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Nonprofit Housing Projects
in the

United States

Bulletin 7\[o. 896


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L. B. Schwellenbach, Secretary
Ewan Clague, Commissioner


Nonprofit Housing Projects
in the

U nited States

B u lletin J^io. 896

For sale by the Superintendent o f Documents, U. S. Governm ent Printing Office
Washington 25, D . C. - Price 25 cents


Letter o f Transmittal

U nited States D epartment of L abor,
B ureau of L abor Statistics ,

Washington, D. C., March 20,
T he Secretary


L abor :

I have the honor to transmit herewith a report giving a detailed description of
20 housing projects in which self-help or cooperative methods were used. They
are given here as a means of practical assistance to similar projects elsewhere.
The report was prepared by Florence E. Parker of the Bureau’s Labor
Economics Staff. The Bureau also wishes to acknowledge with thanks the
cooperation of the many persons connected with the projects here described,
who gave freely of their time and information.
E w an Clague,

H on . L. B. Schwellenbach ,

Secretary of Labor.


Bulletin A[o. 896 o f the
U n ited States Bureau o f Labor Statistics

The present report is a revision of an earlier one (now long out of
print), with additional material on later developments and procedures.
The 20 nonprofit housing projects here described were selected as
representative o f varying methods of sponsorship, of techniques of
financing, or o f other procedures, or because they illustrated mistakes
to be avoided. The dwellings provided in these projects ranged
(prewar prices) all the way from a $500 structure, 24 by 24 feet, with
no modern conveniences except running water, through a modest
$3,500 to $4,000 dwelling, to terrace apartments and housing costing
up to $6,500.
In all except two cases each association has actually provided living
quarters for its members. The exceptions were included because they
were examples o f (1) cooperative action under an urban redevelop­
ment law, and (2) unusual membership arrangements.
It is hoped that the presentation will be helpful to groups interested
in the joint provision o f housing on a nonprofit basis. The methods
used in the projects which form the subject matter of this report are
adaptable to other projects, but interested groups should consider them
from the point of view of their own needs and circumstances.
Although some consideration is here given to methods of financing
and sources o f funds, the treatment of these matters is by no means
complete, and the reader is urged to study also the National Housing
Agency’s manual, entitled “Mutual Housing—A Veteran’s Guide,” ob­
tainable from the Superintendent o f Documents, Government Printing
Office, Washington 25 D. C., at 15 cents a copy. Other points to be
considered are possible unpaid taxes, liens, or special assessments
against the property, and building-code restrictions regulating the
-type and cost of buildings in the area considered.
Proper procedures in establishing a housing cooperative are set forth
in U. S. Bureau o f Labor Statistics Bulletin No. 858 (Organization and
Management of Cooperative and Mutual Housing Association), obtain­
able from the Superintendent of Documents at 20 cents per copy. This




pamphlet covers considerations regarding selection of land, architect,
building plans, and contractor, as well as the financing and operation o f
the completed project. Appendixes give model by-laws, sample sharesubscription agreement, model lease, citations of cooperative and hous­
ing laws, etc.
The extent to which the cooperative approach is used is optional
with the members; cooperation may begin and end at any point they
choose. The members may combine for the purchase and/or division
of the land only, after which each member carries on for himself.
They may also furnish themselves community facilities, architectural
service, and even title insurance. They may decide upon joint pur­
chase o f materials and contracting for construction, or joint action
through the entire construction stage, hiring the work done or doing
some or all o f the work themselves either by the exchange of labor or
by each member working on his own home. They may decide that,
having cooperated at certain points, they will stop there, giving each
member title to his dwelling and unrestricted control of it thence­
In some cases cooperative activity may begin only after the com­
pletion of the project. The members who will occupy the dwellings
may participate actively in every step from the very beginning in
some projects, while in others they may benefit passively by the activ­
ities o f the sponsoring organization, in which (up to the time o f their
taking occupancy) they had little voice.
Some hardy groups are willing to follow the cooperative method
in all the steps up to and including that final test—joint permanent
ownership of the project by the cooperative association. Others have
started on that basis, but were defeated by inability to obtain financing
or by the lack of thoroughgoing acceptance o f the cooperative method
by members who desired to own and control their domiciles indi­
In some cases cooperation is carried on informally, in others through
the medium of a regularly incorporated association which may be
continued indefinitely or dissolved when its purpose has been served.
It will be apparent, from this report, that housing is a complicated
process which calls for much patience, good technical advice and assist­
ance, and competent management at all stages. Innumerable factors
will call for a succession of decisions by the membership, upon the
wisdom o f which the success of the entire project may depend. As
regards site, unimproved low-cost land may turn out to be very expen­
sive after the cost of installation o f utilities is included. Means and
cost o f transportation and convenient access to shopping facilities are
other factors which should be considered. The probable cost o f the



completed dwellings should be predetermined with some accuracy, so
that the prospective member may consider it in relation to his family
income, resources, and prospects. Some stability o f prices is essential
here. In times, like the present, when prices are either rising rapidly
or show indications o f a sudden fall, the group should proceed cau­
tiously or postpone action.
Above all, the housing association should not undertake too large a
burden, especially at first, of luxury items or of community amenities
(such as auditorium, gymnasium, swimming pool, stores, nursery,
etc.), and so avoid getting in over its head. I f space is left, these can
be provided at a later time when resources are available and the asso­
ciation has proved itself financially. Many a group has eventually
lost its equity by undertaking more than its members had the financial
ability to carry through.




