove existing nuisances than in building matters and in the use of
dwellings.”
Social economists and housing reformers believe that this auspi­
cious moment has come, and that legislation should early, and without
delay, do whatever it can to improve housing conditions. The
steady development during the last two decades of the organized
movement of housing reform, and the natural reaction of the popu­



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267

lation against the serious menace of the concentration of the masses
in large cities and tenements are additional arguments in favor of
legislative action. There is a growing feeling that in view of what
has already been accomplished in the fields of social insurance and
protective labor legislation it is time for Germany to transfer its legis­
lative activity to the sphere of housing reform. As a consequence
there is a pressing demand for housing legislation on a large scale.
The housing problem has on many occasions been discussed in the
Reichstag. Motions and resolutions as to enactment of an imperial
housing law were made and adopted by the Center, the National Lib­
erals, the Social Democrats, and the Reform Party ('Wirtschaftliche
Vereinigung). The imperial secretary of the interior, on February
29, 1912, declared that the Empire could proceed in this respect only
if the individual States declined to take any action. And on March 6,
1912, he held out the prospect to the budget committee of the Reich­
stag that before the beginning of the fall session of the Reichstag the
Federal Government would decide on its attitude as to the question
of an imperial housing law. The Reichstag, thereupon, on the
motion of the Center and National Liberals, resolved to create a
special committee of 21 members for the discussion of all motions
of the various parties as to housing reform legislation.
This committee held its first meeting April 17, 1912. Its chairman
stated that the Empire is obligated and authorized to enact housing
legislation because the health and defensive strength of the German
nation are concerned; that on the basis of article 4 of the constitution,
dealing with the public health, the Empire is also competent to ennct
such legislation. The Empire should enact a basic law with minimum
regulations and authorize the Federal States to determine the details
and go beyond the minimum requirements. He laid special stress
upon the importance of cheap credit sources for the public-welfare
building activity and expressed the hope that it might be possible to
authorize the State insurance institutes to issue real estate mortgage
bonds. He also advocated an amendment of the law relating to the
hereditary right of construction (Erbbaurecht). Several members
of the committee demanded the creation of an imperial housing office
(Reichswohnungsamt) . A subcommittee of six members was finally
charged with the further preparatory work.
The result of the activity of the housing commission of the Reich­
stag was a resolution which, on May 22, 1912, was unanimously
adopted by the Reichstag. This resolution requested the Govern­
ment to introduce at the next session of the Reichstag bills for the
regulation of the housing problem, and proposed that the following
basic principles be observed in the drafting of these bills:
1.
Minimum regulations as to the nature and use of dwellings (loca­
tion, air space, ventilation, and light in the living, sleeping, and work­



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B U L L E T IN OF T H E BUREAU OF LABOR STATISTICS.

rooms, number and equipment of toilet rooms, keeping of lodgers,
etc.), with consideration of the special conditions in urban and rural
communities.
2. Regulations as to an official housing inspection through local,
district, and State housing officers, with an imperial housing office as
central bureau for all housing matters.
3. Creation of real estate mortgage institutes in connection with
.the State insurance institutes for the purpose of granting, according
to fixed regulations, the highest possible mortgage loans on dwellings
with small apartments, to building associations and private indi­
viduals.
4. Regulation of the renting system through renting bureaus.
5. Development of the hereditary right of construction ( Erbbaurecht) so that it may be used more extensively in providing dwell­
ings with small apartments.
The housing commission determined also to request the Federal
Governments to publish annually the results of the housing inspec­
tion, as w ell as statistics of the real estate market, of rents, and of the
7
building activity.
Finally, the housing commission resolved to request that the im­
perial chancellor should, in proper form, direct his efforts to the pro­
motion of the erection of workmen’s dwellings by way of State legis­
lation. The following measures w
rere suggested:
(1) Determination, with due consideration of urban and rural
conditions, of standard rules for the division of land; town planning
and building regulations for the purpose of lessening the cost and
facilitating the erection of workmen's dwellings; and regulations for
promoting a more detached building system and a decentralized
form of settlement.
(2) Grants by the State and commune of reduction of or exemption
from taxes and other dues to owners of workmen’s dwellings;
(3) Grant of the right of expropriation to communes for the removal
of serious nuisances in the building and housing system, wiiich are a
hindrance to the building activity, and of old buildings unfit for
housing purposes.
Manifold reforms have been proposed in connection with the organ­
ized movement of housing reform. None of these proposals claims
to be a cure-all, for the needs and conditions in the various localities,
especially in the large cities, medium sized cities, and rural com­
munes. are very diversified, and measures of varying nature, private
efforts, and compulsory regulation by the public authorities must
supplement one another. Only two of these many proposals need be
mentioned here, the request to the Reichstag for an imperial housing
law by the Association for Social Reform, and the resolutions passed
by the Federation of German Land Reformers {Blind der deutschen
Bodenreformer) .
In January, 1913, the directorate of the Association for Social
Reform submitted to the Federal Council {Bundesrath) and to the




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269

Reichstag, an urgent request “ that the preliminary work of housing
legislation be so hastened as to make possible the passage of an
imperial housing law during the present session of the Reichstag.7
7
The text of this request was as follows:
A thorough improvement of the housing conditions of people of
small means is one of the most important and urgent tasks of social
reform. Nearly all other endeavors for the elevation of the working
classes, for combating national diseases, alcoholism and immorality,
for strengthening family life, and for the extension of education can
be really successful only if the serious nuisances of our housing con­
ditions are removed. In support of this argument need only be men­
tioned the frequent deplorable experience that the permanence of
the cure in no way corresponds to the great expenditures made by
the State insurance institutes for homes for convalescents and sanatoriums, because the patients must return to overcrowded rooms lack­
ing air and light, in which their health is again menaced.
The Association for Social Reform, together with all parties inter­
ested in the public weal, was, therefore, highly gratified that, on
May 22, 1912, the Reichstag unanimously expressed its sense of the
necessity of housing reform. The association emphatically condemns
as groundless all objections lately raised against an imperial regu­
lation. The Empire must be the chief promotor of housing reform.
It must determine its basic principles. A division of the reform
work would cause its entire failure.
The association agrees in this respect entirely with the demands of
the Second German Housing Conference held at Frankfort on the Main
on November 9, 1912. The Empire should especially create a system
of housing inspection, determining what kind of dwellings are to be
subject to inspection and regulating in a uniform manner the organi­
zation of the inspection service. The housing inspection service
should be combined with information bureaus keeping lists of vacant
houses and apartments, and both these institutions should be under
the supervision of housing offices ( Wohnungsamter) to be newly created
in all large communities.
The Association for Social Reform further requests all legislative
bodies of the Empire to take measures for the promotion of the
erection of workmen’s dwellings and for the reduction of rents. It is
urgently necessary that the obtaining of building mortgage loans be
facilitated, for the present lack of proper credit sources is a great
obstacle to the erection of workmen’s dwellings. The association
recommends, also, that the hereditary right of construction (Erbbaurechi) be further developed so as to counteract as much as possi­
ble the influence of the price of land upon the rents.
With respect to further reductions of the cost of housing, the
Association for Social Reform agrees entirely with the demands
voiced in the resolution of the Reichstag submitted to the individual
State diets as to exemptions from and reduction of taxes and other
dues, as to the grant of the right of expropriation in order to facilitate
the erection of workmen’s dwellings, and as to amendment of the
building regulations.
Only if the above-named measures are carried on simultaneously
under the leadership of the Empire, may that gradual rehabilitation
of our housing conditions be achieved, which the majority of the



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German population, indeed the entire nation, needs for tlio conserva­
tion of its defensive strength and economic efficiency, and its moral
and physical health.
The land reformers (Bodenreformer) who to-day in their Federa­
tion of German Land Reformers {Bund der deutschen Bodenreformer)
are one of the strongest organizations in the movement for housing
reform, stood originally for the principle of strict separation of the
ownership of the land from that of the buildings erected on it, and
wanted the communes to own all the land, which should never be
transferred by them but merely leased to builders. Persons of small
means would then be safe in the possession of the dwellings erected
by them on the leased communal land, as any possibility of raising
mortgage loans on these dwellings or of encumbrance in case of divi­
sion of an inheritance would be excluded.
Some of the adherents and members of the federation maintain
even to-day this point of view. Heinrich Freese, the former presi­
dent of the federation and now its honorary member, says, for
instance:1
The only solution is the communalization of urban land. If this is
withdrawn from speculation, land usury and scarcity of dwellings will
cease without further action.
Yon Mangoldt, secretary general of the German Society for Housing
Reform, has similar views. He considers the growth of cities as a
process which must be withdrawn from private and transferred to
public enterprise.2
The majority, however, of the members of the Federation of Ger­
man Land Reformers and especially their president, Damaschke,
stand, since the reorganization of the federation in 1898, for a less
radical program.
The program formulated in that year says:
The federation advocates that the land, this necessity of all
national existence, be subject to a law which promotes its use as a
dwelling and working place and excludes any improper use of it,
and that the increase in its value caused without labor of the indi­
vidual shall as far as possible accrue to the entire nation.
Damaschke makes, like Henry George, a fundamental distinc­
tion between land and capital. Capital, he says, is a good acquired
by labor, while land is a natural good not acquired by labor; the
income from capital, the interest, is therefore justified, but the
income from land, the ground rent, is not justified. The ground
rent should become social property, while the earnings of capital and
labor, on the other hand, should be looked upon as the returns of
free individual activity. The modern land reform movement, in
1 Freese, Heinr i c h :

Bodenreform.

G o t h a , 1907, p . 10.

2V o n M a n g o ld t, Dr. K.: D i e stadtische Bodenfrage.




G o t t i n g e n , 1907.

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271

contrast to Henry George, does not, however, intend to confiscate
the entire ground rent; it does not advocate State ownership of all
land or any other thoroughgoing economic revolution; it wants to
attain its goal through gradual organic evolution. It, therefore,
makes a distinction between the ‘ ‘ground rent of yesterday” and
the i ‘ground rent of to-morrow.” It accepts the “ ground rent of
yesterday,” which has been created in the past, as a given fact; the
ground rent, however, which is going to be created in the future,
and which without any labor of the owner of the ground increases
through the evolution of society, the so-called “ unearned incre­
ment,” should be gained for the entire community.
In his work “ Tasks of the Communal P olicy” (.Aufgaben der
Gemeindepolitik) Damaschke explicitly declares himself opposed to
communalization of the urban real estate:
It is manifest that the unearned increment can be best and most
surely gained for the community if all land is owned by the com­
mune itself. Such a transfer, however, of the entire urban real
estate in the immediate future into direct ownership of the com­
mune is beyond the scope of a practical social policy. Nay, it is
even doubtful, whether such a goal, especially in a form which would
include communal administration of the entire land, can be consid­
ered immediately desirable. As things are, the power of communal
bureaucracy would be considerably strengthened, and the actual
or fancied dependence of large numbers upon the party in power in
the city hall would increase, manifestations which certainly would
raise many objections.
The activity of the modem land reformers is to-day concentrated
in a vigorous agitation for the adoption of a ground tax according to
the actual value of the ground, and of an unearned increment tax.
The ground tax according to the actual value of the ground would
remove the disadvantage connected with the existing ground tax
system, that very valuable unimproved building lots pay hardly
any tax at all, and the unearned increment tax would obtain for the
people as a whole the unearned increment or the largest possible part
of it.
The Federation of Land Reformers advocates, moreover, positive
measures for the improvement of housing conditions. Its legisla­
tive program makes the following demands:
(a) Of the individual States: Extension of the expropriation laws
in such a manner that communes and building associations whose
permanent public-welfare character is assured, shall be authorized to
expropriate the land needed by them for building purposes;
(b) Of the communes:
1. The greatest possible use of the right of expropriation to be
granted to them according to (a);
2. Assistance to public-welfare building associations through the
granting of building loans ; and




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3. Through conservation of the land owned by communes, and, as
much as possible, new acquisition of land by them.
4. Transfer of land to private parties only in such a form as shall
retain to the whole community the ownership of the land, and
together with it, the increase in its value to be expected in the future.
As best means for this purpose is recommended the hereditary right
of construction (Erbbaurecht) in the meaning of articles 1012 to 1017
of the civil code.
5. A graduated ground and house tax according to the actual value
in place of the value of usufruct ;
6. Introduction of a special building lot tax (.Bauplatzsteuer) on
unimproved land which is not used for cultivation (agriculture,
horticulture, e tc.); and,
7. Introduction of a transfer or unearned increment tax ( Vmsatz
oder Zuwachssteuer) graduated according to the amount obtained
by the seller above his purchase price inclusive of the cost of new
installations, additions, and alterations.
The majority of the demands in the legislative program of the land
reformers are acceptable to those who otherwise do not agree with
their fundamental theories, and recent developments— the introduc­
tion in all cities with more than 50,000 inhabitants, with the excep­
tion of Halle, of a ground tax according to the actual value of the
ground, and in hundreds of communes of an unearned increment tax,
as well as extensive experiments made with the hereditary right of
construction and right of repurchase— have brought a number of
them nearer to realization.
All of the various housing reform movements recommend also an
amendment of the communal election laws. Under the present
system of communal elections the city councils are composed mainly
of landlords, who, as a matter of course, are opposed to any thorough­
going housing reforms.
The hopes of the housing reformers for the early enactment of an
imperial housing law experienced a serious setback when, on January
21, 1913, Secretary of the Interior Dr. Delbruck made before the
budget committee of the Reichstag the declaration that he still main­
tained that housing legislation should be left to the individual Federal
States, and that an overwhelming majority of the latter had declared
themselves opposed to any imperial legislation in this sphere. He
further stated that he had considered whether the Empire could not
at least frame some general basic regulations as to housing inspec­
tion, and leave other parts of housing legislation to regulation by the
Federal Council, but this plan proved unsatisfactory as, under such a
division, the imperial law could do little but enjoin or admonish. He
could, therefore, see no hope for imperial legislation on housing
matters; but this, however, did not mean that the Empire could do
nothing at all in the matter of housing reform. The Empire could,
for instance, to a considerable extent, guarantee building loans for




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273

the erection of dwellings for people of small means. Up to date
detailed plans for such action had not been formulated, but he hoped
to be able to submit basic principles for it in the near future.
A member of the budget committee thereupon remarked that this
declaration meant a dark outlook for imperial housing reforms; in
view of this attempt to throw the responsibility of housing legislation
upon the Federal States, it should be considered whether pressure
could not be brought upon them by trying to enact a basic law during
the present session of the Reichstag, even though the hope of passing
such a law might be very small. The secretary of the interior
thereupon declared that it was far from his wish to throw the respon­
sibility for housing legislation upon Prussia or any other Federal
State. With respect to Prussia, he declared and promised that if
the Prussian Government did not before the fall of 1913 submit a
draft of a housing law, he would use his influence to induce the
Imperial Government to prepare a housing bill.
The answer of the Prussian Government to the discussions of the
budget committee and to the declaration of Secretary of the Interior
Dr. Delbriick came very soon. The draft of a housing law for
Prussia was published January 25, 1913. The diet being, however,
near the end of its term, the draft was not discussed by it. It is
expected that its discussion will be taken up by the succeeding diet.1
The introduction giving the general motives of the bill acknowl­
edges unreservedly the existence of a scarcity of dwellings and the
necessity for reform. It says:
Even if essential progress has been made in the sphere of housing
matters as a consequence of the increased attention given to them
by the communes and by reason of extensive development of the
activity of public-welfare and cooperative building associations, there
are still very objectionable conditions of a more than transitory
nature not merely in the large cities, but in all those communes which
show a rapid increase in population, and practically in all those parts
of the country in which industry is especially well developed.
In these localities many people live in rooms so small and so lack­
ing in privacy that neither the requirements of hygiene nor of family
life can be met. Dwellings for people of limited means are often so
unsatisfactory and insanitary as to be entirely unfit for permanent
occupation. The supply of small apartments is insufficient and rents
are frequently out of all proportion to the incomes of the wage
earners. As a result, overcrowding is common, and so is the practice
of taking lodgers. The risks of thus introducing strangers into a
crowded family life are well known.
These conditions are due to the fact that the erection of dwellings
with small sanitary apartments has not kept pace with the increase
of population, while at the same time old houses in which families of
small means could find fairly good housing accommodations have
1 Soziale Praxis und Archiv fiir Volks wohlfahrt, V ol. X X I I , N o. 18, p. 513.
6 6 1 7 1 ° — B u ll. 1 5 8 — 1 5 -------- 18




Berlin, 1913.

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B U L L E T IN OF T H E BU REA U OF LABOR STATISTIQS.

been demolished. In addition, as a result of unsound land and
building speculation, rents have been raised unduly. Consequently,
people of small means must either satisfy themselves with apart­
ments wholly inadequate to their needs, or, if they can not find these
and must take larger ones, they are obliged to make up the rent by
keeping boarders or lodgers.
Another adverse factor which has made itself felt not only in large
cities and their suburbs, but even to some extent in industrial villages,
is the tendency to put up dwellings of four stories or even higher.
This tendency is increasing to an extent not justified by the present
cost of building land; it results both in increasing land values and in
forcing the poor into apartments which are undesirable on account
of their being located too high up. The State government has
already tried to remedy these objectionable conditions by means of
extensive administrative measures.
The measures for remedying these unsatisfactory housing condi­
tions are in the first place directed to promoting the erection of
dwellings with small apartments unobjectionable in sanitary and
moral respects, to removing all obstacles in the way of this object,
and to keeping rents within proper limits. The draft of the housing
law expresses this purpose in the introductory section, as follows:
In the first place measures for combating unsound land specula­
tion are to be considered. High speculative prices of land prevent
the erection of dwellings with small apartments and raise the rents
beyond the means of the poorer classes of the population. To pre­
vent unsound* land speculation the communes should adopt a sys­
tematic land policy with suitable measures for assessing the value of
real estate, and should adjust their tax measures to this end. Above
all, this purpose should be kept in view in planning town extensions,
in determining street lines, and in formulating building regulations.
Article 1 of the draft dealing with building lands provides, there­
fore:
The local police authorities may demand the determination of
street lines whenever the public interests to be safeguarded by the
police or housing needs require such a determination; in the latter
instance, however, it requires the approval of the communal super­
visory authorities.
For special reasons the building regulations may permit the erec­
tion of buildings back of the street lines.
Care shall further be taken in the interests of housing needs that
public squares, as well as gardens, and play and recreation grounds,
are provided, and that building blocks of suitable depth and streets
of greater or smaller width corresponding to the varied housing
needs, be created and that building lands be by decree opened for
building purposes in a measure corresponding to the housing needs.
These provisions are intended to supplement the building regu­
lations hitherto in force in such a manner as to provide a safe legal
basis for the enactment of graduated building regulations. The
statement of the motives for the law continues thus: “ In the case




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275

of a number of communes the division of the land among many
owners constitutes a condition which demands remedy. This con­
dition impedes building activity, tends to raise the price of land,
and makes it possible for individual owners to keep tracts of land
needed for building purposes permanently out of the market. In
addition it frequently leads to the erection by private owners of
unsuitable and unhygienic buildings.” To remedy this evil the fol­
lowing measures as to expropriation and consolidation of holdings
are proposed:
Whenever a street or parts of a street have been made ready for
public traffic and for building purposes, the commune shall be au­
thorized to expropriate, with compensation to the owner, any parcel
of ground adjoining the line of the street, or of a part of the street
which, according to the local building regulations, is not suited for
building purposes * ' * * .
If parcels expropriated in this manner are neither together nor in
connection with other parcels owned by the commune suited for
building purposes, the commune shall be obligated to transfer these
expropriated parcels of ground to the owners of adjoining ground, if
the latter request it, upon refund of the costs of the ground and
interest. If the expropriated land adjoins several pieces of property
and the owners of the latter can not agree upon a division of the
expropriated land, the commune must devise a plan for the suit­
able assignment of the expropriated land and for a division of its
costs * * *
The law as to the expropriation of parcels of ground in Frankfort
on the Main (lex Adickes) is herewith extended to the entire State,
in so far as this has not already been done by special laws.
Article 2 of the draft deals with building regulations. Building
ordinances may especially regulate:
1. The extent to which exploitation of the grounds by buildings is
permissible.
2. The designation of special localities in which it shall not be
permissible to put up establishments which in operation are apt to
produce malodorous vapors, heavy smoke, or unusual noise, or to
cause dangers, annoyances, or disadvantages to the neighborhood
or the general public.
3. The plastering and painting or the pointing of buildings used
chiefly for housing purposes and buildings fronting streets and
squares.
In so far as the development in building matters requires it, the
building ordinances shall contain provisions as to the construction of
the dwellings, especially as to solidity and fireproofing, which shall be
modified according to whether they apply to large or small dwellings.
If building ordinances for large districts contain provisions which
apply alike to large and small communes, they shall make varied
provision as to the height of the buildings and as to the permissible
number of stories, with due consideration to special conditions in the
communes of the district.



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In so far as conditions require it, provision shall be made by
means of police ordinances for the construction and maintenance of
local streets graduated according to the character of these streets as
traffic or residence streets.
Of great importance, provided that they are applied energetically
and intelligently, are the provisions contained in article 3 relating
to the use of dwellings for living and sleeping purposes. The provi­
sions relating to the issuance of housing regulations do not set up
specified minimum requirements as to floor and air space, but they
allow the authorities great latitude in regulating these matters.
General regulations as to the use of buildings for living and sleeping
purposes (housing regulations) may be issued by means of police
ordinances for communes and domanial districts (Gutsbezirke) . The
issuing of such regulations is obligatory in the case of communes and
domanial districts with more than 10,000 inhabitants.
The housing regulations may provide that only those rooms shall
be used as living and sleeping rooms and kitchens which have been
approved by the building authorities as fit for permanent housing
purposes.
The housing regulations may further contain special regulations
as to:
1. Construction and maintenance of living and sleeping rooms and
kitchens in a hygienic manner.
2. Separation of the living and sleeping rooms and kitchens used
by different households.
3. The number and nature of the required cooking places, toilets,
water taps, and sinks.
4. The number of persons wdio, in the interests of hygiene and
morals, may be permitted to occupy the individual living and sleeping
rooms and kitchens.
5. The equipment, furniture, and maintenance of sleeping rooms
assigned by masters or employers to servants or journeymen, helpers,
and apprentices.
6. The conditions under which persons not belonging to the family
may be taken as boarders, roomers, or lodgers.
Article 3 contains, also, special pro visions as to the housing of work­
men by employers. Housing regulations of the above kind may also
be issued at once.
The Government sees, also, “ an especially effective means to induce
increased erection of workmen’s dwellings by private building
activity ” in a systematic procedure against insanitary and over­
crowded dwellings. The statement of motives for the bill says in
this respect:
Not only is such a procedure urgently required by social, hygienic,
and moral interests, but it is necessary in order to restrain unfair
private competition. Unscrupulous owners overcrowd their dwell­
ings beyond all reason, being aided in this by the desire of great



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277

masses of the population to economize above all else in rent. Owners
who will not permit overcrowding and who in consequence must
charge higher rents to their fewer tenants are at a disadvantage, and
private building activity is discouraged. Measures of the character
of those given above also prevent a further unsound increase in rents
and consequently in land values.
If housing regulations are issued, housing inspection becomes a
necessity. Article 4 of the bill regulates housing inspection, as
follows:
The supervision of housing matters shall, without prejudice to the
general legal power of the police authorities, be within the com­
petence of the communal magistracy. The latter shall keep itself
posted on current housing conditions, prevent and remove objection­
able conditions, promote the improvement of housing conditions
especially of people of small means, and supervise the enforcement
of the housing regulations.
In communes with more than 100,000 inhabitants there shall be
established a housing office ( Wohnungsamt) charged with the super­
vision of housing matters. It shall be provided with the required
properly trained personnel, especially with a sufficient number of
housing inspectors with the character of officials. Persons acting in
an honorary capacity may also be members of the housing office.
The supervisory authorities may for smaller communes order that
either a housing office corresponding to the above provisions be
established, or that special properly trained housing inspectors with
the character of officials be employed.
The activity of the housing office shall, upon order of the president
of a Government district, also include the keeping of a current list
of vacant small apartments for rent. By means of a police ordinance
it may be made obligatory for owners of such apartments to notify
the housing office when apartments become vacant.
The persons charged with the housing inspection are, in the exercise
of said inspection, authorized to enter all rooms permanently used for
housing purposes as well as their accessories, passages, and toilet
rooms. A t the beginning of the inspection they must notify the
owner of the dwelling or his representative of the purpose of their
visit and, without request, prove their authorization by showing
their official identification papers. The inspection must be made
in such a manner that the parties affected are not unnecessarily
disturbed. It may take place only between 9 a. m. and 6 p. m.,
and in the case of apartments in which lodgers are kept, only between
5 a. m. and 10 p. m. The owner of the dwelling or his representative
must give truthful information as to the mode of use of the rooms.
In so far as inspection makes it evident that an apartment does
not come up to the requirements to be made as to its nature and
use, an attempt shall first be made to obtain remedial action by means
of advice, instruction, or admonition. If this method fails, measures
shall be taken for the procedure of the police authorities.
Whenever necessary, special housing inspection officials shall be
assigned to the Government district presidents and in the case of
Berlin, to the superior president of the State police in order to super­
vise the activity of the communal and local police authorities. These



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B U L L E T IN OF T H E BUREAU OF LABOR STATISTICS.

officials shall in the exercise of their duties have the same authority
as the persons charged with the local housing inspection.
By these measures the Government hopes to promote the erection
and maintenance of low, flat buildings such as are far more common
in other countries than in Germany. It thus states the motives
prompting the bill:
The measures outlined above are specially designed to check land
speculation, because the high, prices of land resulting from specula­
tion hinder the erection of sanitary and roomy dwellings, and cause
the concentration of the population in overcrowded tenements. The
erection of low, roomy dwellings has in addition been hindered by
building regulations issued many years ago and still in force. These
regulations were intended particularly for large tenements and their
requirements as to solidity and fireproof quality are unduly onerous
for smaller dwellings. Moreover, many of these regulations were
issued for large districts and applied equally to buildings in large
and in small communes. They permit putting up dwellings of a
height and covering the area of the building lot to an extent wholly
unjustified by the conditions existing in small communes. At the
same time, the fact that this is permitted in small communes, even
though the permission may never be used, increases the difficulty of
forbidding it in large and crowded communes.
Hand in hand with the promotion of a sound building system goes
provision for a sufficient number of public squares and the creation of
special residence sections. The draft says in this respect:
Hereafter when changes of this sort are to be made, all communes
should be treated alike, regardless of wdiether they are large cities
or communes situated in industrial districts or not. This should
be done both because it is impossible to give a practicable legal
definition of what constitutes an industrial district, and because
experience has shown that objectionable housing conditions are not
restricted to highly developed industrial regions and large cities, but
exist also in medium-sized and small communes.
These are the essential provisions of the Prussian housing bill and
the most important points of the statement of the general motives
underlying it and of the special motives for the individual provisions.
The “ Soziale Praxis,” after approving the general principles of the
bill, says:
Whether the Government is in all measures of this bill proposing
the proper ways and means for a housing reform, requires thorough
examination, especially as to whether the provisions of the bill should
not have been given a more compulsory form by putting a “ shall”
in place of the “ m ay” used in so many instances. * * * The
fact that the realization of the intention of the Government will
meet strong opposition from powerful interests should not be con­
cealed and nobody knows so far what stand the Prussian Diet will




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279

take with respect to the bill.1 But even if the Government bill
should become a law, everything will depend on its administration,
which will be entirely in the hands of administrative officials, police
authorities, and communal corporations. May one put implicit con­
fidence in them that they will always and everywhere make use of
these new weapons in the fight against housing misery ? Sad ex­
periences in this respect leave room for doubt and concern. Be
that as it may, the public demands for a thorough reform must now
assert themselves with increased energy, and must point out that
in addition to the action of the Prussian Government there is also
necessary action on the part of the Empire to supplement the omis­
sions of the Prussian bill as well as of measures of other Federal
States taken up to date.
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Bremen, Verhandlungen zwischen dem Senat und der Biirgerschaft vom Jahre 1910.
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Industrie- und Handelshafen. Bremen, 1911. p. 253ff.
Germany. Reichstag. Stenographische Berichte uber die Verhandlungen des Reichs­
tags:
Die Wohnungsfiirsorge im Reiche und in den Bund esstaaten. Denkschrift, bearbeitet im Reichsamte des Innern. X I . Legislaturperiode, I. Session, erster
Sessionsabschnitt 1903-4. Vierter Anlageband. Drucksache No. 471. Berlin,
1904.
Ubersicht liber die Mietpreise und Wohn verhaltnisse in den mit Reichsunterstiitzung errichteten Genossenschaftswohnungen und den im freien Verkehr
hergestellten Mietwohnungen von Reichsbeamten. X I . Legislaturperiode, II.
Session, I I I . Anlageband, Aktenstiick No. 173. Berlin, 1906. p. 2534ff.
Ubersicht uber die Vervvendung des Fonds “ Zur Forderung der Herstelhmg
geeigneter Kleinwohnungen f iir Arbeiter und gering besoldete Beamte in den
Betrieben und Verwaltungen des Reichs” sowie uber die Verhaltnisse der
vom Reiche uncerstiitzten gemeinntitzigen Bauunternehmungen. X I I . Legis­
laturperiode. I. Session. Band 253, Aktenstiick No. 1177. Berlin, 1909.
p. 7341ff.
Germany. Reichsversicherungsamt. Amlliche Nachrichten des Reichsversicherungsamts, 30. Jahrgang, No. 3. March 15, 1914. Berlin.
Germany. Statistisches amt. A bteilung fu r Arbeiterstatistik. Wohnungsfiirsorge in
deutschen Stadten. Bearbeitet im Kaiserlichen Statistischen Amte, Abteilung fur
Arbeiterstatistik. Berlin, 1910.
Hamburg, Yerhandlungen zwischen Senat und Biirgerschaft im Jahre 1912. Mitteilungen der Biirgerschaft vom 8. Juli 1912, betreffend den vierten Bericht der Senatsund Burgerschaftskommission fur die Verbesserung der Wohnungsverhaltnisse.
Hamburg, 1913. p. 622ff.
i
The Prussian housing bill came up on January 17, 1913, in the lower branch of the Prussian Diet
for a first reading, after the present work had been finished. The discussion w as very short as each party
r
delegated only one of its members to represent it in the debate, and the bill was finally turned over to a
special committee of 21 members for further consideration. Nearly all parties declared themselves in accord
with the fundamental principles of the law. Opposition came only from the representatives of the con­
servative party, who expressed the wish that the provisions of the bill should not be applicable to the
open country, and that even in the cities too harsh measures should be avoided so that the middle classes
and landlords may not suffer heavy losses.