Cover picture: Courtyard scene at Amalgamated Housing Project, New
York City.
Chapter I.— Introduction_______________________________________________
Sponsorship of projects-------------------------------------------------------------------Membership considerations-------------------------------------------------------------Financing__________________________________________________________
Nonprofit aspects__________________________________________________
Members financial interest_____________. . . . _______________ _______ _
Protective measures for association and members___________________
Cooperative accomplishments---------------------------------------------------------Present cooperative sources of assistance-----------------------------------------Technical assistance-----------Building supplies______________________________________________
Possible avenues of further development____________________________
Sources of funds_______________________________________________
Provision of technical service-------------------------------------------------------Chapter II.— All-the-way cooperative housing-------------------------------------------Amalgamated housing projects, New York City_______________________
Location and description of buildings_____________________________
Legal status and financing-----------------------------------------------------------Cost and conditions of membership_______________________________
Community and cooperative activities___________________
East River Cooperative Apartments, New York C ity__________________
Method of procedure__________________________________________
The buildings____________________________________________
Cost to individual member_______________________________________
Present status of project_______________________________________
Group Housing Cooperative, Washington, D. C _____________________
Procedure for sponsored projects_______________________________
Bannockburn project___________________,---------------------------------Conditions of membership------------------------------------------------Our Cooperative House, New York City---------------------------------------------Financing_____________________________________________________
Termination of the project-------------------------------------------------------United Workers’ buildings, New York City-------------------------------------Conditions of membership_____________________________________
Cooperative and communal features___________________________
Labor policy_____________________________________________
Financing and fate of the project-------------------------------------Chapter III.— Cooperation in ownership and management— the “ mutual”
West Acres, Pontiac (M ich.)----------------------------------------------— ------Public mutual housing projects_____________________________________ .
Greenmont Village, Dayton (Ohio)_______________________________
Walnut Grove Village, South Bend (Ind.)------------------------------------Chapter IV.— Housing with self-help features___________________________
Penn-Craft (Pa.) Community------------------------------------------------------------Selection and characteristics of homesteaders_____________________
732230°— 47------2




Chapter IV— Continued
Penn-Craft (Pa.) Community— Continued
The homesteads_______________________________________________
Financing, and terms of contract---------------------------------------------Labor supply, and terms of the “ labor loan” ___________________
Evolution and present status of the community________________
Accomplishments and problems of the community_____________
Iona (Idaho) Self-Help Cooperative________________________________
Conditions of loan_____________________________________________
Other joint activities__________________________________________
Oakwood Community, Chapel Hill (N. C .)_________________________
Watsonville (Calif.) project________________________________________
First group of dwellings_______________________________________
Procedures for later groups____________________________________
Self-help features and procedures______________________________
Chapter V.— Other joint housing projects_______________________________
Sponsored by cooperative housing associations______________________
Crestwood Community, Madison (Wis.)________________________
Community lay-out_______________________________________
Financing of community services__________________ ^______
Cost to individual member________________________________
Types of dwellings________________________________________
Present status of association_______________________________
Extent of cooperative enterprise___________________________
St. Paul (Minn.) housing project_______________________________
Financing and procedures_________________________________
Cooperative activities_____________________________________
Minneapolis (Minn.) housing project___________________________
Finances and procedure___________________________________
Cost to individual member________________________________
Sponsored by labor organizations___________________________________
Carl Mackley Apartments, Philadelphia (Pa.)__________________
Housing and community facilities_________________________
Selection of residents______________________________________
Cooperative activities_____________________________________
Administration and finances_______________________________
Stonewall Heights, Front Royal (Va.)__________________________
The local housing situation_______________________________71
Problems encountered_____________________________________
Conditions of sale, and price of dwellings__________________
Tulsa (Okla.) Building-Trades Council project_________________
Other sponsorship__________________________________________________
Garden Homes Co., Milwaukee (W is.)____ - ____________________
Background and operation of the project__________________
Fate of the project________________________________________
Building-guild experiment, Suffern (N. Y .)_____________________
Procedures involved______________________________________
How the guild system operated____________________________
Results of the experiment_________, _______________________
Appendix A.— Movable forms used in laying stone walls at Penn-Craft__
Appendix B.— Housing supplies and services available through coopera­
tive wholesale associations____________________________________________
Appendix C.— Selected list of references on housing_____________________


Nonprofit Housing Projects in the
United States
Chapter I.— Introduction
Until comparatively recently, cooperative housing in the United
States was limited almost entirely to apartment houses which had been
built or purchased by cooperative associations. During the few years
preceding W orld War II, several cooperative developments providing
single-family dwellings were launched, and many more are now being
planned; some o f the latter have acquired land, but few (except those
o f veterans) have been able to secure the necessary authorizations to
enable them to start construction. A recent development has been the
formation o f mutual home-ownership associations to purchase and
operate housing built by the Federal Government for war workers
but designated for mutual ownership at time of construction. In
other cases veterans’ cooperatives have bid in projects put up for sale
by the Federal Public Housing Authority.
Together, these projects form a significant development in the field
o f low-cost nonprofit housing. The present report describes 20 of
these, selected as illustrative o f procedures which are applicable to
other projects or of mistakes to be avoided. Four projects illustrate
all-the-way cooperative housing, the cooperative being responsible for
all the steps through completion of the dwellings, and retaining per­
manent title to the property. In two, the association had no hand in
the preliminaries or in construction, but took over a finished project.
Self-help was the significant feature in four, with the members doing
a considerable part of the construction labor themselves and receiving
title to their properties on completion of the project or of payment.
The others involve the development of a new community, complete
with streets and public utilities; varying degrees o f participation by
labor organizations; a building-guild experiment to provide annual
earnings to building-trades workers as well as houses for the members;
and certain rather uncommon financing methods.
It is believed that the value of the report lies in its detailed descrip­
tion o f varying procedures and techniques—all capable o f use in other

Sponsorship of Projects
The projects described were carried on under various types of spon­
sorship. Four were sponsored by one or more labor organizations.
In one case the sponsor was a clothing-trade union, in two a textile




union, and in the fourth the unions belonging to the city buildingtrades council. In three cases, some union funds were used for vary­
ing periods; in the fourth, the labor organization advanced no money,
but it did act as sponsor and guarantor of the building project.
Cooperative associations without any outside sponsorship carried
through five o f the projects, and the same procedure is expected in a
sixth. In other projects a university employees’ association, a city
housing commission, a religious service organization, a private citizen,
a United States Senator, and a foundation acted as sponsors.

Membership Considerations
Housing associations have sometimes been criticised on the ground
that they usually have restrictions on membership. A few associa­
tions have admitted only members of the sponsoring group. Generally,
however, at the start membership is open to all persons interested in
providing themselves with dwellings on a nonprofit basis. It is closed
only after the project is finished and the dwellings are occupied;
thereafter membership is limited to the member-owners. This is done
for practical reasons. The activities of most associations have been
limited to one project. Once this is completed, the chief function there­
after is the management of the project and possibly of collateral co­
operative activities (store, tea room, nursery, etc.). Nonresidents are
not generally interested in becoming members of an association which
provides them no benefits and, even if they were, the residents probably
would not welcome nonresident participation in running their com­
An arrangement, whereby resident control o f dwellings as well
as open membership in the cooperative is assured, has been worked
out in one project. There any person interested in cooperative housing
may join the parent association, which is a sponsoring and develop­
ment organization. In each project developed by it, the residents are
members of a separate community organization through which they
operate and control the property, at the same time retaining their
membership in the parent association.

Several o f the projects illustrate financial participation by public
authorities at Federal, city, and county levels.
One was the first building project of the Federal Public Works
Administration after its establishment in 1934; this was a self-liquidating arrangement.
In the mutual home-ownership projects all the steps of land acqui­
sition, community lay-out, and construction were carried out by the



Federal Government, using funds provided by Congressional ap­
propriations. The cooperatives entered the picture only at the end
o f W orld War II, when the Government began to dispose of war
housing. No subsidy was involved, as “ economic” rentals were paid
by the residents during Federal operation, and the property was
purchased by the cooperatives at sums fixed by appraisers as repre­
senting its current value.
A different type of Federal financing was represented in one project.
In that case the remainder o f Federal funds that had been provided
under the various relief acts, for the assistance of self-help activities
carried on by the unemployed during the depression, were turned
over to a State agency. The housing loans, made by the State agency
from this money to the cooperative members, were also self-liqui­
dating. Although self-help projects of various kinds were carried
on in many States, with grants from Federal, State, and sometimes
county and municipal funds, this project is the only one to the Bureau’s
knowledge in which loans were made for housing.
City assistance in various forms is involved in one case, in which
apartments are being constructed under the New York State Re­
development Companies Act.1 For the purpose o f encouraging slum
clearance and the construction of good, low-cost housing, the act offers
organizations which meet its requirements (rentals not to exceed speci­
fied amounts and limited return on investment) the advantages of land
prices reduced through condemnation and the exemption of all im­
provements from taxes for a period of 25 years. In this particular
project the city will also assist by widening adjoining streets and by
improving and enlarging two neighborhood playgrounds and a nearby
public school.
The one instance o f city and county participation in the financing
o f housing in this country, which has Come to the attention o f the
Bureau, was a project carried on some 20 years ago. Under a State
law which is still on the statute books, city and county authorities
invested funds under their control in the preferred stock o f the housing
enterprise. No element of public subsidy was involved, however, for
interest was paid on the stock, which was retired as the tenant-owners
paid for common stock to replace it. This method of financing hous­
ing has been rather common in Europe.

Nonprofit Aspects
Practically all o f the projects here described were on a nonprofit
basis. Leaders and sponsors contributed their time at all stages.
Some architects reduced their charges in consideration o f the size of 1
1 Similar legislation has been enacted in some 20 States.



the job, others because they were in sympathy with the aims in view.
Contractors worked either on a flat fee or a percentage and some on a
profit-sharing arrangement. Materials, equipment, and even furni­
ture were bought at substantial savings.
Much work was done by the members themselves. Clearing and
grading the land, cutting the streets, excavating for basement and
septic tank, pouring concrete, making building blocks, quarrying and
shaping building stone, laying subfloors, making interior trim, other
inside carpentry, laying the sheathing for the roof, interior and ex­
terior painting—these were some o f the processes done by the members.
As the occupants of the dwellings benefited from all of these factors
in terms of both money and quality of materials and workmanship, it
would be expected that they would take steps to insure the continuance
o f the nonprofit feature.
In associations adhering strictly to cooperative principle the member
is given not a title to an individual dwelling but stock in the association
or a certificate o f indebtedness. A withdrawing member turns his
stock back to the association either at par or an amount arrived at by
appraisal which takes into consideration depreciation and current
market conditions. This central-ownership arrangement has the dis­
advantage that no member can dissociate himself from the project
unless he is prepared to withdraw from membership altogether.
A ll sink or swim together and, unless a sufficient prepayment or reserve
has been built up, this may be fatal in times o f depression when a large
proportion of the members are unable to meet their payments. Under
good, far-sighted management, however, the central-ownership
arrangement has the advantage that the cooperative community is pre­
served, group control prevents neighborhood deterioration, and no
member can cash in on the previously donated work o f others or on
unusual market conditions—a situation almost impossible to control
if fee-simple title is granted, as has been amply demonstrated in the
experience o f the projects here covered.
In a majority o f the projects the agreement between the housing asso­
ciation and the member carried a limitation on the member’s right to
dispose o f the dwelling occupied by him. In most instances a member
desiring to withdraw and dispose o f his holdings was required to give
the association an opportunity to redeem his equity. I f it failed to do
so within a specified time, he was at liberty to transfer it to a pur­
chaser acceptable to the association.
In some cases the provision was a dead letter, because the association
had no funds with which to redeem the member’s equity. In others, the
association had given the member fee-simple title to his dwelling and
could not enforce the withdrawal provisions.



The war years o f extreme labor mobility, high prices, and scarcity
o f housing put a severe strain on the members’ acceptance of the non­
profit principle. Often the temptation to profit by selling out at high
prices proved to be more than they could withstand. Thus, in St. Paul,
according to a late report, giving of title “left the door wide open for
speculation.” Some houses were sold three or four times, each time at
a higher figure. The cooperative spirit in which the homes were un­
dertaken disappeared. The housing association is still (December
1946) in existence, but is dormant, and the former president states that
it plans no further construction. Other cooperative activities which
were tried could not thrive in this atmosphere and also died o f
In Penn-Craft (P a.), although it was expected that the isolation o f
the community would limit the sale o f properties at high levels, ex­
perience demonstrated the advisability of restrictions. Some restric­
tions were therefore incorporated in the lease, requiring approval by
the association o f any sales. In Watsonville (C alif.), by 1946 there
had been almost complete turn-over of occupancy—the process having
been hastened by the original residents’ fear o f possible bombardment
by Japanese submarines (Watsonville is a coastal town) and by war­
time employment opportunities elsewhere. At Front Royal (V a.),
almost before the houses were completed one dwelling had been sold by
a member, at a $2,000 profit. Among the described associations in
which individual title rests with the member, Crestwood (W is.) ap­
pears to have been most successful in retaining its original group in­
tact. Several houses had been sold but none, it is said, at dispropor­
tionate prices; those houses the asking prices for which were regarded
as exorbitant remained unsold as a result o f adverse community
As would be expected, projects o f the apartment-house or multifam­
ily type have made most use of the lease-stock arrangement because o f
the difficulty o f giving title to a single apartment or dwelling unit.
During the depression, most of the genuine apartment-house coopera­
tives (including many not described here) weathered the storm suc­
cessfully. Others, however, lost their buildings through foreclosure
and in still others, which either had no restrictive provisions or did not
enforce them, there was a considerable turn-over o f membership
through transfer o f shares. The lease arrangement is a feature o f the
mutual plans at Dayton (Ohio) and South Bend (Ind.), which are
both o f such recent origin as to make appraisal o f ultimate success
impossible. The Amalgamated group, with an experience covering
some 20 years, has been outstanding in its financing, management, and
preservation o f cooperative principle and spirit.