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B U L L E T IN OF TH E BUREAU OF LABOR STATISTICS.

Prussia. Haus der Abgeordneten. Sammlung der Drucksachen des Preussischen
Hanses der Abgeordneten:
Denkschrift betreffend die fur die Aibeiter der staatlichen Berg-, Hiitten- und
Salzwerke bestehenden Wohlfahrtseinricht ungen. XX. Legislaturperiode, II.
Session 1905-6, Drucksache No. 86. Berlin, 1906.
Nacbrichten von dem Betriebe der unter der preussischen Berg-, Hiitten- und
Salinenverwaltung stehenden Staatswerke wahrend des Etatsjahres 1910.
XXI. Legislaturperiode, V. Session 1912-13, Drucksache No. 48. Berlin, 1912.
Denkschrift iiber die Ausfiihrung der Gesetze betreffend die Bewilligung von
-Staatsmitteln zur Yerbesserung der Wohnungsverhaltnisse von Arbeitern, die
in staatlichen Betrieben beschaftigt sind und von gering besoldeten Staatsbeamten. XXI. Legislaturperiode, Y. Session, 1912-13. Drucksache No. 286.
Berlin, 1912.
Prussia. Preussische Zentralgenossenschaftskasse; Mitteilungen zur deutschen
Genossensehaftsstatistik fiir 1911. Berlin, 1913.
Saxony. Landtag . Mitteilungen iiber die Verhandlungen des ordentlichen Land­
tags im Konigreich Sachsen, 1911-12, Zweite Kammer, II. Band, 31. Sitzung:
Schlussberatung iiber den miindlichen Bericht der Finanzdeputation B. iiber
Tit. 35 des ausserordentlichen Staathaushalts-Etats fiir 1912-13, Gewahrung von
Baudarlehen aus Staatsmitteln an gemeinniitzige Bauvereine und Baugenossen­
schaften zur Verbesserung der Wohnungsverhaltnisse von Eisenbahnbediensteten betreffend. Dresden, 1912. pp. 1122ff.
Saxony. Land tags-Akten, 1909-10. Konigliche Dekrete. Dritter Band, Dresden:
Dekret No. 28 an die Stande, mehrere Eisenbahnangelegenheiten betreffend.
Kapitei 7. Die Gewahrung von staatlichen Baudarlehen an gemeinniitzige
Baugenossenschaften im Bereiche der Staatseisenbahnen betreffend.
YViirttemberg. Kammer der Abgeordneten. Verhandlungen der Wiirttembergischen
Zweiten Kammer. Beilagen-Band 104, Stuttgart, 1909:
Bericht der volkswirtschaftlichen Kommission iiber den Antrag Grober und Gen.
betreffend die Forderung des Baus von Kleinwohnungen. Beilage No. 317.
Entwurf eines Gesetzes betreffend Gewahrung von Darlehen an Beamtenbaugenossenschaften und Ubernahme von Burgschaft fiir Darlehen an solche. Beilage
No. 318.
PRIVATE PU B LICA TIO NS.

Centralstelle fiir Arbeiter-Wohlfahrtseinrichtungen:
Die Beschaffung hypothekarischer Darlehen fiir Baugenossenschaften. Berlin,
1908. Schriften No. 33.
Damaschke, Adolf: Uber kommunale Bodenpolitik. Yortrag. Verhandlungen des
VII. ordentlichen Stadtetages der Provinz Posen 1907.
Deutscher Verein fiir Wohnungsreform. Jahrbuch der Wohnungsreform. Herausgegeben vom Deutschen Verein fiir Wohnungsreform. Vols. 1 to 7. Gottingen,
1904-1913.
Deutscher Wohnungskongress. 1st, Frankfurt-am-Main, 1904. Bericht iiber den I.
Allgemeinen Deutschen Wohnungskongress in Frankfurt a. M., 16.-19. Oktober
1904. Gottingen, 1905.
Deutscher Wohnungskongress. 2d, Leipzig, 1911. Bericht iiber den zweiten
Deutschen Wohnungskongress, Leipzig 11.-14. Juni, 1911. Gottingen, 1912.
Eberstadt, Rudolf: Handbuch des Wohnungswesens und der Wohnungsfrage. Jena,
1910.
Neue Studien iiber Stadtebau und Wohnungswesen. Jena, 1912.
Feig, Dr. Johannes, und Mewes, Dr. Wilhelm: Unsere Wohnungsproduction und ihre
T
Pegelung. Herausgegeben vom Deutschen Verein fiir Wohnungsreform. Gottingen,
1911. (Die Wohnungsfrage und das Reich. Hft. 9.)




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281-

Fuchs, Carl Johannes: Zur Wohnungsfrage. Leipzig, 1904.
Handworterbuch der Staatswissenschaften. Hrsg. von Dr. J. Conrad, Dr. L. Elster,
Dr. W. Lexis, Dr. Edg. Loenig. 3. A ullage. Jena, 1909-1911. 3. Band: Bodenbesitzreform. 8. Band: Wohnungsfiirsorge.
International congress for sanitary dwellings. 2d, Geneva, 1906. Assainissement et
salubrite de Inhabitation. Compte-rendu des travaux du deuxieme Congres Inter­
national tenu a Geneve du 4 au 10 septembre 1906. Paris, 1907. 2 v.
International congress for sanitary dwellings. 3d, Dresden, 1911. Bericbt uber den
III. Intemationalen Kongress fur Wohnungshygiene in Dresden vom 2. bis 7.
Oktober 1911. Dresden [1912].
International housing congress. 9th, Vienna, 1910. Bericht uber den IX. Internationalen Wohnungskongress, Wien, 30. Mai bis 3. Juni 1910. Wien, 1911. 2 v.
International housing congress. 10th, The Hague, 1913. X m Congres International
e
des Habitations a Bon Marche. La Haye-Scheveningue, septembre 1913. Rapports.
Rotterdam [1913].
Kampffmeyer, Paul: Die Baugenossenschaften im Rahmen eines nationalen Wohnungsreformplans. Gottingen, 1900.
Pohle, Ludwig: Die Wohnungsfrage. Band I: Das Wohnungswesen in der modemen
Stadt. Band II: Die stadtische Wohnungs- und Bodenpolitik. Leipzig, 1910.
Siegert, Rudolf: Die Wohnungsfiirsorge im Grossherzogtum Hessen. Giessen, 1907.
Soziale Praxis und Archiv fur Volkswohlfahrt. Berlin, 1905-1913.
Stiibben, J.: Die Bedeutung der Bauordnungen und Bebauungsplane fur das Woh­
nungswesen. Gottingen, 1902.
Von Mangoldt, K.: Die stadtische Bodenfrage. Herausgegeben vom Deutschen
Verein fur Wohnungsreform. Gottingen, 1907. (Die Wohnungsfrage und das
Reich. Hft. 8.)
Wagner, Oberbtirgermeister: Die Thatigkeit der Stadt Ulm a. D. auf dem Gebiete der
Wohnungsfiirsorge fur Arbeiter und Bedienstete. Ulm, 1903.
Wygodzinski, Willy: Das Genossenschaftswesen in Deutschland. Leipzig und
Berlin, 1911.







GREAT BRITAIN AND IRELAND.
INTRODUCTION.

The existence in Great Britain of a housing problem, at once
serious and of long standing, is too well known to need discussion.
Abundant details of the almost incredible degree which overcrowding
and insanitary conditions reached during the last century may be
found in the Report of the Royal Commission on the Housing of the
Working Classes, issued in 1885. No equally comprehensive state­
ment of present conditions is to be had, but there is no lack of evi­
dence to show that the housing problem has not yet been solved.
The census returns of 1901 show 2,667,506 persons, or 8.2 per cent
of the population, living in 392,414 overcrowded dwellings, and of these
245,586 were in one-room dwellings.1 * * * In Glasgow, out of
163.258 dwellings there were 42,623 of only one room, 71,207 of two
rooms, and 9,971 of three rooms. * * * The overcrowded per­
sons in 1901 numbered in Birmingham. 53,936, Leeds 43,239, Liver­
pool 54,390, Manchester 34,147, and Sheffield 36,159, while the per­
centage of persons overcrowded in Northumberland was 31.51 and in
Durham 29.56.2
In 1903 the housing reformers declared there was an actual house
famine of varying but undoubted intensity all over the country,
affecting all grades of workers.
Putting the case in its simplest form, we find in the first place that
if every room, good and bad, occupied or unoccupied, in all the work­
men’s dwellings in the country, be reckoned as existing accommoda­
tion, there are not enough of any sort to house the working popula­
tion without unhealthy overcrowding; and if only healthy rooms are
reckoned, the position is infinitely worse. In the second place, we
find that 30 far from new rooms being built in sufficient quantities to
make up the deficiency, there is a distinct lessening of the rate of
increase, and (so far as healthy dwellings are concerned) no prospect
of relieving the intensity of the “ famine” to any appreciable extent .3
In 1913 the Local Government Board, discussing the working of a
system of inspection recently established, declared that it has had
good results “ not only in the improvement of existing houses, but
1 For census purposes a dwelling is considered overcrowded if it houses more than 2 adults per room, 2
children under 12 being considered equivalent to 1 adult. A one-room dwelling, therefore, is not classed
as overcrowded unless it is occupied by the equivalent of at least 3 adults.
2Housing U p to Date, W . Thompson, p. 2. London, 1907.
3 Housing Handbook, W . Thompson, p. 1. London, 1903.




283

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B U L L E T IN

OF T H E BUREAU OF LABOR STATISTICS.

also in bringing to light a necessity— hitherto largely unrecognized—
for the provision of additional accommodation.” 1
The housing problem is not confined to the cities, but is found in
an exaggerated form in many of the rural districts. Here, as in the
cities, in many cases the supply of houses is not proportioned to the
population, many are in bad condition, and overcrowding is frequent.
In 1897 the Land Law Reform Association made an inquiry into the
condition of the cottages in nearly 400 villages, chosen from all parts
of the country. In half the villages the general condition of the
cottages was found to be “ unsatisfactory” or “ very b ad” ; and in
over a quarter there were not enough houses for the people.2 In the
midst o f the abundant air and space of the country the effect upon
health of overcrowding is not apt to be so bad as in the cities, but
the moral effects of crowding men, women, and children into cottages
so small that the ordinary decencies of life become impossible are
serious enough.
In Great Britain it has long been recognized that in the public
interest the housing problem must be dealt with in a systematic way,
and for more than half a century three separate agencies— the general
Government, municipal or other local authorities, and organized pri­
vate enterprise—have tried, with varying degrees of earnestness
and of intermittency, to improve housing conditions. Of these three,
private effort was first in the field, the Metropolitan Association for
Improving the Dwellings of the Industrial Classes having been
incorporated in 1845. The work of private associations, however,
depends largely upon conditions imposed or privileges granted by
both the general Government and the local authorities, and its scope
is necessarily smaller than that of the other two agencies. The gov­
ernmental activities will, therefore, be considered first. The activi­
ties of the general Government have been of three kinds, legislative,
supervisory, and financial, the legislative coming earliest.
LEGISLATION IN AID OF HOUSING.

The first legislative action against the evils of the housing situation
was taken in 1851, when Lord Shaftesbury introduced a bill known
as the Laboring Classes’ Lodging Houses Act, which was passed in the
same year. This act provided that local authorities might use for
housing purposes any land they already possessed, or might buy or
rent other land for that purpose. On such land they might “ erect
any buildings suitable for lodging houses3 for the laboring classes,
and convert any buildings into lodging houses for the laboring classes,
and may from time to time alter, enlarge, repair, and improve the
142d Annual Report of the Local Government Board, 1912-13, P t. II, Housing and Tow n Planning,
p. vi.
2 Housing Handbook, W . Thompson, p . 2. London, 1903.
3 The term “ lodging houses” in this act was used in the sense of dwellings, rather than of what are usually
known in this country as lodging houses. In the act of 1885 it was specifically stated that the term included
separate cottages, as well as buildings occupied by several families.




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same respectively, and fit up, furnish, and supply the same, respec­
tively, with all requisite furniture, fittings, and conveniences.”
Money needed for these purposes might be borrowed either from
the Public Works Loan Fund or elsewhere, and if after seven years’
trial the experiment was found too costly, the property might be
sold.
This act, which permitted a really constructive line of action, was
so far in advance of public sentiment that it remained practically a
dead letter. During the next 35 years two series of acts were passed
dealing with the housing situation along two main lines. The first
series, known as the Torrens Acts, gave local authorities power to
proceed against separate buildings which were overcrowded, insani­
tary, or obstructive, while the second series, the Cross Acts, conferred
powers for dealing with large insanitary areas or slums. Both these
series of acts tended toward a destructive policy, the abolition of bad
conditions, but were lacking on the constructive side. Under the
Torrens Acts no provision was made for replacing houses which were
closed or demolished, or for accommodating those who might be
forced out of an overcrowded house, while under the Cross Acts the
authorities were at most obliged to provide for rehousing the number
of people dispossessed, and under some circumstances need provide
only for a much smaller number.
In 1884 a royal commission was appointed to inquire into the
housing situation. As a result of its report and recommendations
issued in 1885 the Housing of the Working Classes7 Act of 1885 was
passed, which was mainly a bringing together and harmonizing of the
powers conferred upon local authorities. Five years later the Housing
of the Working Classes7Act of 1890 was passed, which brought together
w^ith the necessary amendments, additions, and eliminations, the
whole mass of housing legislation. Some amendments and additions
have been made to this, and in 1909 another act was passed, the
Housing and Town Planning Act, which is still the latest of the
housing acts. In 1911 and 1912 private bills dealing with the housing
situation were introduced, but failed of passage.1
i On Aug. 10,1914, two housing bills were passed. The first related solely to providing housing accom­
modation for persons employed b y the Government pn Government works in places where such accommo­
dation is insufficient or wholly lacking. Under such circumstances, the Local Government Board m ay,
with the approval of the treasury, arrange with any authorized housing society to supply the deficiency,
and to that end m ay assist the society b y purchasing its shares, loaning it money, or otherwise aiding it.
A s an alternative, the commissioners of works m ay themselves buy, build, or do whatever else appears to
them necessary to meet the situation. In this case they must have the consent of the treasury, which m ay
be given only after consultation with the Local Government Board. Two million pounds was appropriated
for the purposes of this act.
The second, known as the Housing (No. 2) Act, 1914, is an emergency measure limited to one year’s dura­
tion. During that time the board of agriculture and fisheries in agricultural districts, and elsewhere the
Local Government Board, are empowered to acquire land and building for housing purposes and to make
any arrangements which seem to them necessary or desirable in connection with such acquisitions. It is
expressly provided, however, that they m ay not themselves undertake building operations unless a public
local inquiry has shown that a lack of suitable housing accommodation exists in that particular place
and that there is no other means of supplying the need. Except in such a situation they must work, as far
as building is concerned, through local authorities or recognized societies. A sum of £4,000,000 ($19,466,000)
was appropriated for the purposes of this act.




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B U L L E T IN OF T H E BU REAU OF LABOR STATISTICS.

The act of 1909 consists of four parts. Part I is the Housing of the
Working Classes’ Act of 1890 transferred bodily, but somewhat
amended. Part II relates to tow^n planning and confers large powers
upon local authorities in planning for the development of new areas.
Part III deals with the appointment of county medical officers and
of county public health and housing committees and with the forma­
tion and extension of building societies. Part IV contains supple­
mental provisions with regard to commons and open spaces, land in
the neighborhood of royal palaces or parks, repeal of previous enact­
ments, etc. Part I is the important section of the act so far as
concerns the direct attack upon the evils of the present housing situa­
tion, while Part II is intended to prevent the future development of
similar evils in rapidly growing districts.
Any attack upon the ills of an undesirable housing situation
involves the abolition of bad conditions and the substitution of good.
Since a housing problem usually involves overcrowded and insanitary
areas as w
rell as overcrowded and insanitary houses, an attack upon
it requires the power to clear off slum areas and to alter or demolish
existing houses, as well as to put up new and healthful houses in
properly laid out areas. The housing acts sanction all three lines
of activity, but the powers needed for the first two are confined solely
to the public authorities, while public authorities, companies, asso­
ciations, and private individuals are alike encouraged to carry on
the third. The provisions of the housing acts, therefore, naturally
fall into two distinct groups, the first dealing with powers and privi­
leges bestowed upon the local authorities and the second relating to
inducements offered organized or unorganized private enterprise to
undertake the provision of suitable dwellings for the laboring classes.
The act of 1890 1 consists of seven parts, of which the first three
are the really operative parts. Part I confers on local authorities
the power to deal with large unhealthy areas or slums, which can be
made the subject of an improvement scheme; that is, the whole
area may be bought up, the existing buildings razed, the land laid
out afresh, and either built over or kept for open spaces.
Part II empowers local authorities to deal with small insanitary
areas which do not require such sweeping measures, with houses
unfit for human habitation, which may be closed until made fit or,
if necessary, may be demolished, and with obstructive buildings—
i. e., buildings causing other houses to be unhealthful, which may be
demolished.
Part III deals with the provision of dwelling houses and lodging
houses for the working classes in districts where they may be re­
iAlthough this was made part of the Housing and Tow n Planning A ct of 1909 it is so generally referred
to in English discussions of the housing situation as the act of 1890 that it seems necessary to speak of it
b y that name only.




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quired. This part contains provisions intended to encourage asso­
ciations, corporations, and private persons, as well as local authori­
ties, to undertake such action.
Part I naturally applies only to cities and towns. The authorities
empowered to take action under it are the London County Council
and all urban district councils or town councils. Action should be
initiated by the local medical officer of health, but if he should fail
to take cognizance of an unhealthy area, any two justices of the
peace or any 12 or more rate payers of the district may call upon
him to inspect the area and make an official report on it in writing.
If he fails to inspect, or if he reports that the area is healthy, an
appeal may be made to the Local Government Board, who will ap­
point a legally qualified medical practitioner to inspect the area; his
report is final. An area may be declared unhealthy if it contains
houses, courts, or alleys unfit for human habitation, or if the nar­
rowness, closeness, and bad arrangement, or the bad condition of
the streets and houses, or groups of houses, or the want of air, light,
ventilation, or any other sanitary defects are dangerous or injurious
to the health of the inhabitants of the buildings in such area or of
the neighboring buildings.
When an area has been officially pronounced unhealthful the local
authorities may make a scheme for its improvement, if in their opin­
ion this is the most satisfactory method of dealing with the evils
existing in the area. Whatever the scheme it must provide for the
demolition of the old houses and the erection of new dwellings of
suitable accommodations for the persons displaced.1 It need not
be confined to the exact limits of the unhealthy area, but may
include lands which the local authority considers necessary to the
efficiency of the scheme. If the local authority fails to make a
scheme, the Local Government Board may make and enforce one.
When made, a scheme must be advertised, public hearings are held,
and a full opportunity allowed for those opposed to present their
arguments. If no sufficient reason against it is presented, the Local
Government Board makes an order authorizing the scheme, and the
local authority is then to carry it out.
After the scheme has been approved the local authorities may pull
down the existing buildings, clear out the area, widen existing streets
or make new ones, and provide for rebuilding all of the area, or such
part as they consider necessary.
Careful provision is made as to the compensation due owners of
land thus taken. The most important points are:
1 In London accommodation m ust be provided for all or for not less than half of the persons displaced,
according to the decision of the home secretary, unless it can be shown that the required accommoda­
tions already exist within the immediate vicinity or are to be provided otherwise. Outside of London,
such accommodation must be provided as the Local Government Board considers-necessary.




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B U L L E T IN

OF TH E BUREAU OF LABOR STATISTICS.

1. That compensation shall be based upon the fair market value,
without any additional allowance on account of compulsory purchase.
2. In estimating this value due regard must be given to the nature
and condition of the property and the probable duration of the build­
ings in their existing state.
3. Deductions are to be made from any enhanced value due to
overcrowding or to the use of the property for illegal purposes.
Deductions* are also to be made for the bad state of repair in which
the premises are found, and in case the property is not capable of
being made fit for habitation at any reasonable cost.
Money may be raised for these purposes by ordinary loans or may
be borrowed from the Public Works Loan Fund.
Part II of the act deals in the main with the treatment of single
insanitary buildings and applies to both urban and rural districts.
As amended by the act of 1909, this part provides for the regular
inspection of every sanitary district in order to discover if there are
any houses unfit for habitation, for the closing by the local authori­
ties of any such houses, and for their demolition if within three
months after the issuance of a closing order they have not been
put into- satisfactory condition. The local authorities are also em­
powered to see that all buildings which are let for less than a certain
specified rental are kept in all respects reasonably fit for habitation,
to remove obstructive buildings— i. e., buildings which by their sit­
uation or manner of construction render other buildings unhealthful,
and to reconstruct small unhealthy areas.
Special regulations concerning cellar dwellings are made in this act.
A cellar room used habitually as a sleeping place is regarded as a
dwelling house unfit for human habitation if—
1. The surface of the floor is more than 3 feet below the surface
of the part of the street adjoining or nearest to the room.
2. If the room is either not on an average at least 7 feet in height
from floor to ceiling or does not comply with regulations prescribed
by the Local Government Board designed to secure proper ventila­
tion, light, etc.
The reconstruction of small, unhealthy areas involves two classes
of schemes. The first case is where an order for the demolition of a
building or buildings has been made and the local authorities desire
to acquire the area either to make a highway or open space, to devote
it to the erection of workmen’s dwellings, or to exchange it for land
more suitable for such dwellings. The second case is where an area
is too small to be dealt with under Part I, but nevertheless on account
of a bad arrangement of streets and houses needs reconstruction.
In both cases the authorities are given the right, under proper safe­
guards, of acquiring the property either by voluntary agreement or




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289

by compulsory purchase, as may be necessary. Money may be
raised for any of these purposes as under Part I.
Parts I and II permit the local authorities to take action when
existing dwellings are insanitary or dangerous— i. e., to substitute
healthful for unhealthful housing accommodations. Part III permits
them to take constructive, not merely palliative or reparative action.
This is the most important part of the act, because it enables
local authorities to carry out a scheme to build houses for the work­
ing classes. There is no provision limiting the power of the local
authority; no certificate or other formal proof of deficient house
accommodation is requisite; no insanitary property need be closed
or demolished. The local authority can decide to build at any time
and for any reason which may seem good to it, provided, as in all
other municipal work, that the Local Government Board will sanction
any necessary loans.1
Under this part of the act the local authorities are authorized—1. To acquire land either inside or outside of their district, by
voluntary agreement of the owner, or by compulsory purchase if that
is necessary. It is especially provided that no lease, settlement,
entail, or other private arrangement, can debar local authorities from
acquiring land they wish for these purposes. They must pay for it
the fair market value with an allowance (usually 10 per cent) for
compulsory purchase.
2. To erect and maintain on lands thus acquired dwelling houses,
cottages (with which, if they choose, they may furnish gardens not
exceeding an acre in extent), and lodging houses. With the con­
sent of the Local Government Board they may either alone, or
jointly with any other person, provide and maintain buildings for
shops, recreation grounds, and other lands or buildings which will
serve a beneficial purpose in connection with the dwellings. They
may also lay out and construct streets and roads on the land they
have acquired, or contribute to such action by other persons.
3. To fit up, furnish, and let the houses they put up. If they do
not wish to undertake these responsibilities they are empowered under
certain restrictions to lease the land they have acquired to companies
or builders or individuals for the erection thereon of workmen’s
dwellings.
4. To purchase or lease houses for the working classes already erected
or about to be erected. Trustees of lodging houses built by private
subscription may sell or lease them to the local authorities or may
simply transfer their management to the latter, while still retaining
their title.
5. To borrow money under conditions varying according to the
authority concerned, to meet the expenses incurred under Part III.
i Municipal Year Book for 1912, p. 749, London, 1912.
6 6 1 7 1 ° — B u ll. 1 5 8 — 1 5 ---------19




290

B U L L E T IN

OF T H E BLTREAU OF LABOR STATISTICS.