Member s Financial Interest
In the Amalgamated buildings, where the cost averaged about $1,500
per room, the member had to make a down payment of $500 per room.
In the East River Cooperative Apartments, the member’s required
equity is also $500 per room, or about 20 percent; and in Group Hous­
ing Cooperative, it is expected to be 15 to 20 percent. In most of the
projects here described, however, each member was required to have
an initial equity amounting to about 10 percent. This is the minimum
proportion required for F H A insurance (utilized in at least five of the
projects). The same requirement was imposed at Front Royal, as well
as in the Milwaukee project (which long antedated F H A insurance).
One leader believes that 10 percent is the very minimum for safety and
for insuring sufficient member interest in making the project a going
concern. Some confirmation of his opinion is found in the experience
o f the United Workers’ project (New York City) and in other asso­
ciations not here described. From United Workers members, only
$250 per room was required—$125 at time o f joining and $125 within a
year. This underfinanced association was never able to meet its ob­
ligations and the project was finally taken over by the creditors.
In the Wagner-Ellender-Taft housing bill, which was considered in
the 79th Congress but failed to pass, mortgage insurance on 95-percent
loans was proposed for mutual-ownership projects, with the members
providing only 5 percent of the total cost. For housing built under
the Lanham Act and designated for mutual home ownership, no down
payment o f any kind was required. However, under the latter plan,
the amortization amounts included in the rents paid during the 2-year
probational period were credited as down payment when the contract
of purchase was entered into at the end of that period. In a sense,
therefore, although no cash payment is required of the member, when
the home-ownership corporation takes over the property from the
Federal Government he has already (through his monthly rental)
made some payment on principal. Some observers, however, question
whether this is a sufficient investment to make him work very hard for
the survival of the project as a cooperative.

Protective Measures for Association and Members
One o f the best protections is the building up of mortgage prepay­
ments. Such prepayments provide a cushion against disasters. This
has been done by several o f the associations here described. The
mutual housing associations have an arrangement under which
the individual members pay off their indebtedness at a faster rate
than the association itself, thus building up reserves in the treasury o f



the latter which can be drawn upon when needed. In one self-help
project the agreement between member and association relates the
monthly payments to the family income. In prosperous times the fam­
ily pays its loan as fast as it can; in hard times, when income falls, its
payments (subject to a prescribed minimum) may be sharply reduced.
„ Various types of insurance—formal and informal—have been used
also, to protect the participating families and incidentally the whole
project. In one case, group insurance was obtained, covering the obli­
gations o f families whose breadwinner died or was totally disabled
before completing payment. Another had a “widows’ insurance”—an
informal plan under which each member made a yearly contribution
proportioned to his unpaid obligation. In a third case, all the members
voluntarily contributed to a fund from which to pay all or part of
the monthly payments o f families in distress or of drafted men.

Cooperative Accomplishments
Among the accomplishments of cooperative action in the projects
here described were the following, each of which resulted in sub­
stantial savings for the membership:
1. Land acquisition, provision of public utilities, and complete
community planning.
2. Integrated architectural and contractual services. In this way
2 percent on construction was saved in two cases, 1 percent in
3. Title insurance, and use of a master title to land.
4. Bulk purchase of materials and furniture and/or equipment.
On the former, savings were estimated at about $200 per house in
one case; on the latter, two associations saved 25 percent.
5. House construction on contract or by exchange of labor. This
saving cannot be evaluated, but is known to be great.
6. Permanent operation and maintenance of some or all of the
property. Mutual-ownership projects are notable for their economy
of operation.
7. Tax savings, made possible by group operation under urban
redevelopments acts or under limited-dividend statutes, resulting in
a saving of $30,000 per year in one case.
8. Interest savings by collective bargaining, resulting in savings of
$97,865 in one case, $900 per year in another, and over $2,700 per
year in a third.
In one case, it was estimated that savings on land, wholesale pur­
chase o f materials, effective use of labor, and elimination of speculative
profit saved as much as $1,500 per house.
732230°— 47-



Present Cooperative Sources of Assistance

The National Cooperative-Mutual Housing Association was formed
on the authorization of a conference of local housing associations, held
in May 1946. It was represented at the Congress of the Cooperative'
League, in September 1946.
Although the association is still in its infancy, its plans cover a
wide range o f activities, including the provision of technical service,
accounting, the training o f project managers, etc. Structurally, it
will probably be a federation of regional associations, which will in
turn be composed of State federations of local associations.
Already one regional organization has been formed: the North
Central States Housing Association, organized in November 1946.
It plans to provide assistance on “legal questions, site planning, pro­
motion, and education,” in its territory—Indiana, Michigan*, and
Minnesota. The consensus of the meeting that established the organi­
zation was that purchases o f building materials should be made
through regional cooperative wholesales wherever possible; also that
housing associations should help to finance the production of such
materials by National Cooperatives (the national commodity
Very few o f the cooperative wholesales offer technical advice or
assistance. Among these few are Eastern Cooperative Wholesale,
which has a full-time housing adviser who is himself an architect;
Associated Cooperatives of California which provides advice on
organization procedure, legal questions, and land surveys; Midland
Cooperative Wholesale which offers assistance in organizing; and
Consumers Cooperative Association which provides building plans
and specifications, advice on building materials, and legal assistance.
It is evident from the above that the distributive cooperative move­
ment has hardly made a beginning in this much-needed service. How­
ever, with the development of the central housing federations, it is
probable that most of the technical assistance will be provided by the

The Cooperative Congress in September 1946 by resolution urged
National Cooperatives to establish “ a strong division for the pro­
curement o f housing materials and supplies.” The latter organization
has for some years handled galvanized and asphalt roofing, cedar
shingles, and nails. Since the 1946 Congress, it has been exploring
the possibilities of prefabricated houses, millwork, steel shafts, wall
board, bathroom tile, and numerous other items. The expansion and



coordination o f existing productive facilities is also being considered,
as is likewise the purchase or lease of lumbering facilities in the'West,
in order to help supply the member regionals.
Paint, shingles, and lumber are produced by some of its members
(regional wholesales), either in their own factories or in those owned
jointly with other cooperatives. Thus, the International Cooperative
Lumbering Association, the members of which are seven regional
wholesales in the United States and four in Canada, produces redcedar shingles. Indiana Farm Bureau Cooperative Association owns
six sawmills and Consumers Cooperative Association (Missouri) owns
On the West Coast, Associated Cooperatives of California opened a
building-supply department January 1, 1947. The association has
made a loan to a small lumber mill, in return for the purchase rights
to all its output. One housing association in its territory had already
joined the wholesale by the end of 1946, and others had indicated their
intention of doing so.
In Indiana the 60 county cooperatives which are members of the
Indiana Farm Bureau Cooperative Association (the wholesale) all
have lumber yards, the supplies for which come from the wholesale
association. Most o f them also offer a roof-applicating service and
spray-painting service. The wholesale itself, as noted, owns six saw­
mills, is part owner of the red-cedar shingle mill of the International
Cooperative Lumbering Association, and is helping to finance other
lumber acquisitions in the West. In addition to lumber, it handles
steel, and (in cooperation with Purdue University) is promoting a
homestead-improvement program.
Central Cooperative Wholesale carries a complete line- of building
materials; and many such supplies may also be obtained through
Eastern Cooperative Wholesale. (For a list of supplies and tech­
nical services available through the cooperative wholesales, see A p­
pendix B, page 85.)
In addition, there are possibly 100 farmers’ cooperative lumber
yards and hundreds o f other retail cooperatives throughout the country
which handle lumber and certain other building materials and supplies
as part o f a general retail business.

Possible Avenues of Further Development

The experience of the projects here described suggests several pos­
sible sources of financing which might be developed. Union funds
form one such source. No individual labor organization would wish
to tie up any considerable amount of its resources in housing. How­



ever, in the aggregate, the money controlled by unions in this coun­
try is considerable. One leader in cooperative housing, who is also
a man o f union background and experience, suggests that diversion
to housing o f even as little as 5 percent of each organization’s funds
would be o f inestimable help. A central agency, formed for the
purpose on a local or State basis, could use the money so raised as a
revolving fund from which to make construction loans and loans for
member equity. This would give the initial shove for projects that
might otherwise never be able to get started. The agency could be
formed as a regular corporation, or preferably as a cooperative, with
the contributing organizations as members which would hold stock
in the amount o f their contributions. This procedure has already
been used in Tulsa, Okla., where a small building project was financed
through a corporation in whieh members of the city building-trades
council took part.
Members of regional cooperative wholesale associations might also
vote to invest some of their patronage refunds from the central or­
ganizations in this central agency or in a similar fund. With the
increasing collaboration between labor organizations and coopera­
tives, such a joint enterprise could easily be worked out.
The National Cooperative Finance Association was formed in 1943
to coordinate the resources of the consumers’ cooperative movement
and to assist in financing cooperative enterprises. Its membership
consists o f eight regional wholesales and National Cooperatives. The
finance association was urged by the 1946 Cooperative Congress to
“ organize immediately a program which will make mortgage credit
available to cooperative and mutual housing associations.” There
are some possibilities in this direction.
Credit unions are another potential source o f financial assistance
for housing. In a number of States these associations are permitted
to make loans on the security of real estate; the same is true of asso­
ciations organized under the Federal Credit Union Act, but the period
o f such loans is limited to 2 years. In States where this is not per­
missible, loans might be made on the basis of other security. Also,
some o f the laws authorize the making of loans, secured only by
the signature and good faith o f the borrower, up to $100 and even in
some States $300. Although these are small amounts, they would be
helpful in cases where only a simple dwelling is concerned and much
if not most of the work is done by the family, on a self-help basis.
In other cases, such amounts could be used toward the member’s
down payment.
The Metropolitan Life Insurance Co. has made numerous loans for
housing purposes, the Mutual Life Insurance Co. made one to an
association herein described, and probably many other similar or­



ganizations have also done this. Among cooperative insurance com­
panies, at least one group—the five companies operating under a
unified system in Wisconsin and Minnesota—makes loans, to members
o f cooperative associations, for housing. Where the insurance laws
permit, this would seem to be another good use for accumulated
insurance assets.
Building and loan associations, savings banks, and G I loans are
obvious sources. The last-named undoubtedly will be utilized more
effectively when regulations are worked out whereby the Veterans
Administration guaranty can be applied to a cooperative project as
well as to dwellings individually financed. I f legislation along the
lines proposed in the Wagner-Ellender-Taft bill is enacted, 95-percent
mortgage insurance would be available to cooperative and mutual
housing projects, thus facilitating the obtaining of funds from the
regular lending agencies.

Undoubtedly, one of the major needs of the new housing groups—
and one that most o f them lack—is that o f competence in the technical
matters o f law (incorporating the association, searching titles, draw­
ing up and closing the land-purchase and building-construction con­
tracts, etc.), selection o f qualified architects and contractors, as well
as accounting and possibly engineering service.
Such specialized knowledge should be available to cooperatives
throughout the country. It could be furnished as part of the con­
sumers’ cooperative movement, through State, regional, or the national
federations, or could be supplied through an independent association
o f professional technicians operating as a workers’ productive associa­
tion. It has been suggested that a national association o f technicians
(experts in accounting, finance, law, architecture, etc.) be established,
with branches in various parts of the country. Such an organization
could enroll in its membership socially minded persons in the above
professions— all available at designated local establishments.
An organization of the latter type, but on a local scale, was actually
incorporated in Washington, D. C., just before the beginning of the
war. This “housing producers’ cooperative” was started with the idea
of enlisting the services of local professionals who would furnish
services in all the various lines needed in building a house. This
association never went into operation, as the war stopped private
building. Similar organizations are feasible, however, and might be
formed where the appropriate professions are or can be interested in
the idea.
To get such a service into actual operation, however, presupposes
some organizing drive and a source from which such a drive can