The London County Council may, with the assent of the treasury,
create consolidated stock and provide for repayment within 80 years.
The London borough council may, if the county council approves,
borrow from the county council or from from the Public Works Loan
Commissioners.
Urban district councils and town councils may either borrow from
the Public Works Loan Commissioners, or issue stock, or borrow on
the security of the rates, subject to these conditions:
1. The consent of the Local Government Board must first be
obtained.
2. The period of the repayment of the loan must not exceed 80
years.
In addition to thus authorizing direct action by the local authori­
ties, the act empowers the Public Works Loan Commissioners to lend
money to be used for erecting working-class dwellings to public
utility companies,1 private persons who either own land in fee simple
or have a lease or other claim upon it of which 50 years are still to
run, and to societies or other organizations formed for the purpose
of constructing or improving dwellings for the working classes.
Loans of this class may be secured by mortgages on land or dwellings
or both; where no other security is given the loan may not exceed
two-thirds of the value of the property mortgaged in the case of
public utility companies and one-half in other cases. The period for
repayment may not exceed 40 years.
It will be noticed that Part I of this act is merely an amplification
of the powers given under the Cross Acts, and Part II of those con­
ferred by the Torrens Acts, while Part III goes back to the principles
of 1851. The legislative activity of the General Government m aybe
summed up by saying that the local authorities have been empowered
to clear off insanitary areas and buildings, to rebuild where necessary,
or to use the cleared space for other purposes, and to undertake the
duties of builder and landlord whenever they consider that circum­
stances render this desirable.
A number of minor acts have been passed bearing more or less
directly upon the housing situation. Only one of these need be men­
tioned here— the Small Dwellings Acquisition Act of 1899. By the
terms of this act the local authorities are empowered to advance
money to a resident of any house, the market value of which does
not exceed £400 ($1,946.60), in order to enable him to acquire the
ownership of the same. The amount of the advance must not exceed
either four-fifths of the market value or £240 ($1,167.96)— in case of
a fee simpleor of a leasehold of not less than 99 years, £300 ($1,459.95).
i The act specifically mentions railway companies and dock and harbor companies, but also includes
any other company established “ for trading or manufacturing purposes in the course of whose business,
or in the discharge of whose duties, persons of the working classes are employed. ” Act of 1909, sec. 67.




G O V E R N M E N T AID TO H O U SIN G ---- GREAT B R IT A IN .

291

Such loans must be repaid within 30 years. Careful provision is
made not only for securing payment of interest and repayment of
loan, but also for making sure that the house is used as a dwelling, is
kept in good sanitary condition and good repair, and is not used in
any such manner as to be a nuisance to adjacent houses.
SUPERVISORY POWERS OF LOCAL GOVERNMENT BOARD.
The supervisory activities of the General Government for the bet­
terment of housing conditions were very materially increased by the
act of 1909, which gave the Local Government Board the right to
enforce regular inspections and reports upon housing conditions.
The particular section giving this power was contained in an amend­
ment of the procedure for closing orders:
17.
(1) It shall be the duty of every local authority within the
meaning of Part II of the principal act to cause to be made from time
to time inspection of their district, with a view to ascertain whether
any dwelling house therein is in a state so dangerous or injurious to
health as to be unfit for human habitation, and for that purpose it
shall be the duty of the local authority and of every officer of the local
authority to comply with such regulations and to keep such records
as may be prescribed by the board.
Up to 1909, although many of the more progressive local authori­
ties had instituted systems of inspection and had tried to acquire full
knowledge of conditions within their districts, there had been no
means of stimulating the less progressive to similar action, and no
central bureau where the information thus acquired could be sys­
tematized and made the basis of any comprehensive plan of action.
In 1910 the Local Government Board issued a series of regulations
for such inspections, calling attention to the fact that they were not
optional, prescribing various items which must be included in the
reports and requiring copies of all reports to be sent to the board.
Every medical officer of health was required to include in his annual
report information and particulars in tabular form in regard to:
The number of dwelling houses inspected under and for the pur­
poses of section 17 of the act of 1909.
The number of dwelling houses which on inspection were consid­
ered to be in a state so dangerous or injurious to health as to be unfit
for human habitation.
The number of representations made to the local authority with a
view to the making of closing orders.
The number of dosing orders made;
The number of dwelling houses the defects in which were reme­
died without the making of closing orders;
The number of dwelling houses which, after the making of closing
orders, were put into a fit state for human habitation; and
The general character of the defects found to exist.1
1 Forty-second Annual Report of the Local Government Board, 1912-13, Pt. II, Housing and Town
Planning, p. vii.




292

B U L L E T IN

OF T H E BUREAU OF LABOR STATISTICS.

The first yearly reports under this system were received for 1911,
and, though, much valuable information was secured, the board found
it necessary to call for a number of supplementary reports, as some
of those received were perfunctory and superficial. In 1912 their
memorandum of instructions for the preparation of such reports
called for a wider scope in the work:
The report as to housing should comprise information as to the
character and sufficiency, or otherwise of houses for the working
classes in the district, and the condition and fitness for habitation of
such houses, together with particulars as to any cases of overcrowd­
ing which have come under notice during the year, and the action
taken in such cases.
Particulars should be added as to the number of new houses
erected or in course of erection; growth of working-class dwellings in
relation to the growth of the population of the district; supervision
over the construction of new houses in relation to by-laws.
The board attach much importance to exact detail under this
heading, and in the absence of sufficient information a supplementary
report is often required.1
This system has been in force too short a time to show what its
full effect will be,2 but the Local Government Board claims that it
has already shown the existence of an amount of overcrowding and
insanitary conditions hitherto unsuspected; that local authorities
have been materially helped by the comprehensive information thus
for the first time rendered available; and that in the occasional
instances where the local authorities are deliberately careless or negli­
gent, the board promptly becomes cognizant of the situation and is
able to bring pressure to bear upon them.
FINANCIAL AID TO HOUSING BY THE GENERAL GOVERNMENT.

In the way of financial aid to the housing movement the General
Government has made loans to both urban and rural local authorities,
to philanthrophic and semiphilanthropic organizations, to building
associations of every sort, and to private persons. Under the first of
the Cross Acts in 1875 the Public Works Loan Commissioners were
authorized to make loans to local authorities for the purposes of the
act. The rate of interest must not be less than 3| per cent and the
maximum period of repayment w
^as 50 years. Four years later a
treasury minute fixed the following rates of interest for such loans:
3J per cent when the period of repayment did not exceed 20 years,
3f per cent when the period did not exceed 30 years, 4 per cent if it
did not exceed 40 years, and 4J per cent if it did not exceed 50 years
Not more than £100,000 ($486,650) might be loaned for any one
project.
1 Forty-second Annual Report of the Local Government Board, 1912-13, Pt. II, Housing and Town
Planning, p. viii.
2 For details as to the increased amount of action taken against insanitary dwellings since this system
was established, see pp. 300 to 303.




G O V E R N M E N T AID TO H O U SIN G ---- GREAT B R IT A IN .

293

Relatively little use was made of this privilege. The interest was
high, and local authorities in all the larger cities could obtain equally
good or better terms elsewhere. In the 15 years from 1876 to 1890,
inclusive, loans to the amount of £2,347,353 ($11,423,393) were
sanctioned by the Local Government Board, but data are llot avail­
able to show what portion of this sum was obtained from the Public
Works Loan Fund.
The act of 1890 made public loans available for a much wider
range of housing activities than the earlier act, specifically offering
them to associations, corporations, and private persons, as well as to
local authorities, but the terms were still considered unduly onerous.
Even when obtained from other than public sources, housing loans
must be repaid within 50 years, and it was claimed that in order to
meet the interest and provide for repayment within this period rents
must be charged out of proportion to the earnings of the workers.
In 1903, in response to such complaints, the period of repayment
for loans obtained elsewhere than from the Public Works Loan Fund
was extended to 80 years, and in 1909 this latter class of loans was
also included in this provision. At present it is quite common for
such loans to be for 60 years when made on buildings and for 80
years on land, with 3J per cent as the minimum rate of interest.
The total amount of the loans made by the Public Works Loan
Board under these various acts was as follow s:1
Loans for housing 'purposes in England and Wales from Public, Works Loan Fund up to
Mar. 31, 1913.
To local authorities....................................................................... $12, 368,219. 48
To societies, corporations, and private persons..................
12, 072, 302. 22
Under small dwellings acquisition act..................................
1, 007, 973. 81
Total......................................................................................

25, 448, 495. 51

Although such loans were open to local authorities earlier than to
associations and private persons, the amount loaned to the latter is
very little less than that loaned to the former. This seems largely
due to the fact that the authorities, borrowing on the security of the
rates, can easily get money elsewhere, often on better terms than the
Government offers, while the associations and private persons who
must borrow on the property itself, have considerable difficulty in
getting the money they need. Even when both parties borrow from
the Government, this disparity in their position persists to some
extent, and the local authorities are apt to get better terms. Thus
the amount loaned under the housing acts in the year ending March
31, 1913, were for the following periods and at the following rates of
interest.
1 Thirty-eighth Annual Report of the Public Works Loan Board, 1912-13, pp. 40,76,92.




294

B U L L E T IN

OF T H E BU REAU OF LABOR STATISTICS.

L O A N S U N D E R T H E H O U S IN G AC TS TO L O C A L A U T H O R IT I E S A N D TO A S S O C IA T IO N S ,
E T C ., D U R IN G Y E A R E N D I N G M A R . 31, 1913.
[Source: Thirty-eighth Annual Report of the Public W orks Loan Board, 1912-13, pp. 9 and 10.]

N ot over
20 years.

Loans to associations, etc..........

Over 30
but not
over 40
years.

Over 20
but not
over 30
years.

$36,995.13 $15,660.40
24,128.11 599,669.60

Over 50 but
not over 80
years.

Interest 3|
per cent.

Interest 3f
per cent.

$1,462,392.98 $1,515,048.51
228,253. 45
623,797.70 $228,253.45

Almost the total amount of the loans to local authorities (96.5 per
cent) was for the 80-year period against 26.8 per cent of the loan to
associations, etc., while for the portion of these latter loans which had
80 years to run a higher rate of interest was charged than in the case
of the local authorities.
On the 31st of March, 1913, the outstanding loans of the Public
Works Loan Board for housing purposes were as follows:
L O A N S O F T H E P U B L IC W O R K S L O A N B O A R D F O R H O U S IN G P U R P O S E S O U T S T A N D ­
IN G M A R . 31, 1913.
[Source: Thirty-eighth Annual Report of the Public W orks Loan Board, 1912-13, pp. 96 and 97.1

Rate of interest (per cent).

2f
.....................................................................
3 ................................................................................................

..............................................
3J ...................................................
3|
.....................................................................................
....................................................

Loans to local
authorities.

Loans under
small dwellings
acquisition act.

$38,917. 83
149,982. 61

31

90,321.59

3§
.......................................................................................
4 .............................................................................................
4i

....................................................

3,211,907.01
277,335.53
21,956.57
1,664.34

Total.............................................................................

3,792,085. 48

u

Loans to associa­
tions, etc.,

$1,557.28
450,629. 89
38,202.03
3,811,683.39
458,077.74
178,700.25
4,938,850.58

$38,612.33
532,099.28
10,424.81

581,136. 42

To summarize: The Government has aided in securing housing
for the working classes by a series of enactments making it con­
tinuously more possible for local authorities to act effectively and
offering inducements for nonofficial agencies to enter the field more
numerously; by establishing a centralized system of supervision,
inspection, and information, through which it is able to stimulate
materially the action of the local authorities where such stimulus is
needed; and by advancing money in the way of loans for housing
purposes to the amount of over $25,000,000.
HOUSING W ORK OF LOCAL AUTHORITIES.

The housing work done by local authorities has proceeded along
three lines: (1) The abolition of large slum districts, which involves
clearing off the structures upon an area, laying out the space properly
and rebuilding it with working-class dwellings, keeping such parts of
it as may be desirable for open spaces, playgrounds, and the like.




GOVERNMENT AID TO HOUSING---- GREAT BRITAIN.

295

(2) The treatment of small slum areas, which may involve clearing off
a small space much in the manner large areas are dealt with, but far
more commonly means proceeding against single houses, seeing that
they are in sanitary condition, closing them if they are not, and
demolishing them if the owner fails to put them into good condition.
(3) Providing new housing accommodations where needed. This
differs from the housing work done in connection with clearing slum
areas in that the houses built are in addition to existing accommoda­
tion, not merely substitutes for dwellings that have been tom down.
CLEARANCE SCHEMES FOR LARGE SLUM AREAS.

Up to the passing of the act of 1890, the first line of action was the
one mainly followed,1 and more such work was done in London than
anywhere else. Twenty-two schemes, as they were called, were
undertaken by the Metropolitan Board of Works; 16 of these were
carried to completion by the board, while the remaining 6 were
handed over unfinished to the London County Council, which in 1889
took the place of the Metropolitan Board. There was a marked
difference in the policy of these two bodies. The board sold the
areas, after clearing, to organizations or individuals who would put
up workingmen's dwellings, while the county council retained the
sites and put up the dwellings themselves. The following table
gives the leading data concerning these two groups of schemes:
PARTICULARS OF SCHEMES U N D E R T A K E N A N D COMPLETED B Y TH E M ETRO PO LI­
TAN BO ARD &F W O R K S U N D ER T H E ARTISANS D W ELLIN G S ACTS, 1875 TO 1882.
[Source: Housing of the Working Classes in London, 1855-1912, London, 1913, p. 146.]
Num­
ber of Num­
persons ber of Num­
ber of Size of
of the persons persons area in
Net cost of
Name and date of scheme. work­
re­
I>roacres.
scheme.
quired
ing
classes to be re­ for.
dis­
housed.
About—
placed.
$738,554.64

1. Whitechapel and Limehouse, 1876.

3,669

3,669

3,666

5.14

2. Goulston Street and
Flower-and-Dean Street,
Whitechapel, 1877.

4,004

3,293

3,972

7.21 1,360,142.95

3. St. George-the-Martyr,
Southwark, 1877.

1,266

926

2,002

2.09

255,213.86

867

817

724

1.02

367,474.28

1,913

1,939

1,616

1.65

514,145.73

.82

101,563.86

4. Bedfordbury, St. Mar­
tin-in-th e-F ields and
Strand, 1877.
5. Great W ild Street, St.
Giles-in-the-Fields, 1877.
6. Pear Tree Court, Clerkenwell, 1877.
7. Whitecross Street, St.
. Luke, 1877.

410

410

596

3,687

3,631

3,930

7.11 1,532,670.11

Remarks.

Dwelling sites sold to Pea­
body trustees and Messrs.
Rothschild and others.
Dwellings sites sold to East
End Dwellings Co. and
Messrs. Rothschild and
others.
Dwellings sites sold to Im­
proved Industrial Dwell­
ings Co. and others.
Dwellings sites sold to Pea­
body trustees.
Do.
Do.
Dwellings sites sold to Pea­
body trustees and Coster­
mongers’ Committee. The
ground sold to the latter
was
afterwards
repur­
chased.

i Much work has always been done in the way of keeping individual buildings up to the standard, but
to a very large extent this work was hampered in the past by the actual lack of housing accommodations.
The sanitary authorities would hesitate about closing a dwelling, however unhealthful, if there was no
other place open to the tenants.




296

B U LLETIN OF TH E BUREAU OF LABOR STATISTICS.

PAR TICU LAR S OF SCHEMES U N D E R T A K E N AN D COMPLETED B Y T H E M ETR O PO LI­
T A N B O A R D OF W O R K S U N D E R T H E AR T ISAN S D W E L L IN G S ACTS, 1875 TO 1882—Con.
Num­
ber of Num­
persons ber of Num­
ber of Size of
of the persons persons area in , Net cost of
Name and date of scheme. work­
re­
acres,
j)roscheme.
quired
ing
classes to be re­
for.
dis­ housed.
About—
placed.
798

1.02

$185,837.04

1,356

1,722

2.46

242,818.88

750

1,596

1.79

177,189.27

1,796

3,135

3,422

5.03

476,425.48

645

858

900

1.44

65,634.49

1,029

1,030

2,304

3.48

312,035.11

179

180

416

.34

1,036.56

459

400

.54

47,589.50

220

288

.59

40,046.43

8. High Street, Islington,
1877.

547

515

9. Old Pye Street, West­
minster, 1877.
10. Bowman's Buildings,
Marylebone, 1878.

1,375
806

11. Essex Road, Islington,
1878.
12. Little Coram Street,
St. Giles, and St. Pancras, 1879.
13. Wells Street, Poplar,
1879.
14. Great Peter Street,
Westminster, 1879.
15. Windmill Row, New
Cut, Lambeth, 1883.
16. Tabard Street, New­
ington, 1884.

,459
220

Total......................... . 22,872

23,188

28,352

Remarks.

Dwellings sites sold to I m .
proved. Industrial Dwell
ings Co.
Dwellings sites sold to Pea­
body trustees.
Dwellings sites sold to I i i k
proved Industrial Dwell­
ings Co. and others.
Dwellings sites sold to Pea
body trustees and others.
Carried out by Peabody trus­
tees, except as to street
improvements.
Dwellings sites sold to Mr.
Hartnoll.
Carried out by Peabody
trustees, except as to street
improvements.
Dwellings sites sold to Mr
Hartnoll.
Dwellings sites sold to Mr.
Goodwin.

41.73 6,418,378.19

PARTICULARS OF SCHEMES U N D E R T A K E N B Y TH E M ETR O PO LITAN BOARD OF
W O R K S AND COMPLETED B Y TH E GOUNCIL U N D ER THE AR TISAN S D W ELLINGS
AN D THE HOUSING OF TH E W O R K IN G CLASSES ACTS, 1875 TO 1890.
[Source: Housing of the Working Classes in London, 1855-1912, London, 1913, p. 147.]

Name and date of scheme.

Number Number
Number of persons of persons
of persons required provided
displaced. to be re­
for.
housed.

Tench Street, St. George-in-the
*1,284
1,284
East, 1 8 8 3 .............. .............
562
281
Brook Street. Limehouse, 1883..
Trafalgar Koad, Greenwich,
1 8 8 3 ............................................
378
190
/
Hughes Fields, Deptford, 1884..
1,786
893 1
485
Cable Street, Shadwell, 1886___
970
Shelton Street, St. Giles, 1886...
1,208
608
T otal....................................

6,188

3,741

(2)
308
306
666
3 240 }•
798
629
2,947

Size of
area in
acres.

Housing Cost of
value Of buildings,
Net
sites re­ including
cost of
tained for incident­
scheme.
rehousals.1
ing.i

2.73
1.29

$253,014
96,391

.91
6.96
1.98
1.64

86,020
379,125
200,670
331,939

15.51 1,347,159

$8,760

$74,526

4,867
59,853
* 18,103
*"174>007
182,941
17,811
s 43,069 • &206,593
92,610

697,920

1 The interest and sinking-fund charges on these amounts are met out of the rents.
2 The Metropolitan Improvements Act. 1889, remitted the rehousing obligation and allowed the land to
be used as an open space. The number is, therefore, not included in the total.
» Provided by Provident Association.
4 These figures relate only to the dwellings erected by the council.
6 Including Parker Street lodging house.

The net cost of the 16 schemes was approximately £57 ($277.39)
for every person displaced. A considerable part of this cost was due
to the provision that the cleared space must be used for housing pur­
poses only. The difference between the price which land in the
heart of London would bring if sold for business purposes and what
it would bring as a site for working class dwellings constituted a
heavy loss. Moreover, some portions of the areas cleared were so
unsuitable for housing purposes that they could not be sold at any



G O V E R N M E N T AID TO H O U SIN G -----GREAT B R IT A IN .

297

price, even to the philanthropic societies, who put up dwellings at
low rents on the other areas they obtained from the board.
The council, by building on the cleared spaces, saved some part of
the loss incurred by the board, but the necessity of “ writing dow n”
the value of the areas cleared still made the schemes unduly costly.
It will be noticed that the six schemes begun by the board and com­
pleted by the council involved a cost of a little under £45 ($218.99)
for each person displaced.
Under the act of 1890 the council undertook 10 important clear­
ance schemes. The following table gives the important data con­
cerning these:
P A R T IC U L A R S O F S C H E M E S U N D E R T A K E N O R B E IN G U N D E R T A K E N B Y T H E C O U N ­
C IL U N D E R P A R T I O F T H E H O U S IN G O F T H E W O R K I N G C L A S SE S A C T , 1890.
[Source: Housing of the W orking Classes in London, 1855-1912, London, 1913, p. 148.]

Name and date of scheme.

Number
of persons
displaced
or to be
displaced.

Number
Number of persons
of persons provided
required
or pro­
to be re­ posed to
housed.
be pro­
vided for.

Size of
area ia
acres.

Actual
or esti­
mated net
cost of
Actual
scheme,
or esti­
after de­ Housing
mated
ducting
value of
cost of
proceeds sites for
buildings,
of sales,
rehous­
including
ing.2
value of
incident­
surplus
als.2
land, and
housing
value of
sites.1

COMPLETED SCHEMES.

Boundary
Street,
Bethnal
Green,3 1890...................................
Cburchway, St. Pancras, 1895...
Clare Market, Strand, 1895..........
Garden R ow , R oby Street, Bal­
tic Street, Honduras Street,
St. Luke, 1899..............................
Webber Row and Wellington
Place, and K ing’s Bench
W alk, Southwark, 1899............
Aylesbury Place, Clerkenwell,
and Union Buildings, Holbom , 1899.......................................
Burford’s Court, Tucker’ s Court,
and Favonia Street, Poplar,
1899...................................................
Nightingale Street, St. Marylebone, 1899.......................................
Providence Place, Poplar, 1901..

5,719
1,095
3,172

4,700
580
2,250

5,524
832
2,286

14.85 4
$1,304,168 &$306,638 $1,375, 541
l M
41,609
190,412
156,030
292,666
92,984
5.23
498,987

1,193

1,193

1,216

2.62

441,065

63,265

270,519

997

903

1,143

5.16

324,785

47,448

209,459

1,402

1,414

1,424

2.76

755,154

78,691

402,732

269

269

269

.89

46,811

6 6,979

55,541

576
361

576
8 400

630
None.

.88
.87

(7)
54,052

(7)

(7)

Tabard Street, Grotto Place,
and Crosby R ow , Southwark,
1910...................................................

4,552

2,580

2,580

17.00 91,897,448

(i°)

Total.........................................

19,336

14,865

15,904

52.24 5,272,179

SCHEME IN PROGRESS.

628,630

637,614 3,631,821

1 To September 30,1912.
2 The interest and sinking-fund charges on these amounts are met out of the rents.
3 Including Goldsmith’s Row site dealt with in connection with Boundary Street scheme.
4 Including £3,795 ($18,464) for Goldsmith’ s Row.
&Including £1,000 ($4,867) for Goldsmith’s Row.
6 Land for rehousing purposes was transferred from Blackwall Tunnel at a price of £5,450 ($26,522) and
charged to the dwellings account at the same value. Only part of the dwellings erected were required for
the scheme, and the charge for site to the dwellings account in respect of the scheme was only £1,434 ($6,979).
Account, however, has had to be taken of the figure of £5,450 ($26,522) in arriving at the net cost (£9,6" 9
[$46,811]) set out in previous column.
7 Cost of scheme borne, and new buildings erected by Lord Portman.
8 Obligation to rehouse remitted by Local Government Board.
9 Excluding the cost (estimated at £4,800 [$23,359]) of laying out the open space.
1 Not yet fixed.
0




298

B U L L E T IN OF T H E BUREAU OF LABOR STATISTICS.

The most important of the completed schemes shown here is the
Boundary Street, Bethnal Green, scheme. The net cost of this was
a trifle under £47 ($228.73) for each person displaced. This was not
as much as the average cost of the schemes carried through by the
Metropolitan Board, but this was the first important scheme under­
taken under the act of 1890 and it was vigorously attacked by all
who disapproved of the act, as well as by those who objected to the
general principle of governmental activity of this kind. The criti­
cisms directed against it were so numerous and severe that 20 years
elapsed before, in 1910, the council again attempted a scheme of
anything like the same magnitude.
There are two points especially worth noticing in connection with
the clearance work done by the county council since 1890. The
number of persons per acre on the condemned areas averaged 370.1
as against 507.9 per acre on the areas condemned before 1890. It
seems probable that the earlier work had cleared away the worst of
the slums, and that the falling off in the amount of such work done
during the last 24 years may be partly due to a decreased need for
such activity.
Also an attempt was made at cooperation between public authori­
ties and private owners. Slum areas have not infrequently acquired
their undesirable character while leased. The real owners may be
very desirous of righting the objectionable features, but they can not
recall the leases and regain control. Under such circumstances it is
entirely possible for the authorities to go through the usual condem­
nation proceedings, acquire a valid title to the land, and then turn it
back to the original owner for clearance and reconstruction. In such
a case the owner bears all the expenses of the scheme, but the local
authorities make it possible for him to act. This plan has been
worked out successfully in only one instance as yet, involving what
is known as the Nightingale Street, St. Marylebone, area. This com­
prised less than an acre, but housed 576 people. As part of the
scheme the owner provided healthful dwellings which would accom­
modate 630 people.
London has naturally been the chief field for activities of this kind,
but the other large cities of England have done much also. During
the period 1876-1890, inclusive, the Local Government B oard1 sanc­
tioned schemes adopted by various cities other than London involv­
ing loans to the amount of £2,347,353 ($11,423,393).2 Birmingham
undertook one of the most ambitious of these schemes, of which details
are given in the account of its housing activities, pages 318 to 321.
1 The sanction of the Local Government Board is required for housing schemes outside of London.
2 Sykes, Journal of the R oyal Statistical Society, vol. 64, p. 217 (June, 1901).




299

G O V E R N M E N T AID TO H O U SIN G ---- GREAT B R IT A IN .

Very few cities attempted large schemes, but a number carried
through smaller plans. Under the earlier acts, however, such work
was unnecessarily difficult and expensive. Under the act of 1890
the procedure of condemning and acquiring an insanitary area was
somewhat simplified, and the arrangements for compensation were
made somewhat more favorable for the authorities acquiring it.
From the passage of this act up to 1913, inclusive, the Local Govern­
ment Board sanctioned loans for clearance schemes outside of London
amounting to over $13,000,000. The amounts sanctioned for each
year were as follows:
L O A N S S A N C T IO N E D F O R C L E A R A N C E SC H E M E S O U T S ID E O F L O N D O N B Y T H E
L O C A L G O V E R N M E N T B O A R D U N D E R P A R T I O F T H E H O U S IN G O F T H E W O R K I N G
C L A S SE S A C T , 1890, SIN C E T H E P A S S IN G O F T H E ACT.*
[Source: Report of Local Government Board, 1912-13, Pt. II, Housing and Town Planning, Appendix
No. 5.]

Year ending
Mar. 31—

Am ount
sanctioned.

Y ear ending
Mar. 31—

Am ount
sanctioned.

Year ending
Mar. 31—

1891...............................
1892...............................
1893...............................
1894...............................
1895
1896
1897...............................
1898...............................
1899...............................

$571,205
1,098,856
150,862
121,312
512,014
286,973
335,282
230,614

1900...................................
1901...................................
1902...................................
1903...................................
1904...................................
1905
1906...................................
1907...................................
1908...................................

$539,228
1,031,260
48,723
298,365
4,108,737
979,792
324,917
222,331
267,249

1909...................................
1910...................................
1911...................................
1912...................................
1913...................................

$601,903
127,721
1,091,103

T otal...................

13,171,600

Am ount
sanctioned

223,153

1A report received since this study was made shows that during the year ended March 31, 1914, loans
amounting to $490,704 were sanctioned.