emanate. For this reason, if technical service is to be made available
on either a local or national basis, it is more likely that the motivating
force will come from the consumers5 cooperative movement rather
than from the professions themselves.
I f this is true, then undoubtedly the cooperatives would prefer that
such service be provided as one arm o f the consumers5 movement
rather than as a producer function.
Ultimately, it seems probable that this service will be furnished by
cooperative associations in the housing field. In that case, as is usual
in the consumers5cooperative movement, initiative will come from the
local housing associations, which can (and have the duty to) make
available for the benefit of new groups what they themselves had to
learn by trial and error. This they can do by organizing on a State,
regional, and national basis and establishing in these federations
departments charged with providing technical assistance.
A t present the available machinery consists of a national association
(just getting under way) at the top and local associations at the bot­
tom. Except for one regional association (also new) there is as yet
no intermediate organization. Reports indicate, however, that with
housing groups springing up all over the United States, federation
should not be too far in the future.

Chapter II.— All-the-Way Cooperative Housing


Amalgamated Housing Projects New York City
The Amalgamated Clothing Workers o f America was the first o f
the labor unions to take an active interest in providing better housing
for wage earners at lower rentals through the cooperative method. At
the very beginning, however, the sponsors o f this activity realized that
a housing project should not be confined to members o f one industry
or one labor organization.
The cooperative housing idea was first broached at the 1924 con­
vention o f the union, but no definite action was taken until April of
the following year. Prior to the convention members o f the union,
who were also active in the organization’s credit union, formed the
A. C. W. Corporation1 to provide themselves with housing on a
cooperative basis. This corporation was later taken over by the
Amalgamated Clothing Workers and acted as its construction com­
pany. The first project was begun largely to demonstrate that lowrental housing is possible if carried out on a large scale.
In all, seven separate building projects were undertaken—three by
the Amalgamated Housing Corporation, two by the A* H. Consumers
Society, Inc., one by Amalgamated Dwellings, Inc., and one by East
River Cooperative Apartments, Inc.
The size and year of completion of each of the projects are shown
below :
Amalgamated Housing Corporation, B ronx:
1929 ___________________________________________________
Amalgamated Dwellings, Inc., Manhattan:
1930 ___________________________________________________
A. H. Consumers Society, Inc., B ronx:
1946- 47 1_______________________________________________
East River Cooperative Apartments, Inc., Manhattan:
1947- 48 2_______________________________________________


3, 047



1 As of December 31, 1946, this project was under construction; it is limited to veterans
of World War II.
2 As of December 31, 1946, this project had advanced to the stage of receiving bids for
the construction.

The discussion in this section relates only to the first six of these
projects. The seventh (East River Cooperative Apartments) is de­
scribed on page 19.1
1This corporation has since been dissolved.




For none o f the above construction were union funds used. A t the
beginning, however, the union acted as sponsor and guarantor, and
several organizations composed of union members or affiliated with the
union (the New York and Chicago Amalgamated Banks, the Amalga­
mated Center, and the Amalgamated Clothing Workers’ Credit Union)
advanced temporary loans, to enable the project to get under way.
Because of the success of the first venture, the later projects were able
to obtain financing from regular agencies. However, as the later
buildings were carried on largely for and by the same union group,
and notably under the same leadership,2 the name Amalgamated was
used for all.

The buildings of Amalgamated Housing Corporation and those o f
A. H. Consumers Society, Inc., occupy a triangular plot in one of the
finest locations in the Bronx. On the north side this development is
bounded by Van Cortlandt Park, the city’s largest public park, con­
sisting of some 1,100 acres; on the east, by Mosholu Parkway; and on
the south, by Jerome Park Beservoir. Families living in these apart­
ments, therefore, have views o f the park, the waters of the city reser­
voir, or the palisades o f the Hudson. The proximity of the parks
means access to the tennis courts, ice skating, and other outdoor
recreation and exercise made available by the park facilities. The
buildings are within 5 minutes’ walk from two subways.
The first buildings erected by the Amalgamated Housing Corpora­
tion are o f the walk-up type,3 five stories in height. The buildings
erected in 1929-31 are six and seven stories in height, and provide ele­
vator service. Those of the A. H. Consumers Society are two and
three stories high. Privacy is assured by the installation o f many
stairways; in the walk-up buildings, only two or three apartments
open onto a single staircase and in the elevator buildings, only three
or four.
The buildings cover approximately half of the plot, the other half
being used for gardens and landscaped areas. The structures are in
the form of hollow rectangles. Those erected prior to 1941 are of
Holland brick, of mixed colors; the succeeding ones are of domestic
red brick. A ll buildings are equipped with incinerators, mechanical
refrigeration, gas ranges, bathtubs and showers, as well as hardwood
floors. (For viejw o f interior court of Bronx buildings, see cover.)
The downtown building, erected by Amalgamated Dwellings, Inc.,
occupies a square block, 300 x 200 feet, and is bounded by Grand,*8
2 A. E. Kazan, the prime mover in all the projects, and their manager after completion,
is also the leader in the East River Cooperative Apartments.
8Elevators were eliminated under a compromise reached on a restriction in the deed which
had prohibited the erection of an apartment house on the site.



Sheriff, Broome, and Columbia Streets. This is one o f the most neg­
lected regions in the city of New Y ork ; in about a third of the area the
buildings have been either demolished or boarded up, and the other
two-thirds are occupied by industrial buildings or tenement houses.
At one time this was one of the most congested districts in the city.
The Amalgamated structure is six and seven stories in height, and
contains 236 apartments, ranging from two to five rooms. It is
equipped with 8 automatic elevators, incinerators, mechanical refrig­
eration, showers, and bathtubs. The lay-out of the apartments and
the design of the buildings is similar to those in the Bronx, the same
architect having been employed in both. The high cost of land made
it necessary to use a greater percentage o f the plot for the building—
60 percent. A landscaped court of 24,000 square feet provides a
pleasant outlook to most o f the apartments.
This building—which is in sharp contrast to its surroundings—
demonstrates the possibilities of cooperative effort in replacing dilapi­
dated buildings, in substandard areas, by good housing.