Some of the schemes for which these loans were sanctioned were
large and costly. Thus, Manchester raised £285,005 ($1,386,977)
for clearing and rebuilding slum areas, while Leeds borrowed £923,318
($4,493,327).* The work done was of the same character as that
accomplished under the earlier acts.
ACTION AGAINST SMALL SLUMS AND INSANITARY HOUSES.

Under Part II of the act of 1890 local authorities may proceed
against small unhealthy areas, compulsorily acquiring whatever
property is necessary to put them into good condition. In London
16 such schemes have been undertaken, 4 by the county council and
the remainder by other local authorities. The following data show
the extent of the work undertaken.2
1 Housing U p to Date, W . Thompson, pp. 19 and 20. London, 1907.
2 Housing of the Working Classes in London, 1855-1912, London, 1913, p. 150.




300

B U L L E T IN

OF T H E BUREAU OP LABOR STATISTICS.

Extent o f housing ivork o f local authorities in London against small unhealthy areas.
5, 633
Number of persons displaced.............................................................
Number of persons for whom housing has been or will be
6,066
provided........................................................
13. 44
Size of areas in acres.....................................
Actual or estimated net cost of schemes
$1, 030, 978

Outside of London little of this kind has been attempted. Man­
chester carried out three schemes, involving 3^ acres, displacing 917
persons, and costing £34,909 ($169,885). Elsewhere very little has
been done.
This part of the act also provided for the closing of unhealthful
houses and their demolition, if the owners could not or would not
put them into proper condition. The method provided for doing
this, however, was so troublesome that for years little was accom­
plished under it. A report on the subject issued in 1911 declares:
A number of local authorities have tried to close or demolish
unhealthy dwellings under sections 32 and 38 of the act of 1890.
Unfortunately the cumbrous and ineffective procedure has crippled
much of their work, and it has been practically impossible to get
unhealthy menes compulsorily demolished. It is to be hoped the
act of 1909 will make for improvement.1
It very promptly became evident that this hope was to be ful­
filled. The amendments in the act of 1909 not only made the pro­
cedure of closing and demolition much easier,2 but, as already men­
tioned, gave the Local Government Board power to require of the
local authorities throughout England systematic inspection and
reports upon the sanitary condition of dwellings within their respec­
tive spheres of authority. The immediate result of these changes
was to increase enormously the number of houses proceeded against
as being so dangerous or injurious to health as to be unfit for human
habitation. The changes in the act have worked in two ways— the
local authorities can act more easily and promptly; and the fact that
they can do so leads owners in increasing numbers to repair their
houses upon notification without waiting for a closing order. The
following table shows the increase in this kind of work since the
passage of the act of 1909.
1 The Municipal Year Book for 1912, p. 760, London, 1912.
2 Under the act of 1890 closing orders could he made only by a court of summary jurisdiction on the ap­
plication of a local authority. The act of 1909 altered the procedure and empowered a local authority to
make such an order. If a house is rendered fit for habitation after a closing order has been made concern­
ing it, the local authority must determine the order; if it is not, after the expiration of a prescribed period
and after giving a hearing to the owners, the local authorities m ay order the demolition of the house.




301

G O V E R N M E N T AID TO H OU SIN G-----GREAT B R IT A IN .
A C T IO N T A K E N B Y L O C A L A U T H O R IT I E S IN R E G A R D TO T H E C L O SIN G A N D
L I T I O N OF H O U S E S U N D E R T H E H O U S IN G AC TS.

DEMO­

[Source: Memorandum No. 3 of the Local Government Board Relative to the Operation of the Housing,
Town Planning, etc., A ct, London, 1913, p. 4.]

Local authorities.

Houses
Houses
made
in respect
fit for
of which
human
Year represen­
habita­
ending tations
tion by
March
were
owners
made to
31— .
without
local
issue of
authori­
a closing
ties.
order.

21

Houses
closed
or
demol­
ished
volun­
tarily.

Houses
in re­
Houses
in respect spect of
of which which
closing
closing
orders
orders
were
were
deter­
made.
mined.

5
35
243
280

0)

1909
1910
1911
1912
1913

82
1,395
556
298

5
7
52
39
30

31
54
42

1909
1910
1911
1912
1913

2,062
1,645
3,181
5,136
6,033

1,130
654
637
1,257
1,225

480
444
422
244
302

301
658
1,657
2,829
3,561

0)

Town councils of county bor­
oughs .........................................

1909
1910
1911
1912
1913

567
638
2,527
5.792
5,780

258
291
893
1,227
1,846

118
129
167
213

96
233
696
1,422
1,623

0)

Town councils of other bor­
oughs .........................................

Other urban district councils.

1909
1910
1911
1912
1913

1,383
1.793
8,218
15,754
19,504

821
636
2,621
4,525
6,356

392
379
395
715
637

327
1,301
3,280
3,017

1909
1910
1911
1912
1913

2,279
2,271
9,108
20,191
24,092

1,517
1,468
2,839
6,369
8,650

517
425
460
755
973

119
258
973
1,950
2,294

6,312
6,429

3,731
3,056
7,042
13,417
18,107

1,510
1,389
1,419
1,935
2,167

587
1,511
4,870
9,761
10,695

Metropolitan borough coun­
cils..............................................

Rural district councils.

Total, England and
W ales............................

2 24,429
2 47,429
2 55,707

12

111

200

4

Houses
(in respect
of which
closing
orders
had been
made) de­
molished
b y owners
without
orders for
demoli­
tion.

0)
0)

102

Houses
in re­
spect of
which
orders
for
demoli­
tion
were
made.

2
51

75
78
156
493
765
76

101
320
446

0)

70
223
780

0)

50
248
413

0)
274
732
2,108
2,870

149

8.

8

67
160
185

0)
0)181
343

0)
VI.
110
173
285

0)
(V

1,072
1,550

111
155
617
1,209

6
20
112
290
274
20
15
135
296
437

21
24
91
169
204
196
170
495
1,423
2,193

1 This information is not available.
2 in a very large number of these cases (viz., over 12,000 in 1912-13, over 12,500 in 1911-12, and over 5,200
m 1910-11) the local authorities decided to proceed by way of notices under section 15 of the act instead of
making closing orders.

This table is especially noticeable for the large increase shown in the
number of houses voluntarily closed, demolished, or put into repair
by the owners after the act of 1909 became effective. But the
greatest increase of all is shown in the number of houses against which
closing orders were issued, more than 18 times as many of these orders
having been issued in the year ending March 31, 1913, as in the first
year considered. This almost casts into the shade the increase in
the number of houses condemned— nearly nine times as many in the
last year as in the first— and in the number of houses demolished,
which was a trifle over 11 times as great in 1912-13 as in 1908-9.
These figures relate to action taken when a house is in a condition
so dangerous or injurious to health as to be unfit for human habita­
tion. But the act of 1909 (sections 15 and 17) gave the authorities




302

B U L L E T IN OF T H E BU REAU OF LABOR STATISTICS.

power under certain circumstances to act before conditions became
so bad. Houses of which the annual rental falls below a specified
sum— in London, £40 ($194.66), in provincial boroughs or urban dis­
tricts with a population of 50,000, £26 ($126.53), and elsewhere
£16 ($77.86)— must be kept by the landlord while occupied “ in all
respects fit for human habitation.” The local authorities are em­
powered to see that this is done, and for this purpose have rights
of entry and inspection. If the landlords on being notified of unsat­
isfactory conditions fail or refuse to set them right, the local authori­
ties may do what is necessary and recover costs from the landlords.
The following table shows the number of houses dealt with under
this part of the act.
I M P R O V E M E N T OF H O U S IN G C O N D IT IO N S T H R O U G H A C T IO N
T IE S .

OF LO CAL A U T H O R I­

[Source: Memorandum No. 3 of the Local Government Board Relative to the Operation of the H ous­
ing, Town Planning, etc., A ct, London, 1913, p. 5.]

Number of houses in respect of which—

Notices under section 15 were satisfactorily complied with by the
landlords............ ....................................................................................................
Local authorities executed works under section 15 where landlords
failed to comply with notices.........................................................................
Action was taken under section 17 and the houses were made fit by
the owners without closing orders being issued......................................
Closing orders were determined on the houses being made fit by the
owners ......................................................................................................... ..
Total.................................................................................................................

Year end­
ing Mar.
31,1911.

Year end­
ing Mar.
31,1912.

i 11,649

31,289

i 40

176

107

7,042

13,417

18,107

Year end­
ing Mar.
31,1913.

42,083

732

2,108

2,870

19,463

46,990

63,167

i These figures relate to period from Dec. 3, 1909, to Mar. 31, 1911.

It will be noticed that the greatest rates of increase are shown in
the number of houses repaired by the landlords upon notice being
given, and the number put into good condition after closing orders
had been issued. The number of cases in which the local authori­
ties made repairs is noticeably small; evidently the fact that such a
power exists is a stimulus to the landlords to do their own repair­
ing. The most striking feature of the table is the amount of
achievement it shows. In a little over three years 129,620 houses
were made fit for habitation at the cost of the owners or landlords.
This activity does not seem to have been confined to any one
part of the country. The following list shows the classes of local
authorities and the number in each class who took action under
this part of the act of 1909:
Metropolitan borough councils.....................................................................
Town councils of county boroughs.............................................................
Town councils of other boroughs.................................................................
Other urban district councils.......................................................................
Rural district councils....................................................................................

29
75
249
809
652

Total (England and Wales).............................................................. 1,814




G O V E R N M E N T AID TO H O U SIN G ---- GREAT B R IT A IN .

303

The provisions in regard to procedure against insanitary houses
confer large powers upon the local authorities, but these seem to be
used with great discretion. Any landlord or owner who feels him­
self aggrieved has the right of appeal to the Local Government Board
against the judgment of the local authorities. The table given on
page 301 shows that from the passing of the act of 1909 to March
31, 1913, representations had been made against 140,306 houses.
During this period only 321 appeals in respect to 1,769 houses were
received by the Local Government Board. These were dealt with as
follows:
Appeals abandoned or not entertained......................................................... 211
Appeals decided:
1. Appeals upheld—
(a) on technical grounds.................................................................... 12
(b) after inquiry................................................................................... 15
2. Appeals dismissed after inquiry........................................................
56
Appeals still under consideration.................................................................... 27
Total.............................................................................................................. 321

The appeals brought affected less than 1.3 per cent of the houses
against which representations had been made, and of the 294 appeals
settled not quite one-tenth (9.2 per cent) were upheld.
PROVISION FOR NEW HOUSING BY LOCAL AUTHORITIES.

The earliest of the housing acts empowered local authorities to
erect, own, and operate lodging houses for the working classes, and
the Cross Acts expressly laid upon them the obligation of seeing that
housing accommodation was provided for a specified part of those
whose dwellings were destroyed in any clearance scheme. For a long
while, however, there was a prevailing sentiment that the work of the
authorities should be limited to acquiring and clearing off land,
leaving the erection and management of new houses to private effort.
Relatively little was done, therefore, by local authorities in the way
of housing until the passage of the act of 1890, which not only en­
couraged them to rebuild the areas which they cleared, but permitted
and encouraged them to acquire land and put up houses for the work­
ing classes whenever they felt there was need of such action. The
act of 1909 increased the powers of local authorities in this direction,
facilitated the procedure for acquiring land compulsorily when this
was necessary, and improved the terms on which loans might be ob­
tained. Under these circumstances the work of providing housing
accommodation by local authorities received a great impetus. This
has been especially noticeable in rural districts,1 although it has been
marked everywhere.
1 In the 20 years following the housing act of 1890 loans sanctioned to rural authorities amounted to
less than £50,000 ($243,325). The total for the last two years is more than five times that amount, or
£255,397 ($1,242,890), while the total for 1913 alone considerably exceeds the whole amount sanctioned in
previous years since 1890.
Memorandum No. 3 of the Local Government Board Relative to the Operation of the Housing, Town
Planning, etc., Act of 1909, p. 7.




304

B U L L E T IN O F T H E BU REA U OF LABOR STATISTICS.

The work of the urban and rural authorities will be considered
separately, London, Liverpool, Birmingham and Manchester being
taken as illustrative of the work done in cities, and the action of
urban authorities elsewhere being merely summarized.
HOUSING W ORK OF LONDON COUNTY COUNCIL.

The London County Council and, to a much smaller extent, other
local authorities of London have built for the sake of rehousing and
of housing. The rehousing was done mainly in connection with slumclearance schemes, though a portion of it consisted in providing ac­
commodations for persons dispossessed when clearances were made
for bridges, tunnels, street widenings, and the like. The housing was
undertaken mainly because of an actual insufficiency of accommoda­
tions, and was entered upon with considerable hesitation.
At first the council, as a rule, took action under Part III of the act
of 1890, only when such a course was necessary or useful for the dis­
charge of its rehousing obligations. Before many years had passed it
was evident that, owing chiefly to two causes, the supply in London
of dwellings for the working classes was falling behind the demand.
These causes were the rise in the value of land and the rise in the cost
of labor and materials for building. It was becoming unprofitable
for builders to erect working-class property and, further, the rise
in the value of land often made it financially advantageous to de­
molish such property and to use the sites for factories, warehouses, or
other large commercial buildings, or for highly rented mansions and
flats. The council was much impressed with the need of remedying
this state of affairs, and in order to do this it decided in November,
1898, * * * quite apart from any obligations which it was under
to erect dwellings, to take action under Part III of the act of 1890,
provided that no charge was thereby placed on the county rate.
Succeeding years witnessed the inception of schemes for developing
large estates by the erection of cottages at Tooting, Norbury, Totten­
ham, and Hammersmith.1
The amount of work undertaken for each of these purposes is in­
dicated by the following figures:
H O U S IN G A C C O M M O D A T IO N S P R O V I D E D B Y T H E L O N D O N C O U N T Y C O U N C IL .
[Source: Housing of the Working Classes in London, 1855-1912, London, 1913, pp. 147-152.]
Number of
persons
provided
for.

Rehousing:
Under early acts...........................................................................................................................
Under Part I, act of 1890...........................................................................................................
Under Part II, act of 1890.........................................................................................................
For persons dispossessed by clearances in connection with bridges, tunnels, etc

15, <m

Total rehousing
Housing schemes under Part III, act of 1890

33,571
46,573

•Housing of the Working Classes in London, 1855-1912, London, 1913, p. 25,




2,947

2,216
12,504

G O V E R N M E N T AID TO H O U SIN G ---- GREAT B R IT A IN .

305

The buildings put up for housing purposes, it will be noticed,
accommodate a considerably larger number than all those put up for
rehousing purposes since the council first undertook such work.
In addition to the buildings given in the above table, other local
authorities of London, under the stimulus of the new possibilities,
acquired or erected up to December 31,1911, working-class tenements
containing 8,321 1 rooms, and therefore capable, according to the
usual method of calculation, of accommodating something over 16,000
persons. The county council, however, is the chief municipal
housing agent in London.
The property owned and administered by the council is of three
kinds:
1. Block dwellings, comprising 6,428 tenements;
2. Cottage estates, comprising 2,844 cottages;
3. Lodging houses, comprising 1,856 cubicles.
The block dwellings originated in the earlier days of municipal
housing. As long as the provision obtained that rehousing must be
provided on the same site from which clearance schemes had displaced
people, the cost of building in such places and the necessity for hous­
ing a large number on a limited space (part of the original area having
been taken for new streets, open spaces, and the like) made it almost
inevitable that block buildings should be put up. There is a strong
and growing objection among housing reformers to this type of dwell­
ing, on the ground of its unhomelikeness, its lack of privacy, its bad
record in the matter of health, and finally its cost. The tendency now
in building is toward tenement houses, which, as the term is defined
in England, accommodate usually three or four families and never
more than six, and to cottages or cottage flats housing at most two
families. The lodging houses are for men only. The common charge
is sixpence (12 cents) per night for a bed in a separate cubicle, though
a few bedrooms at Is. (24 cents) are provided.
The dwellings are managed by a housing department with a housing
manager in charge. U
A11 estates are directly administered from the
central office through the medium of resident superintendents at the
large estates and lodging houses, and of resident caretakers at the
small estates.” Applications for rooms must be referred to the cen­
tral office, and no tenant is accepted until his references have been
looked up. Overcrowding is not permitted, but the standard of per­
missible crowding is liberal— “ the standard of twT persons to a room
o
must not be exceeded by more than one child under 3 years of age.”
Tenants on the block estates are not allowed to take lodgers, but on
the cottage estates permission to do this is given by the council under
certain conditions. Regulations are kept down to the lowest possible
number.
1 O f t h e s e 2 , 0 8 9 r o o m s r e p r e s e n t e d r e h o u s i n g a n d 0/232 h o u s i n g s c h e m e s .

(><>171°— Bull. 158— 15--------20




806

B U L L E T IN

OF TIIE BUREAU OF LABOR STATISTICS.

No restrictions beyond tliose in the interest of the tenants them­
selves are imposed in the conditions of tenancy. Tenants are re­
quired in turn to clean the staircases and landings of the blocks in
which they reside. At the cottage estates it is a condition of tenancy
that the front gardens, with the exception of the hedges, which are
maintained by the council, shall be kept in a cultivated condition.
The cleaning of the common yards and the lighting of staircases is
carried out by porters employed on the larger estates and by the care­
takers at the smaller estates.1
The rents vary from one place to another, but are fixed in accord­
ance with two principles. They must not exceed the rates prevailing
in the neighborhood, and they must be sufficient to insure that after
providing for all expenditures for maintenance and capital charges
the dwellings shall be self-supporting. Rents for one-room dwellings
range from 2s. 3d. (55 cents) to 5s. 6d. ($1.34), for two-room dwellings
from 3s. 6d. (85 cents) to 9s. ($2.19), and for three rooms from 4s. 9d.
($1.16) to 11s. 6d. ($2.80) weekly. Details as to accommodations,
rents, etc., are shown in the following table:
ACCOMMODATIONS PROVIDED IN THE LONDON COUNTY COUNCIL’S DWELLINGS
AND THE GROSS ANNUAL RENT ON MAR. 31, 1892, AND EACH SUBSEQUENT
YEAR.
[Source: Housing of the Working Classes in London, 1855-1912, London, 1913, p. 157.]
Year.

.........................
189?
1893
................................
1894
................................
1895
............................................
1896
............................................
1897 .................................................
1898 .................................................
1899 ............... ...................................
1900
............................................
1901......................................................
1902
...............................................
1903
............................................
1904 .................................................
1905
...............................................
1906 ..................................................
1907......................................................
1908
............................................
1909.......................................... ........ .
1910 .............................................. .
1911
..................................
19122 ............................................

Tene­
ments.
56
56
56
358
602
984
1,263
1,355
1,523
2,346
2,951
3,881
4,666
5 929
',
6,326
7,474
7,880
8,196
8,539
8,947
9,272

Rooms.
87
87
87
871
1,485
2,603
3,261
3,525
3,966
5,936
7,368
9,552
11,661
15,098
16,352
19,879
21,085
22,210
23,578
25,006
26,291

Cubicles.

324
324
324
324
324
324
324
324
324
324
324
1.147
1.147
1.147
1.845
1.845
1.845
1.846
1,849
1,856

Persons
provided
for.
174
498
498
2,066
3,294
5,530
6,846
7,374
8,256
12,196
15,060
19,428
24,469
31,343
33.853
4 ', 648
1
44,060
46,310
49,003
51,856
54,130

Gross annual
rent.
$3,062
17,410
17,410
39,514
62,827
107,163
135,986
146,298
164,645
249,369
305,521
394,615
501,690
C28,409
663,379
812,460
863,744
905,639
944,197
1,009.024
1,039, 435

1Housing of the Working Classes in London, 1855-1912, London, 1913, p. 101.
2The following extract from a memorandum by the housing manager gives the data for the latest year
available:
The new buildings completed and opened between Apr. 1,1912, and Mar. 31,1913, comprise 239 cottages,
providing accommodation for 1,503 persons. Five sheds were also provided and 1 tenement was converted
for use as bathrooms. Up to Mar. 31,1913, a total of 6,120 tenements in block dwellings and 3,090 cottages,
or a total of 9,510 lettings, containing 27,051 rooms, and 1,856 cubicles in lodging houses, affording accommo­
dation altogether for 55,571 persons, had been provided and opened by the council. The gross rent receiv­
able for the year 1912-13 was £220,498 15s. 2d. [$1,073,057], being an Increase of £3,63117s. lOd. [$17,674.60].
The financial result of the year’s working of all dwellings in occupation, after providing for interest and
sinking-fund charges on the capital expended, is a surplus of £9,937 4s. 4d. [$48,359], which, after adding
interest on cash balances (£719 10s. 7d. [$3,502]), gives a total net surplus of £10,656 14s. 1 . [$51,861], or
1(1
4.83 per cent of £220,498 15s. 2d. [$1,073,057], the gross rent receivable for the year. The interest and sinkingfund charges amount to 51.26 per cent of the gross rental. The sinking fund, which will redeem the capital
expended on land and buildings within a period of C years, has been increased during the year by £24,018
O
11s. [.§116,886], and the total sum now set aside in this fund in respect of dwellings in occupation amounts
to £216,294 11s. lOd. [$1,052,598]. The expenditure for the management of the estates, including repairs,
rates, and taxes, water, lighting, etc., amounts to 38.18 per cent of the gross rental.—London County Council
Annual Report, 1912, Vol. Ill, p. 235.




307

G O V E R N M E N T AID TO H O U SIN G ---- GREAT B R IT A IN .

The charge is sometimes made that the council’s dwellings are
made use of by a class above those for whom they were intended.
The council takes a yearly census of its tenants, including their
occupations among the points covered. The latest census of which
the results are available was taken in March 1912. The complete
list of occupations found is too long for quotation, but those in which
more than a hundred tenants were engaged were as follows:
P R IN C IP A L

O C C U P A T IO N S

OF T E N A N T S OF D W E L L IN G S
C O U N C IL , M A R C H , 1912.

Occupation.

Agent and commercial traveler...................
A ttendant...........................................................
Bootmaker..........................................................
C abinetm aker...................................................
Carman, carrier, and coachman..................
Carpenter and ioilier.......................................
Charwoman and cleaner................................
Cigar and cigarette maker............................
Clerk......................................................................
Compositor.........................................................
Engineer................ ..............................................
Fitter and plumber.........................................
Laborer ..............................................................

Number, j

OF L O N D O N

COUNTY

Occupation.

202 ' Miscellaneous.....................................................
116

101
20S
235
151
272
128
495
124
115
131
549

Omnibus and motor driver..........................
Omnibus and motor conductor..................
Packer...................................................................
Painter and decorator................................
Police constable, sergeant, and detective.
Porter........................................................
P o s tm a n ....................................
Salesman.........................................
Seaman and coast guard...............................
Tailor and tailoress.................... , ...................
Waiter and valet.............................................
Warehouseman.............................................

Number.

511
204

111
115
139
349
339
127
28f>
145
205
125
194

On the whole the table seems to show that the charge referred to
is unfounded. The large groups given above would nearly all be
included in any definition of the working classes and the smaller
groups are for the most part of the same character.
The birth and death rates among the occupants of the councils
dwellings compare favorably with those prevailing throughout the
city generally. For the year ending March, 1912, the birth rate in
these buildings was 27.5 and the death rate 8.5 per 1,000, while for
the whole of London in 1911 these rates were respectively 24.7 and
15 per 1,000.
The council has under way at present a plan for aiding the small
tenant to become a householder. The act of 1899 1 empowered local
authorities to make loans to workingmen to enable them to purchase
the houses in which they live, but such loans were limited to fourfifths of the market value of the houses in question. Properly is
so high in London that the amount thus left for the workingman to
raise by his own efforts was beyond his ability.
The council felt that any plan which was to appeal successfully
to those classes should provide for the advance of practically the
whole of the purchase money. It accordingly formulated a scheme
for granting leases for 99 years of single cottages erected on estates
developed under Part III of the act of 1890. * * * Leases
should be granted to occupiers on payment of a deposit of £5 [$24.33],
the lessee being required (1) to pay throughout the term of the
lease the equivalent of a ground rent; and (2) to make equal payments




1 See p. 290.

308

B U L L E T IN

OF T H E BU REAU OF

LABOR STATISTICS.

for the first 15, 20, or 25 years, sufficient to repay the amount spent
on the land and buildings (less the deposit and the capitalized value
of the ground rent), interest, legal, etc., costs and establishment
charges, etc.1
The lessee is expected to live in the house, but under certain
circumstances the council will permit him to let the house 'or transfer
the lease. Arrangements are made for the council to retake the prop­
erty should the lessee fail to live up to the terms of the contract, and
for the surrender of the lease by agreement, in which case the lessee
is to receive suitable compensation. If the lessee wishes to pay for
the building in 15 years, the extra weekly cost on a four-room
cottage rented at 10s. 6d. ($2.55) a week will be from 3s. 3d. to 4s.
(79 cents to 97 cents); if he chooses the 20-year period the increased
weekly cost will be from Is. 9d. to 2s. 4d. (43 cents to 57 cents);
while if the 25-year period is chosen, the tenant will secure the cottage
for a charge approximately equal to the ordinary rent.
HOUSING W ORK OF LOCAL AUTHORITIES OUTSIDE OF LONDON.

Outside of London much work has been done by local authorities
in the way of providing dwellings under Part III of the act of 1890.
The following table gives some details both as to the amount of such
work done and its development since the act was passed.
1 H ou sin g of the W o r k in g Classes in L o n d o n , 1855-1912, L o n d o n , 1913, p. 29.




309

G O V E R N M E N T AID TO H O U SIN G ---- GREAT B R IT A IN .

D E T A I L S OF L O A N S S A N C T IO N E D B Y L O C A L G O V E R N M E N T B O A R D TO L O C A L A U ­
T H O R I T I E S U N D E R P A R T III O F A C T OF 1890.1
(Source: Forty-second Annual Report of the Local Government Board, 1912-13, Pt. IT, Housing and
Town Planning, p. xxxviii.]

Y ear
ending
Mar. 31—

Num ­
ber to
which
loans
were
sanc­
tioned
in the
year.

N um ­
ber to
which
loans
were
sanc­
tioned
for the
first
time
in the
year.

N um ­
ber to
which
loans
were
sanc­
tioned
in the
year.

N um ­
ber to
which
loans
were
sanc­
tioned
for the
first
time
in the
year.

Am ount
sanctioned.

$56,208
9,733
84,434
39,905
167,831
179,087
461,505
1,362,459
1,949,530
1,099,581
615,632
913,296
978,512
432,681
346,076
285,795
421,940
232,735
500,558
980,921
1,672,134

1892.
1893.
1894.
1895.
1897.
1898.
1899.
1900.
1901.
1902.
1903.
1904.
1905.
1906.
1907.
1908.
1909.
1910.
1911.
1912.
1913.
Total.

Am ount
sanctioned.

Total urban and rural au­
thorities.

Rural authorities.

Urban authorities.

131

655,625

N um ­
ber to
which
loans
were
sanc­
tioned
for the
first
time
in the
year.

Am ount
sanctioned.

9,003
10,950
973
12,166
7,300
104,630
8,760
2 59,517
1,217
134,242
289,834

12,790,553

N um ­
ber to
which
loans
were
sanc­
tioned
in the
year.