Amalgamated Housing Corporation and Amalgamated Dwellings,
Inc., are limited-dividend companies organized under the New York
State Housing Act. A. H. Consumers Society, Inc., is organized
under the regular corporation law.
The buildings erected by the first two o f these organizations enjoy
a 20-year tax exemption (on buildings, not land). In return, their
rental charge is limited to $11.00 per room in the Bronx and $12.50
in Manhattan. The consequent savings are therefore considerable.
Under the original law, the granting of tax exemption by the munici­
pality was mandatory, if the project was approved by the New York
State Board of Housing. The law was subsequently amended, making
city approval optional. As this provision to some extent nullified the
benefits of the act, in that it limited rentals without assuring tax
exemption, the buildings erected in 1941 and 1946, although sponsored
by the same group as before, were undertaken as an enterprise o f the
A. H. Consumers Society which is not under the housing law.
The first six buildings cost nearly $1,970,000, o f which $315,000 was
for land and $1,654,359 for construction. Construction cost averaged
$1,437 per room and 38.95 cents per cubic foot (including basement
space). A 20-year 5-percent first mortgage o f $1,200,000 was obtained
from the Metropolitan Life Insurance Co. The remainder came from
payments by the tenant-members, at the rate o f $500 per room, and
from the sale of 6-percent preferred stock to tenants, the union, and
other friendly organizations. In addition to the tax exemption (sav­
ing nearly $30,000 a year, or $2.11 per room per month), savings were
732230°— 47------ 4



made in other ways—by the purchase of comparatively low-cost land,
by the ^-percent reduction in interest on the Metropolitan mortgage
(lowering the rate from the customary 5y2 to 5 percent saved the hous­
ing association an estimated $97,865), and from the waiver o f the
usual recording fees, revenue stamps, etc., by the authorities and the
insurance company.
Building 7 in the Bronx had a construction cost of $1,003,021; this
was at the rate of $1,322 per room and 41.79 cents per cubic foot
(including basement).
The last unit erected in the Bronx by the Amalgamated Housing
Corporation was considerably smaller than its predecessors and con­
tained only 115 apartments. The total cost was about $570,000, of
which $380,000 was obtained on a 5-percent first mortgage from the
Metropolitan Life Insurance Co., and the remainder from the
The success o f the Bronx projects prompted Aaron Rabinowitz,
then a member of the New York State Board of Housing, and Herbert
H. Lehman, then Lieutenant Governor (later Governor) of New
York, to undertake the financial responsibility for the downtown
Amalgamated venture. During the construction period they ad­
vanced about $800,000. The actual work, however, was carried out
by the same group that built the Bronx buildings. The downtown
building cost, for construction, $1,064,713—$1,272 per room and 38.03
cents per cubic foot. The expenditure for land, however, was con­
siderably higher proportionately, bringing the total cost o f the project
to nearly $1,520,000. It was financed by a mortgage loan of $960,000
from the Bowery Savings Bank, $60,100 from the sale o f debenture
bonds, and the rest from members’ down payments.
Although all the housing projects erected up to 1946 received mort­
gage loans from either an insurance company or a savings bank, a
deviation was introduced in the construction o f the 1946-47 unit o f
the A. H. Consumers Society. In order to reduce the interest rate, and
thus keep rentals down, the cooperators living in the earlier buildings
were urged to subscribe to mortgage-bond certficates, bearing 3 percent
interest for the first 5 years and 4 percent for the second 5 years.
The corporation will have the right to call in some o f these bonds every
year, or buy the entire amount, at will. Purchasers of these bonds
will thus receive a fair return on their investment, and the whole
operation will be a demonstration of the effectiveness o f self-help
cooperative effort.
Subscribers for apartments in this building are limited to veterans
of W orld W ar II, with special preference for those who lived in other
Amalgamated dwellings before joining the armed forces. As in all
the other projects, they will subscribe for $500 in stock for each room.



receiving in return stock or a certificate of indebtedness and a lease to
an apartment. The lease runs for 2 or 2 years, with the option of
renewal. The corporation, however, reserves the right not to renew
the lease if the applicant is found to be undesirable. (Nearly 70 per­
cent o f the original tenant-cooperators in all the Amalgamated build­
ings still live in the projects.)

In the admission o f housing-association members, the members of
labor organizations are given preference, but during the nearly 20year period o f operation many persons have changed their occupa­
tion, and a good many nonunionists are now living in the develop­
ment. In general, preference is given to wage earners, members of
labor unions, salaried people, and those who can be classified as be­
longing to the moderate-income group. The needle trades, with the
Amalgamated Workers members comprising the largest single group,
account for about 50 percent o f the residents o f the Bronx apartments
and about 25 percent in the downtown building.
In the Bronx buildings, the applicant for an apartment was required
to raise at least 50 percent o f the investment; the rest could be met by
contracting a loan. In order to enable the applicant to pay this loan
over a long period, the assistance of the Jewish Daily Forward (a labor
newspaper in New York City) was obtained. It arranged with the
Amalgamated Bank for the latter to make loans to prospective appli­
cants accepted by the housing corporation, permitting them to re­
pay these loans over a period of 10 years and using as collateral a
deposit o f $150,000 made by the Forward. That deposit was gradu­
ally released as the loans were repaid.
In the case of the Amalgamated Dwellings, Inc., Messrs. Lehman
and Rabinowitz pledged $350,000 4 and authorized the bank to extend
loans up to 70 percent o f the required equity investment o f the ap­
plicant. On the A. H. Consumers Society’s 1941 building, the corpo­
ration accepted payment from the prospective member partly in notes
to be paid in the course of several years and partly in cash. These
notes were not discounted, as the corporation itself was able to carry
the project.
The average rental in the buildings of the Amalgamated Housing
Corporation project (Bronx) is below $11.00 per room per month;
in that o f the Amalgamated Dwellings (Manhattan) it is $12.22; and
in the buildings of A. H. Consumers Society erected in 1941 (Bronx)
it is $13.00. In the latter association’s 1946-47 Bronx building the
monthly charge is $16.00, this higher figure being necessitated by the

This was in addition to the funds supplied by them during the construction period.