$56,208
18,006
84, 434
39, 905
167,831
179,087
461,505
1,371,219
1,949,530
1,099,581
624,635
924,246
979, 485
444,847
353,376
390,425
430,700
292,252
501,775
1,115,163
1,961,968

8,760

324

13,446,178

1 The Forty-third Annual Report of the Local Government Board, received while this Bulletin was
going through the press, gives the following data for the year ending March 31. 1914:
Urban authorities—
Number to which loans were sanctioned.....................................................................................................
79
49
Number to which loans were sanctioned for the first time..................................................................
Amount sanctioned.............................................................................................................................................. $2,753,758
Rural authorities—
Number to which loans were sanctioned.....................................................................................................
45
Number to which loans were sanctioned for the first time..................................................................
33
Amount sanctioned..............................................................................................................................................
1942,057
Total, urban and rural authorities—
Number to which loans were sanctioned.....................................................................................................
124
Number to which loans were sanctioned for the first time..................................................................
82
Amount sanctioned.............................................................................................................................................. $3,695,815

2 Including £11,960 ($58,203), sanctioned to county council on default of rural district council.

In considering the fluctuations in the amounts shown for each year
it must he remembered that the total amount of a loan granted to
carry out a scheme must be sanctioned before the scheme can be
undertaken. The sums sanctioned in 1901, for instance, might be for
schemes which would take years to work out, and the money might
be secured as it was needed during the process. The period of small
loans, 1906-1910, therefore need not denote any diminution of interest
in housing affairs, but may show simply that local energies were ab­
sorbed in working out the plans sanctioned in earlier years. Never


810

B U L L E T IN

OF TH E BU REAU OF LABOR STATISTICS.

theless the sudden and very marked increase in the loans sanctioned
beginning with the first year in which the act of 1909 became really
effective seems to show a decided increase of activity, an increase
which becomes more apparent with each successive year.
Most of the work done by the urban authorities to whom these
loans were sanctioned resembled that done in London. A few cities
erected model lodging houses, but this form of activity is looked upon
with considerable doubt, as a lodging house is apt to require a large
initial outlay and frequently must be run at a loss. In 1907 seven
English cities besides London—Croydon, Darwen, Huddersfield, Lan­
caster, Manchester, Salford, and Southampton— had built and were
conducting municipal lodging houses. Of these Huddersfield was the
only one in which the lodging house showed a profit, Croydon and
Southampton not being reported on.1
The block dwelling is not frequent among municipal buildings out­
side of London, and is plainly losing whatever favor it once possessed.
In 1903 the number of such dwellings put up and owned by local au­
thorities was reported, as follow s:2 Liverpool, 501; Manchester, 420;
Nottingham, 82.
Four years later a review of the situation showed that no more
block dwellings had been erected by these cities,3but that in the inter­
val Liverpool had put up dwellings containing 1,234 tenements and
Manchester dwellings containing 64 tenements. The total number of
tenement dwellings erected by municipal authorities increased during
this period from 852 to 2,507. The increase in the number of larger
tenements is shown in the following table:
T E N E M E N T D W E L L I N G S E R E C T E D B Y U R B A N A U T H O R IT I E S .
[Source: Housing U p to Date, W . Thompson, p. 45.

Period.

One
room.

Two
rooms.

U p to 1902.................................................................
1902 to 1907...............................................................

56
143

514
595

T otal...............................................................

199

1,109

London, 1907.]

Three
rooms.

Four
rooms.

206
725
931 |
!

Five
rooms.

12
150

42

162

42

Of these dwellings erected up to 1902 by far the larger portion
(72.3 per cent) had under 3 rooms, while of those erected between
1902 and 1907 only 44/6 per cent had fewer than 3 rooms.
The greatest increase during this period appeared in the number
of cottage flats put up by urban authorities. The following table
shows the increase in the flats of different sizes.




1 Housing U p to Date, V r. Thompson, p. 39. London, 1907.
\
2 Housing Handbook, W . Thompson, p. 69. London, 1903.
3 Housing L^p to Date, W . Thompson, pp. 40-60. London, 1907.

311

G O V E R N M E N T AID TO H O U SIN G ---- GREAT B R IT A IN .
C O T T A G E F L A T S E R E C T E D B Y U R B A N A U T H O R IT I E S .
[Source: Housing U p

to

Date, W . Thompson, p. 40.

Dwell­
ings.

Period.

Total
rooms.

London, 1907.]

One
room.

Two
rooms.

Three
rooms.

Four
rooms
and over.

U p to 1902................................................................
1902 to 1907..............................................................

581
1,423

1,780
3,967

79

141
487

262
509

ITS
348

Total..............................................................

2,004

5,747

79

628

771

526

Unfortunately, similar data for the period from 1890 to the present
are not obtainable.
It is difficult to make any general statement as to the profit or loss
involved in municipal housing. The table on page 309 shows loans
sanctioned to 131 different urban authorities. With these loans the
authorities either have provided or expect to provide 2,981 houses.
According to the estimates presented, the 1,432 for which loans were
sanctioned prior to March 31, 1912, would be maintained at an annual
loss of £107 ($521), while the 1,549 for which loans were sanctioned
in the following year would involve an annual loss of £270 ($1,314).
Of course after the loans had been repaid the houses would presum­
ably become profitable investments.
HOUSING WORK OF LIVERPOOL.

The figures in the tables on pages 299, 309, and 310 do not show the
full amount of work done, as not infrequently cities have worked under
local acts, in which cases the Local Government Board has no data
concerning their activities. Up to 1907, for instance, the loans sanc­
tioned to Liverpool by the Local Government Board amounted to
only £178,981 ($871,011), but by that time Liverpool had spent in
housing schemes approximately £920,000 ($4,477,180). Other cities
show almost as great differences between the amounts really spent
and the loans sanctioned by the Local Government Board, while in
the case of London none of its expenditures for housing appear in
the board's data.
The work done in Liverpool is of special interest from its extent,
the early date at which it began, the continuous adherence to a welldefined plan for ridding the city of insanitary courts and houses, and
since 1896 the definite effort to rehouse the identical people who are
dispossessed by clearances, instead of merely providing for an equal
number.
Liverpool began its housing work early, prompted thereto by the
very insanitary and overcrowded character of the courts which
abounded in the old city.
There still exist certain portions of the city in which you will find
houses so crowded together that 12 of them (six on each side of a
central yard 15 feet wide) would go into a space of 360 square yards.



312

B U L L E T IN

OF TH E BUREAU OF LABOR STATISTICS.

* * * These 12 houses afford accommodation to from 70 to 80
people and they are supplied with one standpipe for water common
to all, and two dry closets at one end of the courtyard, also common
to all, and otherwise they are without conveniences, water supply,
wash boilers, baths, yards, and so forth. In 1864 we had in Liver­
pool 22,000 of such insanitary houses consisting of the vilest slums
imaginable. They contained a population of over 100,000 people.1
As early as 1842 Liverpool had passed building regulations designed
to prevent the increase of such conditions, and in 1864 the sanitary
amendment act was passed to permit the abolition of existing evils.
Under its terms action might be taken as follows:
1. The medical officer of health may report to the city council that
certain houses are unfit for human habitation.
2. The council after approving the report must send it to the clerk
of the peace, and notice must be given to the owners of the properties
involved.
3. The report is then brought before the grand jury at quarter ses­
sions, who after hearing evidence and viewing the properties decide
whether or not the houses are to be destroyed. If they decide, as they
almost invariably do, that the houses are to be destroyed, the decision
is called a presentment.
The owners have a right of appeal to quarter sessions against a
decision of the grand jury, but this right does not seem to be exten­
sively exercised.
After the presentment has been made the. city has a right to take
the properties at a price fixed either by agreement with the owner or
by arbitration. The owner may retain the site if he chooses, but must
sell the house.
There are two marked advantages about procedure under this act:
The simplicity, dispatch, and cheapness of obtaining a presentment
by the grand jury and the fact that the corporation has the conduct
of the whole of the proceedings without the necessity of having to
apply to the Local Government Board for a provisional order. But
there are also twro disadvantages: The fact that the owner may retain
the site if he chooses, and the fact that no properties other than those
used for habitations can be acquired and of those only such as are iif
themselves insanitary.2
Under this act during the years 1865 to 1904 the medical officer of
health made some 18 presentments in respect to houses not fit for
human habitation, and in pursuance of these presentments approxi­
mately 6,300 houses w
rere demolished. In 1901 the act of 1890 was
first utilized and under its provisions 18 representations have been
1 Rehousing the dispossessed in

L i v e r p o o l, X m e

Congres International des Habitations a Bon Marche.

La Haye-Scheveningue, septembre, 1913. Rapports. Rotterdam [1913]. Part 1, p. 192.
2 Condensed from City of Liverpool Handbook compiled for the Congress of the Royal Institute of Public
Health, 1903, pp. 164,165.




313

G O V ERN M EN T AID TO H O U SIN G ---- GREAT B R IT A IN .

made concerning areas with a population of 9,748. The act of 1890
is free from the two drawbacks connected with the local act, since by
its terms owners may be compelled to sell sites as well as houses, and
land not occupied by insanitary buildings but needed for the harmo­
nious development of a scheme may be acquired. Since 1901 both
acts have been used freely, one or the other being chosen according to
its special advantages for dealing with a given case. The number of
houses dealt with from 1906 to 1912, inclusive, and the action taken
in regard to them are shown in the following table:
H OU SES D E A L T

W IT H

IN L IV E R P O O L U N D E R

Year.

Demol­
ished.

1900..............................................................................
1907..............................................................................
1908..............................................................................
1909..............................................................................
1910..............................................................................
1911..............................................................................
1912..............................................................................

851
238
83
295

Total...............................................................

1,902

221
135
79

LOCAL ACT A N D

Rendered
sanitary.

Closed.

A C T OF 1890.1

Condemned
but still
occupied.

Total.

161
152
129
78
69
47

147

1

228

58

380
336
193
2 682

456 !

59

3,370

637

1,159
400

10
8
7
45

220
1

11

1 Compiled from Report 011 the health of the City of Liverpool during 1912 by the medical officer of
health, p. 261.
2 Including 316 in schemes but still occupied.

It appears that the proportion of these houses demolished (56.44
per cent) is considerably larger than is the case in England as a
whole.1 This may be due partly to the exceedingly crowded and
insanitary character of many of the houses against which action is
taken, and in part to the extensive housing work undertaken by the
city. This, by furnishing tenements into which the dispossessed
may move, makes it possible for the authorities to act more freely
against unhealthful buildings than they can when the unhoused
have nowhere to go except into other insanitary dwellings, which
their coming will render as overcrowded as were the ones from which
they are driven.
The housing policy of Liverpool has undergone several alterations.
In 1869 the city put up a large building providing accommodation
for over 600 people, but that w soon occupied by the better-paid
~as
workingmen, and those unhoused by the operations of the city coun­
cil were not rehoused, In 1885 and in 1891 the city put up other
buildings, which at the usual allowance of two persons to a room
would provide for some 1,500 persons, but these like the earlier
building were soon filled by the better-paid workers. In an effort to
provide for the poorer classes up to 1896 the city sold the land it
cleared to builders on condition that they put up houses for the




1 See p. 301.

314

B U L L E T IN

OF TH E BU REAU OF LABOR STATISTICS.

working classes. The land was sold at much less than it cost the
city, but the houses were still filled with the relatively better-off
working classes.
By 1896 the corporation had had the experience of making clear­
ances without building, of itself building, of parting with land for
others to build upon it, of patching up property and neighborhoods,
with the result that for 32 years the persons affected were not
rehoused.
At last serious protests were made. Between 1864 and 1896
40,000 people had been uprooted. They were driven into under­
ground cellars, insanitary houses, sublet houses, the death rate re­
mained tremendously high, being in some places 60 per thousand, in
some 50 per thousand, and in most insanitary neighborhoods 40 per
thousand * * * and while other slums were being created, cer­
tain neighborhoods were being destroyed.1
Beginning with 1896 the city resolved to build its own tenements
and to let them only to those dispossessed by its housing operations,
or, if there should be more room than these needed, to persons living
in insanitary and overcrowded dwellings similar to those destroyed.
The earlier buildings had been huge blocks; those built under the
later plan were very largely three-family tenements, though cottage
flats have also found favor. In 1913 the city possessed 2,731 dwell­
ings containing 6,833 rooms, and let at a gross annual rent of £27,397
($133,328). The dwellings were divided as to number of rooms as
follows:
Containing
Containing
Containing
Containing

1 room.............................................................................................
193
2 rooms........................................................................................... 1, 257
3 rooms...........................................................................................
998
4 rooms...........................................................................................
283

Total.......................................................................................................... 2, 731

The one-room dwellings are not only few, but are relatively fewer
in the new than in the early buildings. There are none in the build­
ings put up since 1895.
The weekly rents vary somewhat according to the type and loca­
tion of the building. The following table shows the variations and
the number of dwellings of each size available:
R A N G E OF W E E K L Y R E N T S IN L I V E R P O O L ’S M U N IC IP A L H O U S E S .

Block buildings.

Number.

One-room dwellings...................................................
Two-room dwellings..................................................
Tliree-room dwellings...............................................
F our-room dwellings.................................................

66
311
146
15

Rent per week.

43 to 67 cents..........
61 cents to $ 1 .2 8 ..,
85 cents to .$1.40...
$1.16 to $1.34...........

Tenements, cottage flats,
etc.

Number.

127
946
852

R ent per week.

43 to 67 cents.
55 to 97 cents.
85 cents to $1.22.
$1.10 to $1.70.

1 Rehousing the dispossessed in Liverpool, X m Congres. International des Habitations a, Bon Marche.
e
La Ilaye-Sclieveningue, septembre, 1913. Rapports. Rotterdam [1913]. Part 1 , p. 194.




G O V E R N M E N T AID TO H O U SIN G ---- GREAT B R IT A IN .

315

These rents, it will be noticed, are much smaller than those charged
by the London County Council for their dwellings. They are about what
the rehoused tenants w^ere paying for their former insanitary rooms.
Liverpool definitely gave up all idea of an economic rent, believing
that the workers for whom these dwellings are planned are unable to
pay rents that will give a fair return on the capital invested.
It is difficult to obtain data showing the exact status financially
of Liverpool's housing enterprises.
The following table, published in 1907, gives the capital outlay,
rents, etc., for the buildings then existing, averaged in each case for
the number of years the building had been operated.
F I N A N C IA L D A T A C O N C E R N IN G L IVER PO O L'S D W E L L I N G S O N S L U M S IT E S .
[Source: Housing U p to Date, W . Thompson, p. 63. London, 1907. In most cases land is charged to
capital outlay only at housing valuation.]

Working>expenses.
•

Council and period of accounts
averaged.

Capital
outlay.

Rents
received.

Rates,
taxes,
water,
and in­
surance.

St. Martin’s cottages, 36 years... $87,246.61 $5,474.81 $1,012.23
Victoria Square, 19 years............. 331.296.72 14,570.30 2 , 691.17
78,671.84 4,185.19
686.18
Juvenal Street, 15 years................
506.12
Arley Street, 8 years......................
36,902.67 2,199.66
Gildart’s Gardens, 8 years........... 182,776.01 8,136.79 1,703.28
Dryden Street, 4 years................... 146,948.83 6,574.64
1,313.96
K empston Street, 3 years............. 138,656.32 3,635.28
759.17
953.83
Kew Street, 3 years......................... 108,581.35 2,885.83
Adlington Street, 2 years............. 234,808.63 12,326.84 2,486.78
Stanhope Cottages, 1 year........
501.25'
55,517.03 2,292.12
Mill Street, 1 year...........................
57,891.88 1,552.41
481.78
Hornby Street, 1 year................... 145,727.34 8,769.43
1,211.76

Repairs,
lighting,
and
main­
tenance.

$2,832.30
3,727.74
1,318.82
301.72
1,484.28
1,761.67
671.58
764.04
1,703.28
476.92
423.39
686.18

Superin­
tendent
and
sundries.

Total.

$287.12 $4,131.65
618.05 7 , 036.96
184.93 2,189.93
890.57
82.73
418.52 3,606.08
476.92 3 ,5o2. ()0
146.00 1 , 576.75
121.66 1,839.53
520.72 4, 710.78
111.93
1,090.10
68.13
973.30
321.19 2,219.13

Net
return
per
cent,
on out­
lay.^

3.09
2.38
3.08
4.12
2.57

2 .2 1
1.56
1.29
3.13
2.16

1.0 0
2.16

1 The percentages and detailed figures refer to different periods.

Apart from the low rents which must be charged in order to meet
the needs of the class for whom these houses are designed, there are
two factors which increase the difficulty of making a good financial
showing for the enterprises. The land situated in the crowded por­
tions of the city must be bought at figures far in excess of what it is
worth as a site for workmen’s dwellings, and it has usually been
necessary to borrow the money required at rather a high rate of
interest. Consequently the net return on outlay would have to be
considerably larger than shown above to make the venture a success
if regarded solely from the economic point of view. Nevertheless,
the returns are better than they seem at first glance. The working
expenses include careful repairs, the buildings being kept up so well
that deterioration as a factor in the problem is almost negligible; and
the net returns, while not large in themselves, might not improperly
be regarded as investments rather than as returns upon investments.
For the buildings are decidedly more than self-supporting, so far




316

B U L L E T IN

OF TH E BUREAU OF LABOR STATISTICS.

as current expenses g o / and are bringing in something toward the
sinking fund by which eventually their whole cost will be paid off.
Apart from the direct returns in the way of rents, the building
schemes save the c i t y a considerable amount every year. Most of
the insanitary areas bought up and rebuilt consisted of the insanitary
courts already described.
By the removal of these insanitary courts the cost of cleaning,
washing, and scavenging them has been obviated and from a very
careful calculation it is estimated that at the present time there is a
saving of £2,200 [$10,706.30] per annum in respect to cleansing and
£9,000 [$43,798.50] per annum for the sanitary administration.3
The success of LiverpooFs policy of reserving its buildings for the
use of the dispossessed has been marked. Liverpool is almost the
only English city which rehouses the poorest and least desirable class
of tenants to be found within its limits. The class provided for are
mostly unskilled and frequently casual laborers.
In 1907 a census of the occupations of 1,661 persons in the dwellings
showed the following principal classes of workers:3
Laborers—
General...........
Dock................
M ill...................
Builders..........
Foundry.......... ......
Ship..................
Carters.....................
Charwomen............
Firemen—
Marine............. . . . .
F actory...........

328]
251
03
>
15
14
4

675

120
103
73’
j.
20.

93

Porters.................................
Hawkers..............................
Sailors..................................
Scavengers..........................
Cotton pickers....................
Painters...............................
Bag repairers.....................
Warehouse women...........
Coal heavers.....................
Cigar makers......................
Widows, etc.......................

80
64
45
40
17
15
15
11
11
11
11
50

In 1905 the deputy surveyor of the city of Liverpool published a
statement that the average earnings of the tenants did not exceed
15s. ($3.65) a week. Naturally with such earnings and in such
houses as were formerly open to them they became, if they were not
to begin with, slum dwellers in the most objectionable sense of the
term. In the new buildings, under the supervision exercised by the
corporation, their characters seem to be changing to fit their environ­
ment.
The improving conditions in health and social circumstances of the
persons rehoused becomes increasingly apparent year by year. It
would, of course, be idle to expect that the occupants of insanitary
1 In 1908, the latest year for which such data are available, the total receipts from the city’s dwellings were
in round numbers, £18,975 ($92,342); total expenditures in connection with them, £9,174 ($44,645). (City
of Liverpool, Englaud, Accounts of the Treasurer, 1908, pp. 99-103.)
2 Health Department, Report on the Health of the City of Liverpool during the year 1912 by the medical
officer of health, p. 270.
s Housing U p to Date, W . Thompson, p. 117. London, 1907.




G O V E R N M E N T AID TO H O U SIN G ---- GREAT B R IT A IN .

317

areas who arc transferred to a sanitary area should immediately for­
sake all the old habits which a lifetime of insanitation had engendered.
As a matter of fact, many of them still need and still look to the
advice and friendly guidance of the sanitary staff.1
The following quotation from the report of the Local Government
Board for 1912 gives some data showing the improvement which has
taken place in the areas made sanitary.2
The first two unhealthy areas to be dealt with by Liverpool under
the housing of the working classes act, 1890, were scheduled in 1902,
this being the first scheme in the city under that act. When these
areas were condemned the death rate within them ranged from 40 to
G per thousand and the incidence of phthisis resulted in an annual
O
death rate of (approximately) 4 per thousand.
The number of dwellings provided by the corporation to the end
of 1912 was 2,727 with a population of 10,099, and of these dwellings
2,171 are reserved for persons who have been dispossessed in con­
nection with the removal of insanitary property or the abatement of
overcrowding. Before any of these latter dwellings are let, the
housing committee is satisfied that the applicant formerly resided in
an insanitary house or cellar, or was dispossessed from an overcrowded
sublet house.
The medical officer of health reports that there has been a marked
improvement in the habits and cleanliness of the people who formerly
inhabited these dwellings, as indicated by the external and internal
appearance of the houses. The improvement is particularly notice­
able amongst the children, and at night the districts are quiet and
orderly.
The following figures show the number of persons arrested who
gave addresses in areas where the corporation houses have now been
erected:
NUM BER

O F A R R E S T S IN S P E C IF IE D A R E A S B E F O R E A N D
HOUSES W E R E E R E CT E D .

A F T E R C O R P O R A T IO N

Area.

Adlington Street....................
D o .........................................
Burlington Street...................
D o.........................................
Hornby Street.........................
D o .........................................

Year.

!
'

1894
1912
1905
1912
1901
1912

Persons
arrested.

202
4
46
14
170
52

The head constable points out that the comparative figures of of­
fenses committed by persons living in the areas are of real value
because the housing department takes pains to secure as tenants
those who have been dispossessed through its operations. It appears
that 79 per cent and 94 per cent respectively of the persons who resided
in the insanitary property in the Northumberland Street and Bevington Street areas before clearance by the corporation have been
rehoused in corporation dwellings.
1 Health Department, Report on the Health of the City of Liverpool during 1912, by the medical officer
of health, p. xvi.
2 Forty-second Annual Report of the Local Government Board, l(-f12-13, Pt. II, Housing and Town
Planning, pp. xxii, xxiii.




318

B U L L E T IN OF TH E BUREAU OF LABOR STATISTICS.

The medical officer of health points out that under the new con­
ditions the general death rate has-fallen by more than one-half, and
the average annual death rate from phthisis in the corporation tene­
ments during the four years 1909 to 1912 fell to 1.9 per thousand.
During the year 1911, out of 2,601 cases of phthisis in the city which
have been under observation at their own homes only 33 were found
to reside in dwellings erected by the housing committee.
In connection with the suggestion which has sometimes been made
that the removal of slum areas results in an increase of subletting and
overcrowding elsewhere, the following figures as to sublet houses,
furnished by the medical officer of health, are important : In 1904
there were 22,488 such houses in the city, and in 1912 there were only
16,475.
HOUSING W ORK OF BIRMINGHAM.

Birmingham is another city in which the loans sanctioned by the
Local Government Board fail to give an adequate idea of the work done
under the various housing acts. In this city the provision of houses
has been a far less important feature than the reconstruction of slum
areas. Up to 1875 the central portion of Birmingham was overcrowded, unplanned, and insanitary.
Some street improvements in the heart of the town had been
effected from year to year, and the ingress of railroads, particularly,
had broken through the huddled masses of old houses crowded
together in narrow streets, lanes, and courts. But nothing radical
had been accomplished, and the great town of Birmingham, having
by that time nearly 400,000 people, had grown up around a nucleus
surviving from old village days, unwholesome, mean, and altogether
disgraceful.1
This nucleus was in 1875 made the subject of an improvement or
clearance scheme under the artisans7 and laborers’ dwellings act of
that year. The scheme dealt with an area of 93 acres on which
from 15,000 to 20,000 people were living. The houses were old and
dilapidated and the death rate of the district was very high, in some
streets being several times as great as in the more favored parts of
the city. The area was laid out with new streets and open spaces.
The worst dwellings were taken down and the remainder put into
sanitary condition. The greater portion of the land acquired was let
out on building leases for 75 years, the buildings being largely shops.
The gross outlay amounted * * * to about $8,000,000. It
was not expected that after creating new streets and rearranging the
district, the city could wholly recoup itself by sales or leases of build­
ing sites. * * * As revenue accounts now stand, the improve­
ment scheme costs annually for interest, sinking fund, and various
charges about $400,000 and receives in rentals about $300,000.3
The sinking fund is expected to pay off the whole amount borrowed
for this scheme within 50 j-ears from the date of the loan. For 25
i Municipal Government in Great Britain, Shaw, p. 179.




2 Idem, p. 1S1.

G O V E E X M E X T AID TO HOUSING-

319

IIEEAT BEIT AXIS'.

years thereafter the corporation will receive the rents from the leased
land, and at the end of that time, when the leases expire, all the im­
provements will become the property of the city without compensa­
tion of any kind to the retiring tenants. As one of the finest and most
important business streets in the city is embraced in this area, the
return to the city on its investment will eventually be enormous.
Some 653 workmen’s houses had been demolished in this scheme.
In 1884 a committee of inquiry was appointed to see whether this
had led to any scarcity of housing accommodation in the city. They
brought in a report stating that there was no scarcity of workingclass houses, that the existing houses were, generally speaking, in
a fairly sanitary condition, and that there was no great amount of
overcrowding.1

The corporation did not seem to be wholly satisfied by the findings
of this committee, for they at once proceeded to build two blocks of
cottage flats, containing 103 dwellings. A few years later an in­
sanitary area of 4,030 yards, with 65 dwelling houses and a few work­
shops, was condemned, bought up by the corporation, and the build­
ings demolished under Part I of the act of 1890. On this area 61
cottages w^ere erected.
No attempt was made to rehouse the dispossessed tenants, and
indeed the rents charged in all the Birmingham cottages made it
practically certain that they would be used by a better-paid class of
workmen than those who had been unhoused. The following table
gives some data of interest concerning the municipal cottages and
cottage flats:
M U N IC IP A L D W E L L I N G S IN

B IR M IN G H A M .

[Source: Housing U p to Date, W . Thompson, pp. 50 and 54.

N um ­
ber of
dwell­
ings.

Milk Street cottage flats........

"RvOfir Street cottages
...
Lawrence Street cottages. . .
i B for building, S for site.

24
28
5
4

22
81

Rooms
in each.

2
3
3
4
5
5

W eekly rent.

Cost of
building.

73 cants............. 2 $49,152
$1 . 10 .
$1.34.
$1.22 to $2 . 68.
3 880
$1.34 to $ 1.40..
$1.22 to $ 1.52..
3 852

2 Including roads.

London, 1907.]

Area of
site
(square
yards).

Cost of
site,
roads,
etc.

4,030

$4,901

2,100
7,006

Cost per
room .1

B $301. 72
S 29.20
B
B

330.92
184.93
170.33

3 Cost of building each cottage.

The Milk Street buildings, which were the last to be put up, cost
considerably more than the earlier buildings per room, but are
better built, and each dwelling has its own separate conveniences of
every kind.
They are of red brick with slate roofs and are arranged in four
terraces, consisting of 24 containing living rooms 13 by 14 feet, and
i A Housing Policy, J. S. Nettlefold, p. 11.




Birmingham, 1905.

320

B U L L E T IN

OF TH E BUREAU OF LABOR STATISTICS.

bedrooms 12-b by 9 feet; 28 containing living rooms 13 feet 4 inches
by 14 feet, bedrooms 14 by 8J feet and bedrooms 9 by 9 feet. The
4 and 5 room cottages arc in separate groups.

The outlay, running expenses, and returns from the Birmingham
houses averaged for a period of three years were as follows:
F IN A N C IA L D A T A C O N C E R N IN G B IR M I N G H A M ’S D W E L L I N G S ON SL U M SIT E S.
[Source: Housing Up to Date, W . Thompson, p. 03.

Capital
outlay.

Ryder Street___
Lawrence Street
Milk Street..........

London, 1907.]

Rents
received.

$24,333
85,164
78,351

$1,649.74
5,937.13
3,041.56

Total
working
expenses.

Net re­
turn per
cent on
outlay.

$593.71
3,474 .68
1,109.56

4.35
4 . 6G
2.46

In calculating these returns the land was written down to its hous­
ing value, which was much below the price paid for it.
The policy of municipal housing has never been very popular in
Birmingham, a strong party contending that the provision of houses
should be left to private enterprise and that the city can best serve
all classes by using its undoubted powers to compel private owr
ners
to make and keep their houses sanitary. About 1901 this party
gained the upper hand in the city council, a housing committee w-as
appointed to take charge of all matters pertaining to housing, and
since then the city’s definite policy has been not to buy up and clear
off slum areas, but to proceed against such areas house by house,
under Part II of the act of 1890. The following table show's the
number of houses dealt with under this policy since 1902:
A C T IO N T A K E N

B Y H O U S IN G C O M M IT T E E O F B IR M IN G H A M IN I M P R O V IN G
A R E A S , 1903 TO 1912.

[Source: City of Birmingham.

Y ear.

190
190
190
190
190
190
190
191
191
191

3
4
5
6
7
8
9
0
1
2

.

Total

SL U M

Report of the medical officer of health for the year 1912, p. 74.]

Repre­
sented.

Rendered j
habitable, i

Demolished.

Closing
orders.

Demolition
notices.

300

34
127
230
117
422
257
216
291
163
349

65
233
327
199
679
184
220
173
360
727

51
36
61
143
157
164
54
41
71
209

3,013

2,206

3,167

987

304
1,119
793
596
806
650
521
609
278
926

155
242
330
370
262
494
381
277

6,602

202

This table represents only action taken against houses so insanitary
that they may be considered unfit for habitation. In addition a
great deal has been done under local health acts in the wray of com-




G O V E R N M E N T AID TO H O U SIN G — GREAT B R IT A IN .

321

polling repairs before a house has reached such an extreme stage of
unhealthfulness. Thus in 1911 notices were served on the owners
of 2,252 houses in which sanitary defects were found, requiring them
to repair these. Also, in connection with the houses against which
representations are made, the council frequently undertakes work
which does not appear in the above table.
Thirty-three courts have been opened to their respective streets by
the removal of 60 houses, at a cost to the corporation of £1,400
[$6,813], and at a cost to the owners, including repairs done to houses
in the courts, of £15,260 [$74,263], showing an expenditure by the
owners of over £10 [$49] for every £1 [$4.87] spent by the corpora­
tion. These figures apply exclusively to courts that have been
opened out by the removal of obstructive buildings.1
Along with this activity there has been a steady effort to secure
the erection of a large number of cheap houses in the outskirts so as
to draw the population outward and prevent the increase of rents
with its accompaniment of overcrowding in the center of the city.
In 1900 the council bought 17 acres of land at Bordsley Green, 3
miles from the heart of the city, with the intention of building 500
cottages for working people on it. Before this scheme could be car­
ried out, the opposition to municipal building became effective in
the council, and for a number of years the land lay idle. Finally,
in 1907, it was leased to the Ideal Benefit Society to be used for the
erection of houses, which must be useparate, self-contained lodging
houses, not being flats or other dwelling houses adapted for occupa­
tion by more than one family within the meaning of the housing of
the working classes act, and suitable for habitation by persons of the
working or artisan class.” The council reserves to itself large
powers of supervision, and makes careful provision that the houses
shall be sanitary, well kept, and not too expensive, and that the area
shall not be overbuilt.2 As yet data concerning the working out of
this scheme are not available.
The town planning act of 1909 gave cities greatly increased
powers in the way of controlling the building up of new suburbs.
Birmingham has already undertaken large and expensive schemes of
this kind, and it seems probable that henceforth the city will put
much more energy into the prevention of future slums than into the
abolition of those developed in the past.
H O U SIN G W O R K OF M A N C H E S T E R .

Before the passing of the act of 1890 Manchester dealt with objec­
tionable housing conditions only under a local act which permitted
the city to close houses unfit for habitation but not to replace them.
1 A Housing Policy, J. S. Nettlefold, p. 45. Birmingham, 1005.
2 Practical Housing, J. S. Nettlefold, Appendix F . Letchworth, 19C8.
GG17 1 ° — B u ll. 1 5 8 — 15 ------- 2 1




322

B U L L E T IN OF T H E BUREAU OF LABOR STATISTICS.

When this act was first applied it was an easy matter for tenants thus
dispossessed to find accomodation elsewhere, but in time the closing
of so many houses, combined with the natural increase of the city,
brought about serious overcrowding. The city authorities, therefore,
promptly availed themselves of the powers given under the act of
1890, and from that time have carried on their work under the local
r
or the general act or under both together as has seemed most effective.
Before 1890, under the local act, 6,890 houses had been closed. Since
that date work of this kind has been done as follows
N U M B E R O F H O U S E S C E R T I F I E D T O A N D D E A L T W I T H B Y T H E H O U S IN G , E T C .,
SU B C O M M IT T E E IN E A C H Y E A R , 1890 TO 1911.

Year.

Number
certified
and or­
dered to
be closed.

202
358
720
675
904
930
782
441
506
859
399
132
545
545
717
576
558
J 716
,
1,239
!, 188
,833
f, 326

1890.
1891.
1892.
1893.
1894.
1895.
1896.
1897.
1898.
1899.
1900.
1901.
1902.
1903.
1904.
1905.
1906.
1907.
1908.
1909.
1910.
1911.
Total.
a

21,151

Number of
houses
Number
added to­
gether or demolished.
to other
houses.

129
208
206
208
227
162

68
99
189
80
10
152

112
127
80
98
217
167
91
95
14

2 , 818

82
137
332
218
546
454
319
198
185
364
149
44
126
165
204
176

Number
repaired
and re­
opened.

37
72
153
166

122
222

512
306
134
87
26

274
157
209
219
133
74
199
240
339
289
347
1,498
1,364
1,834
1,093
395

4,866

9,436

102

Number
closed.

Number
not closed.

Number
which
stand
adjourned.

4

20
27
85
28
27
27
18
13
87
37
4

68
28
47
31

11
477
224
98
234
92

12
178
23
311
1,779

8
13
20

a 2,303

41

In 1,471 of these the owners arranged to carry out alterations to meet the requirements of the committee.

The great advantage of this act was that the cost of abolishing
evil conditions fell mainly upon the owner of the property. Repairs
and alterations were made entirely at his expense. “ But in some
cases it was necessary before a group of houses could be made fit for
habitation to demolish one in three, the site being left as an open
space, or utilized as a private yard for the adjoining houses. Where
this occurred the corporation made a grant of £15 ($73) in respect to’
each house demolished/’2 In 1902 it was calculated that the amount
thus spent by the corporation up to date did not exceed in round
numbers £25,000 ($121,663).
In order to meet the need for more houses and to do away with a
large slum area, Manchester undertook in 1891 a large clearance
1 Report on the Health of the City of Manchester, 1911, by the medical officer of health, p. 85.
2 Municipal Socialism, G. E . W right, p. 77. London, 1902.




323

G O V E R N M E N T AID TO H O U SIN G ---- GREAT B R IT A IN .

scheme under Part I of the act of 1890, the area involved being about
5 acres on Oldham Road and Pollard Street. Large blocks, contain­
ing 372 dwellings, were erected on part of this area and cottages on
another part, the rest being left as an open space. The total cost of
the scheme was £285,000 ($1,386,953). Within a very few years a
striking reduction of the mortality rate w observed in the cleared
~as
area, and a smaller reduction in the rates of the two adjoining dis­
tricts. The following figures show the extent of the reduction:
R E D U C T I O N O F D E A T H R A T E S R E S U L T I N G F R O M I M P R O V E M E N T OF SL U M A R E A S
IN M A N C H E S T E R .
[Source: Housing Handbook, W . Thompson, p. 48.

London, 1903.]

Oldham
Road
area.

Death rate, 1887-8-9.................................................................
Death rate, 1896-7-8.................................................................
Reduction per cent...................................................................

Pollard
Street
area.

Adjoin­
ing dis­
trict 6.

Adj oining dis­
trict 7.

49.2
29.7
39.0

51.4
32.7
36.0

40.8
38.6
5.0

21.0

49.2
39.0

W hole of
Ancoats.

33.4
28.6
14.0

The high death rates prevailing in these areas before the clearance
are as striking as the reduction which followed it.
Almost simultaneously with this large scheme, the city proceeded
against several smaller areas under Part II of the act of 1890. A total
area of about 3^ acres was acquired. Part of the land was cleared
but some of the dwellings were left standing and put into good repair
either by their owners or the city. Tenements containing 150 dwell­
ings were put up. Nine hundred and seventeen persons were dis­
possessed and housing was provided for 1,123.
After this for some years Manchester undertook no housing work
except the procedure against insanitary houses under the local health
act. But in 1901 the council purchased 238 acres on the city bound­
ary, known as the Blackley estate, at a cost of £35,643 ($173,457).
On this it was planned to erect 203 cottages, 150 of which would be
required to rehouse the tenants of houses which were to be tom down
in the course of making a new street and widening two old ones. Up
to 1907 only these required dwellings had been erected.
Manchester has built successively blocks, tenements, and cottages.
The following table gives some comparative data as to the number,
relative cost, and rents of the buildings of each kind.




324

B U L L E T IN OF TH E BUREAU OF LABOR STATISTICS.

B L O C K D W E L L IN G S , T E N E M E N T

D W E L L IN G S , A N D C O TTA G E S E R E C T E D B Y M A N ­
CHESTER.

[Compiled from Housing U p to Date, W . Thompson, pp. 44, 47, 48, 57.

Num ­
ber.

Location and date of erection.

Rooms
Rent per week.
in each.

London, 1907.1

Cost of
building.

Area of
site
(square
yards).

Cost of
site.

Cost per
room .1

$27,179

\ 3 47 4,391

B $564.51
S
53.53

/ 2 8,229
\ 3 46,456

B 476.92
S 29.20

BLOCK DWELLIN G S.

(1894) Oldham Road (No. 2 /
\
Block).

48
237

1
2

61 to 73 cen ts..
85 cents to $1.22 |$294,798

7,779

/
\

5
130

1
2

61 cents.............
| 127,600
73 to 97 cents..

3,383

P

618.04

506.12
TEN E M EN T DWELLIN GS.

2

I

36
39
3

/
\

36
36

2

f

Sanitary Street............................. •
J
t

16
32
16

1
2

$1 10

3

$1.40...................

/
\

32
32

2

$1 .1 0 ...................
}
$1.30...................

(1899) Pott
story).

Street

(three

f
\

3
4

$1.03 to $1.10...
$1.22 to $1.34... |
$1.46 to $1.52..

87,310

3,914

/
9,524
\ 3 71,153

B 437.99
S 43.80

$1 .1 0 ...................
j
$1.40 to $1.46...

72,029

4,

554

/ 11,081
\ 3 73,684

B 399. 05
S 58.40

481.79
Chester Street (two story)........

3

457. 45
73 cents.............

4 404 )
4 779 }

4 , 880

4 1 ,2 1 2

B 403.92
S 87.60

/ 11,874
\3133,761

491. 52
T
?

*RAorl

3

58,306

/ B 364.99
5,961
\ S 38.93

2,444

403.92
COTTAGES.

Miles Platting...............................

60

43

$1.34...................

/

13,193

\

5 6,906

B 267.66
S 80.17

r
7,081
2,910
\ 5 1,582

B 316.32
S 77.86

4 1,071

7,011

4 1,591

352.83
(Oldham Road, area No. 1)
George Leigh Cottages.

}

1
8

5

$1.89...................

3 57,629
Blackley estate.............................

f
I

94
^6

4
5

$1.54 to $1,70...
| 4 1,163
$1.89...................

1 B, building; S, site.
2 Nominal housing valuation.
3 Actual cost of land.

394.18
f

8f acres.

^ 1,976

\
{

B 233. 59
to
291.99

4 Cost of each.
5 Cost of roads.

It will be noticed that the block buildings, which were put up at
the very beginning of Manchester's house-building work, cost dis­
tinctly more per room than either tenements or cottages, and that this
extra cost was wholly a matter of building, for in several cases the
cost per room of sites was greater for tenements and cottages than
for blocks. Nevertheless, the block dwellings are less attractive than
those in the smaller buildings, have less privacy, rent at a lower
figure, and naturally bring in smaller returns. This last fact appears
very clearly in the following table, averaged through a period of years.




G O V ERN M EN T AID TO H O U SIN G ---- GREAT B R IT A IN .

325

F IN A N C IA L D A T A C O R C E R N IN G M A N C H E S T E R ’ S D W E L L I N G S ON S L U M S IT E S .
[Source: Housing U p to Date, W . Thompson, p. 63.

London, 1907.]

W orking expenses.

Council and period of accounts
averaged.

Capital
outlay.

Rents
received.

Rates,
taxes,
water,
and in­
surance.

Repairs,
light­
ing, and
main­
tenance.

Superin­
tendent
and
sundries.

Total.

Net
return
per
cent on
outlay.

BLOCK DW ELLINGS.

Oldham Road ( 2 ), 10 years
$321,977.37
Pollard Street, 10 years............ 135,828. 88

$15,032.62 -S3,499.01 $4,647.51
4,589.11 1,357. 75 2,219.12

$919.77 $9,066.29
856.50 4,433.37

1.85

.1 2

TEN E M EN T DW ELLINGS.

Chester Street, 6 years..............
Pott Street, 6 years....................

82,122.19
96,838.48

4,413.92
4,399.32

1,163.09
1,148. 49

968. 43
929.50

107.06
97.33

2,238.58
2,175.32

2.64
2. 29

156,574.77

8,725.63

1,557.28

1,289.62

126.53

2,973. 43

3.67

COTTAGES.

Oldham Road (1), 6 years------

This table, unfortunately, shows the data for only one of the
groups of cottages— Oldham Road (1)— as the others had not been
occupied long enough when this table was compiled to show average
results. The difference between the tenements and the block build­
ings is striking and shows one of the reasons why the block building
is falling into disfavor among municipal builders.
These three cities are fairly typical of the different developments
of the housing movement in England. Liverpool, concluding that
there is a class of workers for whom private enterprise can not be
expected to provide suitable dwellings and keep them in proper repair,
has definitely undertaken to help in this direction. It will make its
buildings self-supporting and even profitable, if possible, but its
primary aim is to provide healthful and decent dwellings for the
poorest class of dispossessed slum dwellers and to try to bring the
occupants up to the standard of the houses. Birmingham has as
definitely decided that within its limits, at least, private enterprise
can be encouraged to provide whatever housing is needed. The city,
therefore, has done very little in the way of building working-class
dwellings, but has put its greatest effort into forcing private owners
to put the slum houses into good condition. Manchester has occupied
a middle ground, providing houses but not so extensively as Liver­
pool, and proceeding against the insanitary houses of private owners,
but not limiting its work as closely to this as Birmingham, after the
“ Birmingham policy” was once adopted, has done. In all three
cities, town planning work is receiving much attention, and while the
effort to improve or abolish existing slums is not slackening, it seems
probable that in the future the main emphasis will be placed on pre­
ventive work.




326

BU L LE TIN

OF TH E BUREAU OF LABOR STATISTICS.

HOUSING W ORK OF RURAL AUTHORITIES.

The procedure imposed by the act of 1890 upon rural authorities
who wished to provide housing w so difficult and complicated that at
ras
first little w done. The table on page 309 shows that up to 1900 only
ras
two loans had been sanctioned to rural authorities for this purpose.
The first of these loans was sanctioned, after two years’ effort on the
part of the Laborers7 Association of Ixw~orth, for the purpose of
building eight cottages. The cost of building was £1,700 ($8,273),
which was borrowed for 30 }rears at 3J per cent.
The loan charges amounted to about £ 10 10s. [$51.10] a year for each
cottage. The cottages are let for £5 5s. [$25.55] a year, so that there is
an annual deficit on loan charges of at least £5 5s. [$25.55] per cottage
per annum. If the money had been lent by the Public Works Loan
Commissioners at the market rate of interest (say 2 f per cent) for 75
years and the rents fixed at 2s. 6d. [61 cents] per week the enterprise
would have been a financial success.1
The borrowers to whom the second loan was sanctioned experi­
enced to the full the difficulties imposed by the act as it then stood.
They realized that the agricultural laborers could not pay more than
2s. 6d. (61 cents) or at most 3s. (73 cents) a week for rent, and that
they could not put up cottages and let them at that rate with any
hope of making the enterprise self-sustaining. They, therefore,
decided to build for better-paid workmen, planning for a rent of 5s.
($1.22) a week, in the hope that workmen who could afford this would
move in from poorer cottages and leave the latter to the agricultural
laborers. The effort to provide such cottages began in 1895, but the
necessary loan (£1,800 [$8,760]) was not sanctioned until 1899. The
loan was secured from the Public Works Loan Commissioners for 40
3rears at 3| per cent. Only six cottages were built, but these w^ere let
at once at rates that provided for payment of interest and repayment
of principal, with a margin of £3 10s. 6d. ($17.15) for repairs. In
1903 the local authorities put up eight more cottages, borrowing
£1,850 ($9,003) from the Public Works Loan Fund. These are let
at from 4s. to 4s. 9d. (97 cents to $1.16) per week. The total loan
of £3,650 ($17,763) had in 1913 been reduced by about one-fourth.
In 1900 the act of 1890 was amended, making the procedure much
simpler for rural authorities who washed to take action under Part
r
III. Notwithstanding this, up to March 31, 1907, only six rural
authorities had obtained sanctions for loans for the first time in the
year, and the total amount sanctioned w
ras only £11,800 ($57,425).
For four years more very little was done; but in 1912 and 1913 there
was marked activity along these lines. The loans sanctioned in the
year ending March 31, 1913, were more than twice as large as those of
any preceding year, and the loans sanctioned during the two years




i Housing Handbook, W . Thompson, p. 134.

London, 1903.

G O V E R N M E N T AID TO H O U SIN G ---- GREAT B R IT A IN .

327

1911-1913 formed over three-fifths (64.7 per cent) of the whole
amount sanctioned from 1891 to 1913, inclusive. Moreover, of 37
different rural authorities to whom loans have been sanctioned, 29
obtained the sanction for the first time in the two-year period
ending March 31, 1913.
The loans sanctioned to the rural authorities in England and Wales
were to provide a total of 470 houses or cottages. Of these, 231
would, according to the best estimates which could be made of
expenditures and returns, have to be carried on at a loss, 133 would
show a gaii*, while 106 would show neither loss nor gain.1 The
annual loss on the 139 of these houses for which loans were sanctioned
up to March 31, 1912, was estimated at £25 ($122), and on the 331
for which the loans were sanctioned during the next year at £175
($852). It must be remembered, however, that the word “ loss”
here is of questionable propriety, since the community as a whole is
acquiring property which might reasonably be regarded as more than
balancing these annual deficits. A private person buying a house and
renting it out for something less than the sum he annually pays
toward its purchase does not enter the difference between his net
rents and his annual payments as a loss, and it is not quite apparent
why the community should do so.
In spite of the increased activity shown by the rural authorities
during the years 1911 to 1913 the reports of the medical officers of
health still show that in many districts the provision of houses is in­
sufficient or is not proceeding at a sufficiently rapid rate. The Local
Government Board is endeavoring to meet this situation by the
system of inspections and reports already referred to and by the ex­
ercise of its power to order the local authorities to take action when
complaint is made against them and the board finds upon investiga­
tion that the complaint is justified.
GOVERNMENT AID TO HOUSING W ORK OF SOCIETIES,
PRIVATE PERSONS, ETC.

The act of 1890 specifically empowered the Public Works Loan
Board to advance on loan to certain companies, public utility societies,
or private persons “ such money as may be required for the purpose
of constructing or improving or of facilitating or encouraging the
construction or improvement of dwellings for the working classes.” 2
The reports of the Public Works Loan Board show that since 1890
they have advanced, under the provisions referred to in England and
Wales, the following sums.
1 Computed from data given in Forty-second Annual Report of the Local Government Board, 1912-13,
P t. II, Housing and Town Planning, pp. 14-25.
2 The earlier acts had authorized such loans under rather severe conditions. Previous to 1890, £416,500
($2,026,897) had been advanced under these acts to such associations as the Peabody Trust, H ayle’s Charity
Estate Trustees, etc. See the Housing Problem in England, by E . R . Dewsnup, p. 198. Manchester, 1907.




328

B U L L E T IN OF T H E BU REAU OF LABOR STATISTICS.

A M O U N T A D V A N C E D AS L O A N S B Y T H E P U B L IC W O R K S L O A N B O A R D TO IM P R O V E
A N D C O N S T R U C T D W E L L I N G S OF W O R K I N G C L A S SE S, 1891 TO 1913.
[Source: Forty-second Annual Report of the Local Government Board, 1912-13, Pt. II, Housing and
Town Planning, London, 1913, p. xxxix.]

Year ending Mar.
31—

1891................................
1S92................................
1893................................
1894................................
1895................................
1896
1897................................
1898................................
1899................................

Am ount
advanced.

$214,223
43,799
86,624
217,533
112,489
112,903
105,603
176, 411
36, 499

Year ending Mar.
31—

! 1900................................
! 1901................................
; 1902................................
1 1903................................
1904................................
1905
... .
1906................................
1907................................
1908................................

Am ount
advanced.

$109,496
113,243
277,877
89,422
78,764
177,579
131,639
90,205
248,240

Year ending Mar.
31—

Am ount
advanced.

1909................................
1910......................
1911................................
1912................................
1913 1 .............................

$327, 477
464,318
1,381,935
965,202
1,515,049

T otal.................

7,076,530

1 Figures for 1913 from Thirty-eighth Annual Report of the Public W orks Loan Board, p. 2 .

During the 20 years from 1891 to 1910, inclusive, the amount
advanced was $3,214,344, while during the next three years it was
$3,862,186; that is, considerably over half of the total amount loaned
was advanced within the three years after the act of 1909 had gone
into effect.
The reports on the loans made' show a marked change in the char­
acter of the organizations or associations applying for them. Under
the earlier acts the loans were largely to associations for providing
workingmen’s dwellings either at no profit or at a lower profit
than would usually be expected from a business investment. In
other words, the idea of doing something for the workingmen was
prominent. The later loans are largely to building clubs, cooperative
housing societies, and other groups striving to improve their housing
conditions by their own associated efforts. The work of the early
societies naturally centered in large cities, especially in London; the
work of the later building clubs and cooperative societies is very apt
to be in small cities or suburbs. The early societies were in some
cases liberally endowed, and their effectiveness seems to have
depended to a considerable extent on the lack of public interest in
the provision of good housing, so that as public activity in this
direction has increased the work of these bodies appears to have
decreased, both absolutely and relatively.
In fact, the older established bodies seem to have made no forward
movement for a number of years. * * * Such organizations as
the Peabody Trust had their period of greatest activity when they
were able to secure from the old Metropolitan Board of Works sites
at but a fraction of their commercial value, but the London County
Council has followed a different policy and has been actively engaged
in house building on its own account, thereby apparently reducing
the older housing organizations to a state of passiveness.1
By contrast, the housing activity of the local authorities seems to
rouse the later organizations to increased efforts. The following
1 The Housing Problem in England, E . R . Dewsnup, p. 166.




Manchester, 1907.

G O V ERN M EN T AID TO H O U SIN G ---- GEEAT B R IT A IN .

329

table shows the number of loans made by the Public Works Loan
Board since 1903, the name of the borrower, details of loan and
number of houses which the loan is to help provide, when the latter
item could be definitely stated:
L O A N S F R O M P U B L IC W O R K S L O A N B O A R D TO P R I V A T E P E R S O N S , S O C IE T IE S , E T C .,
IN E N G L A N D , W A L E S , A N D S C O T L A N D , 1904 TO 1913.
[Compiled from annual reports of the Public Works Loan Board, 1904-1913.]

Period
Rate of of re­
interest pay­
(per
ment
cent). (years).

N um ­
ber of
dwell­
ings
to be
built.

Year
ending
Mar.
31-

Am ount
ad­
vanced.

Total
amount
of loan.

1908
1913
1911
1912
1912
1913
1906
1912
1909
1907
1908
1908
1905
1905
1912
1905
1906
1907

$18,979
9,198
54,1.59
7,957
4,959
18,045
9,733
8,181
10,439
13,870
4,623
4,234
31,632
24,333
47,205
25,792
23,359
14,113

$18,979
20,537

30

35
48

62,116

30

64

4,959
52,364
9,733
8,181
10,439
13,870
4,623
4,234
31,632
24,333
72,671
25,792
23,359
14,113

30
30

4
59
23
18
26
10
10

10
40
5
5
5

1907
1908
1910
1908
1912
1913

5,042
6,541
18,658
9,636
38,406
16,463

11,582

10

20

18,658
9,636
54,870

15
6

” 36

10

’ioo

1913
1909
1912
1910
1908

17,544
15,816
18,974
36,499
11,047
11,680

22,970
15,816
22,736
36,499
11,047
15,802
266,134

40
30
30

28
24
23

20

100

Aberdare Bargoed Building C lub................................
Ainsworth & Sons (L t d .) ...............................................
Anchor tenants (L t d .).....................................................

Bedlinog Building C lub...................................................
Bedlinog Hall W orkmen’ s Building C lub...............
Bedlinog W orkm en’ s Building C lub..........................
Blaina Building C lub.......................................................
Bridge Street Building Club (Blackwood)..............
Bronhenlog Building C lu b.............................................
Brynglas Building Club...................................................
Byfleet Tenants (L t d .)....................................................
Caeracca Building C lub...................................................
Cardiff and County Conservative Workingmen’ s
Superanuation and Benefit Society........................
Cwmfelin W orkmen’ s Building C lu b ........................
Cwrt Coch Building C lu b ...............................................
Danygraig Building Society..........................................
Datchet Copartnership Housing and Allotment
Society ( L t d .)..................................................................
D ent, Joseph M alaby........................................................
Derwentwater Tenants (L t d .)......................................
Dunkerton Collieries ( L t d .)...........................................
Ealing Tenants (L t d .)......................................................

10,220
1909
1910
1911
1912
1913
1904
1905
1906
1911
1909
1909

East End Dwellings Co. ( L t d .) ...........................

Fairfield Building C lub...........................................
Fallings Park Garden Suburb Tenants (L td .)

1910
Garden City Tenants ('Ltd.).

Garden Village (H ull) ( L t d .)..
Garfield Building C lu b..............
Gellifaelog Cottage C lub............
Griffin (Blaina'l Building Club

1911
1907
1908
1909
1912
1911
1913
1910
1911
1910
1911
1912

1 Am ount of earlier loans increased by this sum.
2 Reduced in following year to £3,663 ($17,826).




65,192
39,920
39,954
216,496
26,960
109,379
66,622
58,398
80,297
24,333
72,876
5,460
3,163
17,033
8,278
11,397
6,429
43,799
57,498
19,466
11,081
46,300
176.849
114,095
4,321
9,733
5,596
15,305
6,497

39,954
i 101,525
407,453

10

10
8
6
10
10
10
10

20
30
30

12
16
17

31
30
30
30
30
8
30
30

58,398
80,297
24,333
72,876
5,460
3,163
27,068

2 18,210

11
60
58
82
53
48
29

3
*

12
6
36
32

43,799
57,498
30,766

20
20
30

46,300
374,721

30
30

4,321
9,733
26,279

20
12

8

3 1,119

3 Original loan increased by this amount.

71
99

330

B U L L E T IN OF T H E BU REAU OF LABOR STATISTICS.

L O A N S F R O M P U B L IC W O R K S L O A N B O A R D TO P R I V A T E P E R S O N S , S O C IE T I E S , E T C .
IN E N G L A N D , W A L E S , A N D S C O T L A N D , 1904 T O 1913— Continued.

Year
ending Amount
ad­
Mar.
vanced.
31—

Hampstead Garden Suburb Trust (L td.)
Hampstead Tenants ( L t d .) .........................

1913
1908
1909
1910

Harborne Tenants (L td.)

Haslemere Tenants ( L t d .) .....................
H ayle’ s Charity Estate Trustees.........
Hereford Cooperative Housing (L td .)
Howard Cottage Society (L t d .) ...........

1911
1909
1910
1911
1912
1913
1913
1904
1911
1912
1912
1913

Letchworth Cottages & Buildings (L td .)

1909
1910
1911
1912

Letchworth Housing Society ( L t d .)............

1913

Liverpool Garden Suburb Tenants (L td.),

1911
1912
1913

Llwyncrwn W orkmen’s Building Club.
London Housing Society (L t d .)..............

1913
1911
1912
1913

Long Sutton & District Copartnership Housing
Society ( L t d .) ....................................... ...........................
Manchester Tenants (L t d .)............................................ .
McAlpine, Robert & Sons, Messrs.5,
M ynydd Mawr Building Association
N antddu Building Co, ( L t d .) .............................
Newbattle & W hitehill Building Co. ( L t d .) 5.
Newbiggin Colliery Co. (L t d .) ........................................
Newtongrange & Easthouses Building Co. (L td .)5.
Oldham Garden Suburb Tenants ( L t d .)....................
Otford Small Holders ( L t d .)...........................................
Penguelan Building Co. ( L t d .).......................................
Ruislip Manor Cottage Society ( L t d .).........................
Scottish Garden Suburb Co. (L td . ) 2............................
Sealand Tenants ( L t d .).....................................................

Second Hampstead Tenants (Ltd.).

1912
1913
1909
1910
1911
1908
1910
1911
1904
1905
1908
1911
1904
1907
1912
1913
1911
1913
1913
1913
1908
1913
1912
1911
1912
1913
1911
1912

1 Earlier loans increased by this amount.
2 Original loan increased by this amount.
3 Subsequently increased to £1,133 (§5,514).
4 Subsequently increased to £31,743 ($154,477).




$38,650
41,224
12,823
21,291
49,273
35,073
103,647
89,227
132, 588
200,607
77,854
12,760
15,879
4,356
35,428
9,597
30,172
30,980
15,607
27,530
20,293
26,766
9,733
8,443
1,728
8,190
13,154
6,205
41,122
55,794
27,564
35,827
7,665
25,598
76,346
16,775
90,434
33,219
4,540
973
43,346
55,322
55,809
34,066
11,193
22, 873
11, 436
4,575
4,575
8,808
9,232
3,538
22,629
18, 468
41,171
11,388
45,015
14,600
34, 494
15,183
23,359
46,232
25,792
36,635
50,665
12,439
50,568
133,975
71,221
135,284
102,513

Total
amouilt
of loan.

Period Num­
Rate of of re­ ber of
interest pay­ dwell­
ment
ings
(per
cent). (years). to be
built.

$38,650
54,505
70,564
35,073
1 125,580
447,397
2149,134

15,879
16,059
35,428
9,597
30,172
46,587

3J
31

30
30

H

30

31
31
31
31

30
27b
30"
30

93
24
530

30
30
30
30
30
30

20

3*
31
31
31
31

27,350
23,471
38,226

31
31
31

30
30
30

47
45
50

8,443

31

30

12

8,190
13,154
6,205
124,480

3*

30
30
30
30

24
28

36
26

H

31
31
31

66
19
52
46

12

35,827
7,665
25,598
113,550

31
31

30

90,434
168,702

3f

40
40

s 4,540

3f

40

8

31

30

125

3i
3j

28
30
30

^ 112,927
34,066
34,066

10

3f
3f

40
40

3f

31

11, 436
9,149

3-1

20
20

20

8,808
9,232
3,538
22,629
18,468
131,396

3i

20
20
10
10
71

19
26

30

300

45,015
14,600
60,831
15,183
23,359
46,232
25,792
108,348

31
31
31

H

3l
3|
3i
31
31

16

10
56

20
17
30
40

3*

31
3*

3f
31
31

30

133,975
6 206,505

31
31

10

30
40
30

138,092

76

20

i i 6 , 224 ;

51
29
38

88

30
30

91
128

....

3i 1

30 i

( 7)

5 Scotch loans.
e Increased in following year b y £2,920 ($14,210).
7 Houses, 18; flats, 76.

831

G O V E R N M E N T AID TO H O U SIN G ---- GREAT B R IT A IN .

L O A N S F R O M P U B L IC W O R K S L O A N B O A R D TO P R I V A T E P E R S O N S , S O C IE T IE S , E T C .,
IN E N G L A N D , W A L E S , A N D S C O T L A N D , 1904 TO 1913— Concluded.

Year
ending
Mar.
31—

Second Hamstead Tenants ( L t d .).................................

1913

Sevenoaks Tenants ( L t d .) ................................................

1911
1912
1911
1912
1912
1910
1905
1906
1907
1908
1913
1906
1910
1908
1909
1906
1907
1912
1913
1911

Am ount
ad­
vanced.

Stoke-on-Trent Tenants (L td .).......................................
Tabor, Mr. R . W ..................................................................
Taff Building Club (No. 2 ) ..............................................
Taylor, Mr. W . F .................................................................
Tonypandy Building Club...............................................
Tower Housing Society (L t d .) .......................................
Tw yn Carno Building C lu b.............................................
Twyncynon Building C lub..............................................
T y Fry Building C lub.......................................................
Victoria Building Club.......................................................
W all, Mr. Thom as...............................................................
W atson, Mr. J. S. C .............................................................
Winchester Workingmen’s Housing Society (L td .).
Windsor Building Club, 1911.......................................1.

,

$16,712
4,429
7,499
1,908
53,084
33,078
1,436
9,733
10,950
20,683
1,217
12,166
14,600
38,932
7,971
8,760
5,840
14,600
12,166
3,650
54,125
20,829

Total
amount
of loan.

Rate of
interest
(per
cent).

N um ­
Period
ber of
of re­
dwell­
pay­
ings
ment
to ba
(years).
built.

$4,429
9, 407

3*
31

30 i
30

53,084
33,078
1,436
9,733
10,950
21,899

3*
31

39
26
4

31
3£
31

30
30
40
7
30
16

31

is

21
20

12,166
14,600
38,932
7,971
8,760
5,840
14,600
12,166
3,650
54,125
20,829

3|

31
3*
3J
3.J
31

3
1
3§
3
1
3f
3
1

30

8
10
8
8
6
10
20
40

12

6

13

20
36

91
18
18

12
29

6
82
40

It is noticeable that very few private persons have applied for
these loans, only five in the course of the 10 years covered. Building
clubs and societies are especially numerous in Wales, while in England
such cooperative societies as the Ealing Tenants, Garden City
Tenants, Hampstead Tenants, and the like have borrowed most
numerously and extensively. The garden city idea seems to be well
in the lead among the plans favored by private investors and coopera­
tors, and many of the tenants associations contained in the above list
are working on garden city lines.
It is impossible to say how much housing work is represented by
the loans given in this table. Specific mention is made of 4,471
dwellings or houses toward the construction of which the loans were
to be applied, but in the case of some of the largest loans no statement
is made as to how many buildings were contemplated. Thus the
East End Dwellings Co. borrowed £48,475 ($235,904), the Gar­
den Village (Hull) £77,000 ($374,721), and the London Housing
Society £81,842 ($398,284), but no. statement is made of the number
of dwellings which these sums were to help build. It is noteworthy
that the amount loaned by the Public Works Loan Board to associa­
tions, private persons, etc., was in the year ending March 31, 1911,
considerably over twice the total amount of loans sanctioned to
urban and rural authorities combined, in 1912 was 86.6 per cent of the
corresponding amount for that year, and in 1913 was 43.4 per cent.
Since the amounts borrowed by the societies and clubs represent
only a portion of their work, it is evident that relatively, as well as
absolutely, they are playing an important part in meeting the needs
of the housing situation.




332

B U L L E T IN OF T H E BUREAU OF LABOR STATISTICS.

HOUSING LEGISLATION IN SCOTLAND.

The earlier housing legislation of Scotland was in the form of special
acts embodying the same principles as the English legislation, but
applicable only to Scotland. The act of 1890, slightly modified, was
made applicable to it, as was the act of 1909. Practically the
same situation exists there as in England. The Government has
legislated in behalf of housing reform, may exercise a supervisory
power over the building activities of local authorities, and stands
ready to lend money on the same terms and under the same restric­
tions as in England; the local authorities have the same powers of
condemning and clearing off slum areas, of improving areas which
can be treated without a complete clearance, and of providing houses
apart from clearance schemes when they consider such action neces­
sary ; and State aid to private builders is given in the same way.
ACTION OF MUNICIPAL AUTHORITIES OF SCOTLAND (SLUM
CLEARANCES, HOUSING, AND LOANS).

Glasgow appears to have taken the lead in slum clearances. In
1866 the Glasgow improvements act created an improvement trust,
which has been administered by the city council. Under this act
88 acres in the center of the city were acquired. The houses were
old, dilapidated, and insanitary, and the wynds and closes were nar­
row and irregular. The population of the area was about 51,000,
densely crowded, and living under unhealthful conditions. Radical
treatment was adopted. Thirty new streets were formed and 26
existing streets widened, thus converting into open space about 23
acres formerly covered with houses. Two filthy streams which ran
through the district w^ere covered in and Alexandra Park was acquired
and laid out. Like the London authorities, the trust at first dis­
posed of the sites cleared, but since 1889 have retained and built upon
them, holding and managing the property themselves. In 1897
further improvements were authorized, including the purchase of 25
acres as sites for workingmen’s dwellings. The work done has been
expensive.
The purchase and improvement of lands and buildings have
involved the expenditure of £2,000,000 [$9,733,000], and new build­
ings have cost over £400,000 [$1,946,600]. Property has been sold
and feu duties created to the value of £1,000,000 [$4,866,500] and
the municipality holds property valued at £880,000 [$4,282,520].
The amount drawn from the rates in 30 years is about £600,000
[$2,919,900]. The total revenue for the year ended May 31, 1906,
was £105,462 13s. 2d. [$513,234] and the expenditure £103,445 13s.
8d. [$503,418], showing a net surplus of £2,016 19s. 6d. [$9,816].
The rate has never exceeded three-fourth pence [1J cents] in the
pound sterling.1




1 Housing U p to Date, W . Thompson, p. 19.

London, 1907.

G O V E R N M E N T AID TO H O U SIN G ---- GREAT B R IT A IN .

333

The effect upon health of such clearances was shown very strikingly
in one of the crowded areas cleared in these improvements, a space of
4 f acres. The old buildings were swept away, newr streets and spaces
were opened up, and new dwellings built, only I f acres being covered.
“ The death rate was 43.68 per 1,000 before the clearance, but fell to
26 per 1,000 eleven years afterwards and is still decreasing/7 1
Other cities, notably Edinburgh, have undertaken clearances, but
the w
rork has usually proved expensive, partly because the sites
cleared are worth much less for building than for business purposes.
The provision of houses by municipal authorities is common in
Scotland. In 1906 Aberdeen had built and was managing houses
containing 128 tenements, Edinburgh 647, Glasgow7 2,300, and Perth
112.2 Glasgow, in addition to having the largest number of dwell­
ings, has made perhaps the greatest effort to meet the needs of the
poorest classes.
Special efforts were made to secure that the poorest classes should
occupy the dwellings, preference being given for one-roomed dwell­
ings to those whose wages were under 22s. [$5.35], and for twroroomed dwellings to those who earned less than 26s. [$6.33] per week.
The corporation in this manner have housed in the blocks:
Forty-nine tenants with wages under 24s. [$5.84] per week, average.
One hundred and five tenants with wages under 21s. 6d. [$5.23]
per w
reek, average.
Twenty-seven women with wages under 10s. 3d. [$2.49] per w^eek,
average.
The tenants of other dwellings include skilled laborers in the big
works and factories and unskilled laborers engaged in public works
in the vicinity.3
The municipal lodging house is rather a common form of activity
in Scotland. Aberdeen, Leith, Greenock, Paisley, and Peterhead
each have one, while Glasgow, which was first in the field, has seven,
and accommodates women as well as men. These seven have shown
a profit on the investment for a number of years.
ACTION OF LOCAL AUTHORITIES OF SCOTLAND AGAINST
INSANITARY HOUSES.

The Scotch local authorities have never availed themselves of the
privilege of borrowing from the Public Works Loan Fund as freely
as the English authorities have done. Up to March 31, 1913, the
total amount so advanced w
ras £236,810 ($1,152,436), of which at
that date all but £5,839 6s. lid . ($28,417) had been repaid.4 From
other sources, however, under the terms of the act of 1890, they
borrowed as follows.
1 Housing U p to Date, W . Thompson, p. 10 1 . London, 1907.
2 Idem , pp. 43, 4G, 95, 96.
8 Housing Handbook, W . Thompson, p. 93. London, 1903.
4 Thirt}T
-eighth Annual Report of the Public W orks Loan Board, 1912-13, p. 40.




334

B U L L E T IN OF T H E BUREAU

LOANS

R E C E IV E D

BY

LOCAL

A U T H O R IT I E S

OF LABOR STATISTICS.
FROM

MAY

16, 1902, TO

M AY

15, 1911.

[Memorandum of the Local Government Board for Scotland, 1913 [Cd. 6676], p. 8 .]
Am ount bor­ Am ount out­
rowed during standing at
year.
end of year.

Year.

1903
.
.................................................................................................
1904.................................................................................................................................................
1905.................................................................................................................................................
1906.................................................................................................................................................
1907.................................................................................................................................................
1908.................................................................................................................................................
1909.................................................................................................................................................
1910.................................................................................................................................................
1911.................................................................................................................................................

$ 2 2 ,143

$257,029
283,284
303,363
305,232
355,366
356,126
348,276
339,755
337,098

30,975
24,435
10,176
54, 758
9,976
642
6,891

The work done by local authorities in closing or demolishing houses
unfit for habitation or forcing their owners to put them into good
repair is much less extensive than that done by the English authori­
ties, but follows the same lines. The table following shows the
action taken by local authorities under section 15 of the act of 1909,
which provides that houses rented below a certain sum must be kept
by the landlord uin all respects reasonably fit for occupation,” and
under sections 17 and 1.8, which authorize proceedings against houses
“ in a state so dangerous or injurious to health as to be unfit for
human habitation.”
A C T IO N T A K E N B Y S C O T T IS H L O C A L A U T H O R IT I E S .

Under sections 17 and 18, act o f 1909.
[Memorandum of the Local Government Board for Scotland, 1913 [Cd. 6676], pp. 4 and 5.]
From
Dec. 3,
1909, to
May 15,
1911.

Number of local authorities taking action.................................................................
Number of houses in respect of which representations were made to local
authorities...........................................................................................................................
Number of houses put in good repair by owners without the issue of a
closing order.......................................................................................................................
Number of houses closed or demolished voluntarily.............................................
Number of houses in respect of which closing orders were m ade....................
Number of houses in respect of which closing orders were determined........
Number of houses demolished by owners after closing orders were issued..
Number of houses in respect of which orders for demolition were m a d e .. .

Year
ending
M av 15,
1912.

Total.

57

113

170

996

1,995

2,991

207
168
414
40
49
58

346
224
939
37
65
26

553
392
1,353
77
114
8-4

Under section 15, act of 1909.
Number of local authorities taking action...........................................................
Number of houses in respect of which notices were given............................
Number of houses which landlords closed instead of complying with notices
Number of houses in respect of which notices were satisfactorily complied
w ith.......................................................................................................................................
Number of houses in respect of which local authority executed the works
in default of landlord......................................................................................................
Number of houses in respect of which the notices remained undisposed of
at end of period..........................................................................................................

22

42

J

338
58

1,002 I

200

361

114 j

2
78

499 J

1 In 28 cases notices were either withdrawn or not proceeded with for various reasons.




64
1,340
172
561

2
l 577

G O V E R N M E N T AID TO H O U SIN G ---- GREAT B R IT A IN .

335

This table shows a total of 1,193 houses put into good condition
without any cost to the public. These figures, however, do not tell
anything like the whole story, as the authorities of three large cities
preferred to proceed under local acts. For Edinburgh, Dundee, and
Aberdeen during the same periods the figures were as follows:
A C T IO N T A K E N B Y L O C A L A U T H O R IT I E S OF E D I N B U R G H , D U N D E E , A N D A B E R D E E N
IN IM P R O V IN G H O U S IN G C O N D IT IO N S .
[Memorandum of the Local Government Board for Scotland, 1913 [Cd. 6670], p. 13.]
Dec. 3,1909, Year end­
to May 15, ing May 15,
1912.
1911.

Number of houses in respect of which notices were given...............................................
Number of houses in respect of which such notices were satisfactorily complied
w ith....................................................................................................................................................
Number of houses closed by owners or authorities.............................................................
Number of cases in which action is pending or which have been otherwise dis­
posed of.............................................................................................................................................

3,039

2,406

2,536
355

1,888

• 148

194

324

This shows 4,424 houses repaired by their owners at the behest of
the local authorities, making in connection with those repaired under
the terms of the act of 1909 a total of 5,617. In addition, a large
number of houses were dealt with under public health acts.
The two sets of figures show a marked dissimilarity, the work done
under the act of 1909 having increased materially in the year ending
May 15, 1912, while that done under the local acts fell off during that
year.
GOVERNMENT AID TO SOCIETIES, PRIVATE PERSONS, ETC.,
IN SCOTLAND.

Public loans to societies, associations, and private persons for build­
ing purposes have not been made so extensively in Scotland as in
England. Up to March 31, 1913, the total amount advanced by the
Public Works Loan Board to such agencies in Scotland was £64,218
($312,517).1 The different agencies to which such loans have been
made since 1903 are shown in the table given on page 329. It will be
noticed that the building clubs and societies, which are so numerous
in Wales, scarcely appear among the Scotch borrowers, and that the
garden city, garden village, and garden suburb companies, which
seem at present to be almost the favorite form of associated activity
among English borrowers, have only one representative among the
Scotch. The number of Scotch borrowers, however, is too small for
these facts to be particularly significant.
i Thirty-eighth Annual Report of the Public Works Loan Board, 1913, p. 92.




336

B U L L E T IN

OF T H E BUREAU OF LABOR STATISTICS.

SPECIAL HOUSING NEEDS OF IRELAND.

In Ireland the need of providing cottages for agricultural laborers
came to the front earlier than the question of providing housing for
town dwellers. In response to this need a series of acts, known as the
Laborers7Cottages and Laborers (Ireland) Acts have been passed, the
first of which was enacted in 1881. These deal only with rural
housing. The act of 1890, which was applicable to the whole L^nited
Kingdom, made provision for the housing activities of town and urban
district authorities. Amendments to the act of 1890 were passed
separately for Ireland, so that an entirely distinct body of housing
legislation grew up there. As far as urban housing legislation is con­
cerned, this situation was altered by the passage of the act of 1909,
which like that of 1890 was made applicable to the whole Kingdom.
For its rural housing, though, Ireland still has a series of enactments
peculiar to itself.
ACTION OF MUNICIPAL AUTHORITIES IN IRELAND
CLEARANCES, HOUSING, AND LOANS).

(SLUM

As compared with England, there has been little municipal activity
in Ireland under the act of 1890. Dublin carried out two slum clear­
ance schemes at a cost of £50,000 ($243,325). The land was cleared
and let to the Artisans Dwellings Company at a rent of £340 ($1,655)
a year.1 Belfast spent £33,700 ($164,001) on clearance schemes,2 and
in 1911-12 the Irish Local Government Board sanctioned a loan of
£9,650 ($46,962) to Dublin authorities for a further scheme of this
kind.3
Llouse building under Part III of the act of 1890 has been more
extensively practiced. By 1907 Dublin had provided 460 block
dwellings, Rathmines had 349 dwellings, and Drogheda had just
put up new municipal houses costing £5,000 ($24,333). No data
are at hand showing the extent to which municipal housing is now
provided, but it seems probable that there has been a marked
increase in this form of activity since 1907. In the year ending
March 31, 1913, the Irish Local Government Board sanctioned loans
for this purpose as follows:
Arklow.......................................................................................................................................
Ballinasloe................................................................................................................. ..............
B a lly m o n e y ...........................................................................................................................
Bandon Town commissioners............................................................................................
Birr..............................................................................................................................................
Carlow........................................................................................................................................
Clonakilty.................................................................................................................................
Coleraine....................................................................................................................................
1 Housing Handbook. W . Thompson, p. 47. London. 1903.
2 Housing Up to Date, W . Thompson, p. 90. London, 1907.
s Annual Report of the Local Government Board for Ireland, 1912 [Cd. 0339], p. xli.




$9,733
36,791
2,433
21,023
29,199
19,466
8,760
8, 516

G O V ERN M EN T AID TO H O U SIN G ---- GREAT B R IT A IN .

337

Enniscorthy............................................................................................................................. $17, 033
Fermoy.......................... ...........................................................................................................
40,879
Fethard Town commissioners............................................................................................
5, 012
Galway.......................................................................................................................................
31,730
Xilliney and Ballybrack........................................... ......................................................... 19, 953
Kingstown................................................................................................................................
34,187
Letterkenny.............................................................................................................................
28, 226
Longford.................................................................................................................................
29,199
Maryborough. Town commissioners..................................................................................
26, 766
Naas............................................................................................................................................
15,573
New Ross......................................................................................' ..........................................
14,600
24,333
Tipperary................................ .................................................................................................
Total.............................................................................................................................. 423,412

The amount of these loans, added to £1,004,893 [$4,890,312]
mentioned in our last report, makes a total of £1,091,898 [$5,313,722]
sanctioned for the purposes of the act. Of this total, £317,686
[$1,546,019] has been sanctioned since the passing of the act of
1908.1
In addition to their work under the act of 1890, Irish authorities
have made loans to would-be householders under the terms of the
Small Dwellings Acquisition Act. Loans amounting to £20,368
($99,121) were sanctioned for this purpose during the year ending
March 31, 1912.1
RURAL HOUSING IN IRELAND.

In the work in Ireland the main emphasis has always been placed
upon the provision of rural cottages, and the acts passed to promote
this purpose have been singularly effective. Under the earlier acts
the procedure was unnecessarily slow and expensive, but successive
amendments have greatly improved matters in this respect. A t
present the most important features of the law concerning the pro­
vision of cheap cottages are the ease with which the machinery may
be set in motion, the simplicity of the procedure required, the pro­
vision for loans at moderate rates, and the subsidies given by the
General Government.
The first step toward securing new cottages, the representation, as
it is called, is much simpler than the corresponding process in Eng­
land. When the existing house accommodation for agricultural
laborers and their families is deficient, having regard to the ordinary
requirements of the district, or is so insanitary as to be unsuitable for
habitation, a representation may be made to the sanitary authority
who shall proceed to make an improvement scheme. Originally this
representation had to be signed by at least 12 persons rated for the
i Annual Report of the Local Government Board for Ireland, 1912 [Cd. 6339], p. xli.
G 6 1 7 1 0— B u ll. 1 5 8 — 1 5 ---------2 2




338

B U L L E T IN OF TH E BUREAU OF LAB OS STATISTICS.

relief of the poor within the sanitary district, but by 1906 this had
been modified so that any three persons were sufficient, whether rated
or not, provided in the latter case that they were agricultural laborers
working in the district. Should the inhabitants of the district fail
to make a representation, the council may make a scheme on its own
initiative, or, if it fails to do so or makes inadequate plans for reliev­
ing the situation, the Local Government Board may step in and carry
out a scheme themselves.
The procedure after the representation has been made is simplified
as much as is consistent with the rights of all concerned. If the
owners of the land needed are willing to sell, that point is dropped
from official consideration, and the hearings, notices, and arguments
confined to the two points of whether the necessary loan shall be
sanctioned and whether the proposed scheme is a satisfactory one.
The Local Government Board is the final authority, and on its con­
firmation of the scheme the local authorities are free to apply for
their loan and begin operations.
In order to meet approval the scheme must provide that all
cottages to be built under it shall contain at least a kitchen and two
bedrooms; every habitable room must be at least 8 feet high, except
attics, in which half the area of the room must be 7 feet in height- ;
each habitable room must have window area amounting to not less
than one-twelfth of the floor space; all bedroom floors must be boarded
or tiled, the ground floor must be 9 inches above the external ground,
and sanitary accommodations must be provided conforming to certain
specified conditions.
The average cost of such cottages, including half an acre of ground,
was in 1906 about £150 ($730), but at that date the cost had been
rising for some time and is probably higher now.1
Loans may be raised by the local authorities on the security of
the rates. In 1906 Parliament provided a fund of £4,250,000
($20,682,625), increased in 1911 by £1,000,000 ($4,866,500), to be
loaned for housing purposes. Loans from this fund were to be repaid
by annuities of 3.25 per cent for 68^ years, an arrangement which
saves the rate payers £1 12s. 2d. ($7.83) on each £100 ($486.65)
borrowed.
The repayment of the loan is made easier by two subsidies from
the imperial exchequer. From a fund known as the Laborers’ Cottage
Fund £22,000 ($107,063) is taken annually to pay 16 per cent of the
annuities on laborers’ cottages, and a further sum of £28,000 ($136,262)
a year from the Ireland Development Grant is applied to paying
another 20 per cent of the annuities. Thus the communities borrowing
i During the discussions in Parliament when the act of 1911 was passed it was agreed that the cost of a
cottage with a plot of ground attached would be on the average £170 ($827). See Municipal Year Book of
the United Kingdom, 1914, p. 806.




339

G O V E R N M E N T AID TO H O U SIN G ---- GREAT B R IT A IN .

the money have to meet only 64 per cent of the annual charges on the
loan.
In addition to this, local authorities are empowered to levy a
special tax for the purpose of meeting the payments on the loan.
An interesting point in this connection is the effect of these subsi­
dies on wages. Theoretically a subsidy in aid of rents should depress
wages to a corresponding degree, but during the six years 1901-1907,
during which such subsidies were being made freely, wages rose.
The average rate of wages has gone up during the last six years by
8J per cent, or 9d. [18 cents] per week, from 10s. 2d. to 10s. llcl.
[$2.47 to $2.66], but this is attributed to the laborer being more inde­
pendent through not living in a “ tied cottage.” 1
The way in which the subsidies and the loans at easy rates make it
possible to substitute good houses for bad without impossible bur­
dens upon the rate payers is shown by the experience of the town of
Roscrea. It is too small a town to come under the provisions for
municipal housing, so that a rural district council was the body to
take action and the regulations for providing laborers’ cottages ap­
plied. The council began action rather cautiously in November,
1908, by condemning 36 cottages which were so dilapidated, so over­
crowded, and so insanitary that the health authorities were more
than ready to pronounce them unfit for human habitation. Their
sites were acquired by voluntary purchase, and within a year 36 new
cottages w^ere put up. The costs per cottage were as follows:
Acquisition of site.................................................................................. ............ $107
Building of cottage.............................................. ............................. ................. 623
All other expenses................................................................................ ............
49
Total............................................................................................................

779

These cottages were let at Is. 7d. (39 cents) per week, at which
figure they were easily kept filled with desirable tenants, arrearages
of rent being practically unknown. At this rent they were no charge
whatever upon the local rates.
Here is how it works o u t : The money was borrowed from the
land commission on the terms specified in the act of 1906, at 3| per
cent for 68J years. Only 64 per cent of this sum is charged to the
district council, so the expenses of each cottage are as follows:
Installment on loan (£160 [$779]) to land commisTer annum.
sion, at 3J- per cent.......................................................... £ 5 4s.
[$25.31],
Less 36 per cent grant from Government..................... £ 1 17s. 5d. [ $9.10].
Net payment to land commission..................... <£3 6s. 7d. [$16.20].
Cost of collecting rent........................................................
4s. Id. [ $0.99 .
Insurance on cottage...........................................................
2s. 4d. [ $0. 57].
Total expenses per cottage.................................. <£3 13s.
1 Housing Up to Date, W . Thompson, p. 140.




London, 1907.

[$17.76].

340

B U L L E T IN

OF T H E BUREAU OF LABOR STATISTICS.

The rent of the cottage at Is. 7d. [39 cents] per week amounts to
£4 2s. 4d [$20.03] per year, which is 9s. 4d. [$2.27] more than ex­
penses. This is to be applied toward repairs, but none will be needed
for many years.1
Encouraged by the success of this venture, Roscrea at once under­
took a scheme for 39 cottages, and followed this up by another scheme
for 24 cottages.
The cottages do not always come even as near as this to being
self-supporting, and the special rate for meeting their cost is fre­
quently resorted to. The need for them, however, is so great that
the advisability of such subsidies seems to be accepted as a matter of
course. Of 213 rural districts to which, up to March 31, 1913, loans
for housing purposes had been sanctioned, there were only 14 in
which no rates were imposed to meet part of the expense.3 OrclinarOy, the rate was light; in only 20 cases did it pass 6d. (12 cents)
in the pound (the maximum rate allowed is Is. (24 cents) in the
pound), while in 76 cases it was under 2d, (4 cents).
The number of cottages built and the number under way, the
amount of the total loans sanctioned, the amount of the loans already
paid over, and the rent received during the past year were, on March
31, 1913, as follows:
N U M B E R O F C O T T A G E S B U I L T A N D N U M B E R U N D E R W A Y , L O A N S S A N C T IO N E D
A M O U N T OF L O A N S P A ID O V E R , A N D R E N T R E C E I V E D , M A R . 31, 1913.
[Laborers’ Cottages, Ireland; return to an order of the House of Commons dated 14th February, 1913.]

Number of Number in
laborers’
course of
cottages
construc­
built.
tion.

Total loans
sanctioned.

Am ount paid
over.

Rent received.

U lster.................................................
Munster.............................................
Leinster............................................
Connaught.......................................

7,192
17,250
15,348
2 ,062

1,2 10
789
159

$7,723,588
15,400,428
14', 389,642
2,259,189

$6,832,760
14,072,383
13,256,265
1,938,655

$118,189
200,639
216,600
34,289

All Ireland...........................

41,852

2,538

39.772,847

36,100,063

569,717

380

The cottages, all of which have a piece of land attached, cost
approximately £170 ($827), of which £130 ($633) was for the build­
ing alone.3 This leaves £40 ($195) for all other expenses, or an aver­
age of £8 ($39) per cottage more than was found necessary for the
Roscrea cottages just described. It is quite possible that this high
average is due to the excessive cost of engineering work and legal
fees before the act of 1906 placed a check upon these.
A return issued in April, 1904, showed that the incidental expenses of
carrying out schemes for 4,092 cottages had been: Law costs, £34,342
[$167,125], or £8 [$39] per cottage; engineering expenses (exclusive
1 Pamphlet issued by Housing and Town Planning Association of Ireland, pp. 46-48.
2 See Laborers7 Cottages, Ireland; Return to an Order of the House of Commons dated 14th February, 1913.
8 Yearbook of Social Progress, p. 203. Edinburgh, 1914.




G O V E R N M E N T AID TO H O U SIN G ---- GREAT B R IT A IN .

341

of fixed salaries) £15,221 [$74,073], or £3 15s. [$18.25] per cottage;
and miscellaneous expenses, such as advertising and the preparation
of provisional orders £24,123 [$117;395], or £6 [$29] per cottage,
thus making a total of £73,686 [$358,593], or £18 8s. [$90] per cot­
tage, as against £19 12s. [$95] per cottage for the land.1
The average weekly rental of these cottages is about Is. Id. (26
cents), at which figure they brought in during 1912-13 approximately
40 per cent of the total amount which must be raised yearly to pay
off the loans.
In the report of the Irish Local Government Board for the year
ending March 31, 1912, it is stated that at that time schemes had
been authorized which would bring the total number of cottages pro­
vided up to 48,775, and that other schemes were under consideration,
providing for 10,648 additional cottages with garden allotments.3
Under the act of 1890 public loans to companies, associations, and
private persons are as available in Ireland as in England, but appar­
ently no application has been made for them. The need for laborers’
cottages seems to have absorbed attention to the exclusion of most
other forms of housing activity. Since the passage of the act of 1909,
however, a housing and town planning association has been formed in
Ireland, exhibitions have been held, Kilkenny Garden Village and the
Knockagh Residential Estate have been brought into being, and the
indications are that private enterprise will be far more active along
the lines of improved housing than it has been in the past.
SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS OF
THE BRITISH LAND INQUIRY COMMITTEE IN REGARD TO
URBAN HOUSING.3

In conclusion it may be proper to reproduce here the summary of
conclusions and recommendations of the British Land Inquiry Com­
mittee in regard to urban housing. This committee was appointed
in 1912 by the chancellor of the exchequer with the object of obtain­
ing u an accurate and impartial account of the nature and working
of the existing systems of ownership, tenancy, and taxation and
rating of land and buildings in urban districts and the surrounding
neighborhoods and their effect on industry and conditions of life.”
The urban inquiry covered 101 towns:
1.
Much work has been done under the housing acts, more
especially since the passing of the Housing and Town Planning, etc.,
Act, 1909, to improve the housing conditions of the working classes
in boroughs and urban districts. But in spite of this their housing
is still most unsatisfactory.
J Housing U p to Date, W . Thompson, p. 138. London, 1907.
2 Annual Report of the Local Government Board for Ireland for year ending Mar. 31, 1912, p. xl.
3 The Land.

The report of the Land Enquiry Committee, Vol. II.

London, 1914, pp. 205-212.




Urban Hodder and Stoughton,

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B U L L E T IN OF T H E BU REAU OF LABOR STATISTICS.

2. The majority of urban workmen have to live in houses which
are overcrowded to the acre, built in long, uninteresting rows, without
sufficient space around them, and frequently without the free access
of light and pure air.
3. Probably between 5 and 10 per cent of urban workmen live in
slums— i. e., dwellings, which in their present state are unfit for
habitation, and which should either be demolished or subjected to
drastic and thorough repair and alteration. No less than one-tenth
of the whole population were living under overcrowded conditions at
the date _of the last census.
4. The effects of this insanitation and overcrowding upon the
physical, mental, and moral well-being of the community are serious
and far-reaching.
5. It is probable that, on the average, between one-sixth and onefifth of the total income of working-class families is spent on rent and
rates; the proportion varies inversely with the amount of income. In
the case of very poor families the proportion is sometimes more than
one-third.
6. There is a shortage of dwellings in probably^ half the towns of
England and Wales, and the towns in which it exists are of all sizes
and types.
7. For various reasons this shortage is especially acute at present;
but there is always a tendency for the supply of workmen’s dwellings
to lag somewhat behind the demand.
8. Although comparatively well-to-do workingmen live in houses
which are satisfactory according to the standard hitherto adopted,
there is a growing desire among them for dwellings on better planned
areas, with gardens. If left to the uncontrolled play of economic
forces, housing enterprise in the future will not meet this desire, but
will proceed on the old lines.
9. Private enterprise in the past has provided about 09 per cent
of working-class dwellings, most of them being built a few at a time,
by speculative builders, either for occupation by the purchasers or
for investors of moderate means. It has been materially assisted by
the great development of the building society movement, and to a
much smaller extent by advances made by cooperative industrial
societies to their members.
10. Public utility housing societies, which have developed rapidly
of late years, combine several principles which make for the improve­
ment of the type of house provided. They are, however, handi­
capped by the large proportion of their capital (one-third) which has
to be raised by private subscription.
11. Local authorities have provided about one-quarter per cent of
the existing working-class dwellings.
12. The high cost of land, while rarely a direct cause of the inade­
quate supply of dwellings, has, in many towns, been largely respon­
sible for their close crowding upon the ground. While in some towns,
especially small ones and the suburbs of large ones, land is available
at prices which would allow of a much more open development of
estates than is customary, it is in many others only available at prices
which would render it difficult to effect a substantial reduction in the
number of houses built to the acre; and in some instances its cost is
so high that the construction of cottages of an adequate size to let at




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343

rents which working-class families can afford to pay is well-nigh
impossible.
13. The price of land is largely determined by the relation of the
available supply to the effective demand. While cases where owners
refuse to sell it on any terms for the erection of working-class dwell­
ings are rare in towns, the price could, undoubtedly, be materially
reduced in a great number of cases if, by some means, a larger area
were made available for building.
14. Where transit facilities on an adequate scale and at times and
fares suitable for workpeople have been provided, they have resulted
in a marked decentralization of the population.
15. The provision of a plot of land with a house is not only desirable
as securing more air space, but the produce grown upon it may be of
considerable financial benefit to the occupier and provide a valuable
reserve of food, mitigating the hardship of periods of unemployment.
16. Existing local by-laws have, for the most part, been drawn up
with the expectation, that houses would be built 30 or 40 to the acre.
In many towns their requirements are unnecessarily stringent where
a more open development is contemplated, and the cost which they
involve impedes such development.
17. Some reduction in the cost of housing could be effected by
building on a larger scale— i. e., a greater number of houses at one time
and place. Economies could also be effected by the use of new meth­
ods of construction, at present prohibited in many towns under the
local by-laws.
18. The present system of rating improvements falls with especial
severity on working-class dwellings.
19. The improvement of unsatisfactory housing conditions is re­
tarded in varying degrees in most towns and urban districts by—
(a) Inadequate knowledge of the housing conditions on the part of
the local authorities, and consequently of the central authority.
(b) Financial considerations.
(c) The lack of a sufficiently high standard.
(d) Hardships which the proper enforcement of the law would cause
to individual owners.
(e) The adoption of inadequate methods in the past which hinder
present reforms.
(/) The leasehold system.
(g) Insecurity of tenure of medical officers of health and sanitary
inspectors.
Qi) The shortage of alternative accommodation.
20. Generally speaking, the housing conditions in mining villages
are decidedly worse than in other industrial areas.
21. In some towns serious evils result from houses which were con­
structed for occupation by one family being let off in tenements with­
out the necessary structural alterations having been made.
We therefore recommend:
1.
That it shall be a statutory duty resting upon all local author­
ities to see that adequate and sanitary housing accommodation is
available for the working-class population employed, or reasonably
likely to be permanently resident within their area.
Provided that where, in the case of any urban or rural district, the
supply of an adequate number of dwellings would involve undue
risk, owing to the speculative nature of some industrial undertaking



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B U L L E T IN OF T H E BUREAU OF LABOR STATISTICS.

which requires new dwellings to house its workers, the central au­
thority shall have power to transfer the obligation above stated to
the county council in whose area the respective district is situated.
2. That in order to secure adequate control over all future housing
developments, every local authority shall be obliged, within a stipu­
lated period, to prepare a preliminary planning scheme for its entire
area. This scheme would only include the broader principles of
development, leaving details to be filled in later if and when a com­
plete town-planning scheme were adopted. Among other items, the
two following should form an essential part of every preliminary
scheme:
(a) A restriction upon the number of houses which may be built
per acre;
(b) A series of regulations governing the construction of roads
and of buildings, so framed as to encourage in every way possible
an open development of building estates.
3. That in cases where there is a shortage of working-class dwellings,
and sites suitable for their erection are not available at reasonable
prices, local authorities shall be obliged to promote transit schemes
to render accessible a sufficient area of suitable building land.
4. That an official inquiry shall be undertaken to ascertain how
such transit facilities can best be provided and financed, especially
how the increment in land values due to new transit schemes can be
secured by the authority providing these.
5. That local authorities, when developing land acquired for
housing purposes, shall be empowered to lease such land for the
erection of any kind of building.
6. That since the present unsatisfactory housing conditions are
largely due to the presence, in nearly every town and urban district, of
a considerable proportion of persons unable to pay an economic rent
for a sanitary dwelling, the Government shall—
(a) Take means to secure that within a short and defined period
a minimum wage shall be fixed for all low-paid wage earners; and
that the minimum wage fixed under such statute shall, in the case
of men of normal ability, not be less than the sum required to keep
a family of normal size in a state of physical efficiency, and to enable
them to pay an economic or commercial rent for a sanitary dwelling;
and
(b) Take steps to regulate the labor market with a view to de­
creasing the amount of casual employment.
7. That every local authority shall be required, within a stipulated
period, to make to the satisfaction of the central authority a com­
plete survey of housing conditions within its area; and that, in
addition to particulars of the houses themselves, such survey shall
include an investigation into the composition of the population
living under overcrowded conditions or occupying defective dwell­
ings; the results of the survey to be published.
8. That on the basis of this survey every local authority shall pre­
pare within a stipulated period, and to the satisfaction of the central
authority, a complete scheme of proposed action under the housing
acts, with a view to raising the standard of housing in its area to a
minimum of adequacy and sanitation, to be defined by the central
authority.




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345

9. That the contribution which the Government proposes to make
in aid of local rates shall take the form of annual block grants, con­
ditional upon the performance by the local authorities of all duties
imposed upon them by the law, including the new statutory obliga­
tions in regard to housing here proposed.
10. That with a view to stimulating local action under the housing
acts, the central authority shall appoint officers to reside in different
parts of the country, sufficient in number and so distributed as to be
able effectively to stimulate the work of the local authorities, and
that the reports of these officers be taken into consideration by the
central authority in recommending the payment, or the withholding
of the annual grant in aid of rates or part of it as proposed under 9.
11. That except in the case of gross misconduct, local authorities
be required to obtain the sanction of the central authority before
dismissing any officers appointed under the public health acts, and
that the payment of adequate salaries to those officers, in accordance
with a schedule to be provided by the central authority, be made
a statutory obligation upon local authorities.
12. That public utility societies shall be enabled to borrow from
the State a larger proportion than now of the capital required for
building working-class dwellings, on payment of a somewhat higher
rate of interest; the difference between the normal and the proposed
rate of interest to constitute a national reserve fund, as a security
against loss. In addition to this, the Public Works Loan Commis­
sioners to be guaranteed against loss by the State.
13. That local authorities shall be enabled to mitigate the hard­
ships of the present closing order procedure upon owners of dwelling
houses which, according to modern standards, are unfit for human
habitation by reason of original and incurable structural defects or
bad planning, and not of neglect of repairs or sanitary requirements,
by being empowered to issue in such cases closing orders taking effect
at the end of a period to be fixed in each case (within statutory
limits). The making of such an order shall not, however, prejudice
the right and duty of the authority to make an immediate closing
order in the event of repairs or sanitary requirements being neglected
during the time limit.
14. That local authorities shall be empowered to prepare and
enforce replanning schemes for areas which, owing to the congestion
of existing buildings or to the unsatisfactory arrangement of streets,
would not otherwise permit rebuilding with due regard to modern
standards as to air space, access of light, and size of dwellings; and
that, in connection with such schemes, they shall make a charge for
improvement or pay compensation, according to whether the value
of the sites of individual owners has been appreciated or depreciated.
15. That no dwelling house constructed for occupation by one
family shall be let out in tenements without the express permission
of the local sanitary authority, and after such alterations have been
carried out as they may require; and that the authority shall have
power to enforce similar provisions with regard to existing tenement
houses.




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B U L L E T IN OF TH E BU REAU OF LABOR STATISTICS.

LIST OF REFERENCES CONSULTED.
Great Britain laws, statutes, etc. The Housing of the Working Classes Acts, 18901909, 3d ed. London. 1911. Annotated and explained by Charles E. Allan.
Great Britain Local Government Board. Housing and Town Planning. Memo'
randum No. 3 of the Local Government Board Relative to the Operation of the
Housing, Town Planning, etc., Act, London, 1913. [Cd. 7206.]
Great Britain Local Government Board. 42d Report of the Locai Government Board,
1912-13, Part II, Housing and Town Planning. [Cd. 6981.]
Great Britain. Parliament. House of Commons. Select committee on housing of
the working classes acts amendment bill. Report of Select Committee on
Housing of the Working Classes Acts Amendment Bill. London, 1906. (376)
House of Commons Document.
Great Britain. Public Works Loan Board. Annual Reports.
Great Britain. Royal Commission on Housing, of the Working Classes, Reports.
London, 1885. [Cd. 4402, 4409, and 4547.]
Ireland. Local Government Board. Annual Report of the Local Government
Board for Ireland, 1912. [Cd. 6339.]
Ireland. Local Government Board. Laborers’ Cottages, Ireland; Return to an
order of the House of Commons dated February 14, 1913.
Ireland. Local Government Board. Committee on housing conditions of working
classes in Dublin. Report of Departmental Committee on Housing Conditions of
the Working Classes in the City of Dublin, London, 1914. [Cd. 7273.]
Appendix to same [Cd. 7317].
Ireland. Poor Law Commission. Reports from Poor Law Inspectors in Ireland on
Laborers’ Dwellings, 1873. [C— 764.]
Liverpool, Eng. Local executive committee. City of Liverpool Handbook, compiled
for the Congress of the Royal Institute of Public Health, 1903.
Liverpool, Eng. Health Department. Report on the Health of the City of Liverpool
during 1912, by the medical officer of health.
Liverpool. Treasurer. City of Liverpool, Eng., Accounts of the Treasurer, 1908.
London. County council. Housing of the working classes committee. Housing of
the Working Classes in London, 1855-1912, London, 1913.
Scotland. Departmental committee on house letting. Report of the Departmental
Committee on House Letting in Scotland. Edinburgh, 1907. 2v. [Cd. 3715 and
3792.]
Scotland. Local Government Board. Housing and Town Planning. Memorandum
of the Local Government Board for Scotland, 1913. [Cd. 6676.]
Alden, P. and Hayward, E. E. Housing. 3d ed. London, 1910. Social service
handbooks No. 1.
Crotch, WT W . The Cottage Homes of England. 2d ed. London, 1901.
.
Dewsnup, E. R. The Housing Problem in England. Manchester. 1907.
Housing and Town Planning Association of Ireland. Housing and town improvement.
[Dublin. Issued by the Housing and Town Planning Association of Ireland,
1911(?).]
Kaufman, M. The Housing of the Working Classes. London, 1907.
Marr, T. R. Housing Conditions in Manchester and Salford. Manchester, 1904.
Municipal Year Book for 1912. London, 1912.
National conference on the prevention of destitution, 2d, London, 1912. Proceed­
ings of National Conference on the Prevention of Destitution, Westminster, 1912,
pp. 267-388; 124-155.
Nettlefold, J. S. A Housing Policy. Birmingham, 1905.
---------- Practical Housing. Letch worth, 1908.
Parsons, James. Housing by Voluntary Enterprise. London, 1903.




G O V E R N M E N T AID TO H O U SIN G ---- GREAT B R IT A IN .

347

Royal Statistical Society. London. Journal, vol. 64, pp. 189-264, June, 1901. Re­
sults of State, municipal, and organized private action on the housing of the
working classes. By J. T. J. Sykes.
Shaw, Albert. Municipal Government in Great Britain. New York, The Macmillan
and Co., 1901.
Thompson, W . The Housing Handbook. London, 1903.
■
--------- Housing Up to Date. London, 1907.
Year Book of Social Progress. Edinburgh, 1914.







HUNGARY.
INTRODUCTION.

Government housing work in Hungary is of recent development,
relatively little having been done before 1909. It has been taken up
by the State, by municipalities, and by the communes. Hungary
being predominantly an agricultural country, a large share of the
governmental activity has been directed toward improving housing
conditions among the agricultural laborers, where the conditions were
particularly bad.
Governmental activity has taken shape in: (1) Tax exemptions
-and reductions on houses built for laborers and others; (2) State sub­
sidy to municipalities and communes engaged in housing work; (3)
erection by the State of low-cost dwellings for rent in the cities;
(4) erection by municipalities and communes of low-rent houses for
persons of limited means; (5) subsidies and exemptions from taxes
to employers who erect suitable and healthful houses for their
employees; (6) loans to building associations which agree to con­
struct low-rent or low-cost houses for workmen; and (7) grants of
public land by both State and municipalities.
TAX EXEMPTIONS AND REDUCTIONS.

Tax exemptions are reported to have been of considerable benefit
in promoting housing work, but it is claimed that legislation on the
subject has been rather incidental and lacks uniformity. In 1870 a
law was passed, some sections of which allowed permanent exemp­
tion from taxes to dwellings allotted without charge to industrial and
agricultural laborers by their employers. In 1907 the law was ex­
tended to grant permanent exemption from State taxes on all com­
pany houses complying with the sanitary laws and built to be rented
or sold on easy installments to workmen. Also a provisional exemp­
tion for 20 years from State, municipal, and certain communal taxes
was granted to new houses to be sold or rented to workmen either by
employers or others engaged in housing work. Furthermore, by a
law passed in 1909 the exemption from State taxes was extended to
houses built by municipal authorities as long as they continue
municipal property, the exemption ceasing when the workman has
paid the last installment of the purchase price.
Under this last law three cities have taken advantage of the
privilege accorded, besides asking for additional State subsidies.




349

350

B U L L E T IN

OF T H E BU REA U OF LABOR STATISTICS.

Prior to the law of 1909, however, insignificant results seem to have
been obtained, particularly as far as the building associations were
concerned. This lack of any real results from the early State tax
exemption laws may, however, be explained by the fact that nearly
all the larger cities granted tax exemptions on newly erected buildings
for 15 or even 18 years.
Tax-exemption legislation has been rather more productive of
results in Budapest than elsewhere. The law relating to the devel­
opment of the capital (No. 48 of 1908) granted permanent exemption
from payment of the building tax on all dwellings erected by the
municipality on its own account, without distinction as to whether
these dwellings are erected for rental to employees of the city, to
other workmen, or to persons who do not belong to the working
class. The dwellings remain exempt from taxation only as long as
the income from their rents does not exceed their actual maintenance
costs, such costs, in the meaning of the law, including interest on
the value of the ground, interest and refund on the cost of the build­
ing, and ordinary maintenance and administration. In this connec­
tion, interest on the value of the ground may not exceed 4 per cent,
while the other costs may not exceed 17.6 per cent of the cost of the
building.
The new building tax law also reduced the rate of the rent tax
for Budapest from 17.6 per cent to 16 per cent. For those com­
munes with less than 15,000 and more than 1,000 inhabitants, the
rate of the rent tax was reduced to 11 per cent, and for those with
less than 1,000 inhabitants to 9 per cent.
BUILDING OPERATIONS OF THE STATE.
WORKMEN’S COLONY IN KISPEST.

The excessive scarcity of low-rent dwellings in the capital of
Budapest and the social discontent created by it not only caused
extensive building operations by the municipality on its own account
but also induced the minister of finance to introduce a bill in Parlia­
ment which provided for the erection of workmen’s dwellings by the
State. Parliament recognized the need for such action and in 1908
enacted a law (No. 29) which authorized the expenditure of 12,000,000
crowns ($2,436,000) by the ministry of finance for the erection of
dwellings for employees of the State, and, as far as possible, also for
workmen in private employment. The ministry purchased about
472,000 square klafters (419.5 acres) of land in the suburb of Kispest,
at a cost of $1,485 per acre and 213,000 square klafters (189.3 acres)
in the tenth ward of Budapest, at a cost of $1,827 per acre. Building
operations were first started in Kispest, and in the short period,
1908-1913, a garden city housing 3,535 families, or about 18,000




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351

persons, “ as built up. The colony will ultimately house about 4,200
w
families. The houses which contain from 2 to 12 family dwellings
are set well apart. A garden plot of 50 to 60 square klafters (0.4
to 0.5 acre) goes with each two or three room apartment. The rents,
which were fixed so as to return an income of only 4 per cent on the
capital invested, range from 220 to 260 crowns ($44.66 to $52.78)
per year for a two-room apartment up to 330 crowns ($66.99) for a
three-room apartment.
The dwellings were rented exclusively to factory workers, including
those employed in State establishments, who were given preference,
as directed by the law.
The complete program of the housing work for the city contem­
plates the erection of 8,000 to 10,000 apartments, which it is calcu­
lated will increase housing accommodations 5 or 6 per cent.
HOUSING WORK IN BUDAPEST.

Budapest, frequently termed “ the Chicago of E urope/’ because of
its large grain and live-stock trade, is a rapidly growing city, where,
as a consequence, considerable crowding has taken place among the
population. The tenement seems to have been the prevailing type of
house. Rents were excessively high until the city started building
houses on its own account. Figures prepared by the director of the
city statistical office in 1906 showed that rents in Budapest were higher
than in any large German city.1 Furthermore, they showed that
52.8 per cent of all available apartments on May 1, 1906, consisted of
only one room, and that 64.95 per cent of the population of the city
was housed in one and two room apartments. In the suburbs where
the workmen are largely housed, 70 per cent of the apartments were
one-room affairs. Only 39 per cent of these one-room apartments
were occupied by 3 persons or less, while 61 per cent were occupied
by more than 3 persons.
Housing conditions during the period 1906 to 1910 were even worse,
so much so as to lead to turbulent public meetings and strikes on the
part of tenants and boycotts of landlords. This led to a unique
method of making leases, by a system of collective bargaining,
whereby the tenants of large apartments sought collectively to make
the terms of their leases.
In March, 1909, a special meeting of the city council considered apian,
proposed by its mayor, of investing 95,000,000 crowns ($19,285,000)
in municipal housing and building for a period of five years. On
the basis of this proposal, the city council voted the following credits:
2,300,000 crowns ($466,900) for the erection of emergency dwellings,
large dormitories, lodging houses, and homes for single persons;
1 International housing congress, 9th , Vienna,
Wohnungskongress, Vienna, 1911. Part 1, p. 199.




1910.

Bericht

uber den I X .

Internationalen

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B U L L E T IN OF TH E BUREAU OF LABOR STATISTICS.

10,000,000 crowns ($203,000) for the erection of dwellings with small
apartments, to be rented at cost; 10,000,000 crowns ($203,000) for
the erection of apartment buildings for the middle classes, the renting
of which should bring in a suitable interest on the capital invested;
and, finally, 10,000,000 crowns ($203, 000) for the erection of schools
and kindergartens. The minister of the interior approved this build­
ing program of the city, except that part of it which provided for the
erection of apartment buildings for the middle classes, because, in his
opinion, the erection of such houses with funds of the city went be­
yond the proper limits of public-welfare housing work by the com­
munes, and because such building operations, he thought, would be
unwise competition with private