high cost of construction and the fact that no tax relief is granted.
Two factors tending to retard the growth of cooperative housing
are inability on the part of a good many applicants to raise the equity
investment, and the uncertainty of being able to recapture the equity
investment if at any time the applicant wishes to withdraw from the
cooperative housing project.
In the Amalgamated, the redemption problem has been handled very
successfully thus far, notwithstanding that the first buildings were
built in a period of high prices and were subjected almost immediately
to an unprecedented period of depression. Reserves for redemption of
shares have been built up through the voluntary contributions by the
residents, over a number of years, of half of their patronage refunds
from A. H. Consumers Society and the housing corporation. In the
spring o f 1946 these reserves totaled some $250,000 in the Bronx and
$65,000 in the downtown project, and the A. H. Co-op Community
News could report (issue of October 1946) that no persons had left
the community who had not “ received a full refund o f their equity.”
Distribution of refunds on the 1944-45 operations o f the two Bronx
associations (housing and service)—exceeding $50,000—was then in
process. Members were being urged to continue their previous con­
tributions to reserves, because “no one can foretell what the future
will bring.”

As the Amalgamated residents are a fairly homogeneous group and
by themselves form a good-sized community, they have developed a
community spirit and carry on many activities together. Among these,
cultural activities form a considerable part. In the Bronx they include
Sunday afternoon forums on topics o f current interest, folk dancing,
classes in current events, consumers’ cooperation, drama, book-review
group, dancing (children), nutrition, etc. For the children there are
also a nursery school, supervised game-room activities, and an all-day
Saturday recreation program under the direction of seven counselors.
During the war the Amalgamated members raised funds from
which were paid half o f the rents of resident fathers who were drafted,
in order to insure that their families would be able to keep their
Both the Bronx and Manhattan projects carry on business activities
other than housing. These activities in the Bronx are conducted by
the A. H. Consumers Society, Inc., and downtown, by the Amalga­
mated Dwellings Cooperative Service, Inc., the stockholders in both
o f these being identical with the stockholders of the housing



The A. H. Consumers Society, originally formed as a service or­
ganization, is gradually taking on more and more functions. A t
present this corporation distributes milk and electricity cooperatively,
runs a laundry service, and operates a food store in the development.
It assumed the function o f purchasing the stock o f outgoing mem­
bers o f the Amalgamated Housing Corporation in cases in which
there are no new applicants to take the place of those who wish to
withdraw. It extends loans to prospective new applicants when they
are unable to raise the required investment, and has also assumed the
responsibility o f erecting any additional buildings.
The net earnings of this corporation for the years 1944-46 were
$20,545, $18,906, and $24,560, respectively. These earnings were dis­
tributed to the members in proportion to their patronage.
Recently this corporation also acquired the greater part o f the va­
cant land in*the immediate vicinity o f the Bronx Amalgamated proj­
ect, with a view to erecting additional cooperative apartments. It
also acquired 16,000 square feet of business property on which it in­
tends to operate a cooperative retail shopping center for the benefit o f
the community.


East River Cooperative Apartments New York City
Thus far, to the Bureau’s knowledge, only one cooperative project
has been undertaken under an urban redevelopment law. It is the
East River Cooperative Apartments.
Some 20 States have passed urban redevelopment laws, the purpose
o f which is to facilitate slum clearance and the reclaiming of blighted
areas. Such processes, o f course, imply large-scale operation and
great amounts o f money. Probably very few cooperative groups,
by themselves, would be financially or technically qualified to provide
housing under the redevelopment plan. If, however, they could en­
list the interest o f existing cooperatives, and o f one or more limiteddividend, philanthropic, public, or mutual housing enterprises, such
a project might be feasible.
Such agencies have in most cases a surplus of applicants for hous­
ing, who could be referred to the housing cooperative, as well as the
necessary business and administrative experience.
Also, the urban redevelopment laws generally provide a method
for land acquisition, through condemnation procedure if necessary;
some of these laws likewise permit reduction o f land charges to a
level consistent with its use for dwellings or apartment houses.5
5 The market price of blighted property is ordinarily so much greater than a reasonable
use value that an urban redevelopment project would start with an impossible debt burden
unless a large part of the deflation loss were met from public funds.



Tax exemption on the increased value of the redeveloped area, for a
fixed period o f years, is also provided in some statutes.
The East River Cooperative Apartments will embrace eight city
blocks, an area of approximately 522,500 square feet; included in
this area are a playground at the extreme northwest corner, Public
School 110 at the extreme northeast corner, as well as the building
o f Amalgamated Dwellings, Inc., a cooperative housing project built
in 1930 (see p. 14). The new enterprise is undertaken by a group
of sponsors representing subscribers to the apartments, the City
o f New York, and the financial agency supplying 80 percent o f the
required funds as a mortgage loan.
This is an area in which property values have been declining for
years. Vladeck Houses—a city-sponsored low-rent housing project—
are situated nearby. Except for this city slum-clearance project and
the Amalgamated building, no new housing has been undertaken in
this district for many years.

The sponsors undertook to raise 20 percent of the cost o f the project
by the sale o f stock or debenture bonds to the applicants for housing
in the new enterprise. I f necessary, the sponsors may attempt to
obtain additional funds from other individuals and agencies that
might be willing to assist in financing the development. The in­
dividual prospective cooperator is required to subscribe to $500 of
stock or debentures for each room for which he applies; of this amount,
$100 per room is paid at the time his application is filed and accepted.
When this plan was at first conceived, four local savings banks
agreed to undertake the financing, construction, and completion o f the
project. It was understood that the cooperative organization would
raise 20 percent of the cost, from the sources above noted. The banks
were to accept a purchase-money mortgage to the extent o f the other 80
percent. This loan was to run for 25 years at 4 percent, with about
2 percent amortization. The local saving banks were later replaced
by the Mutual Life Insurance Co., which was willing to accept 3y2
percent in interest, and the plan was modified to the extent that the
responsibility for the construction and completion o f the project was
shifted to the cooperative organization. The insurance company lim­
ited itself to a loan not to exceed $5,600,000, or 80 percent o f a total
cost o f $7,000,000.
Under the law, the city agrees to accept the present assessed value
(i. e., the unimproved value) o f the property as the tax base. The
value of the improvements—buildings, and improvements to land—is
exempted from taxes for a period of 25 years, after which the associa-



tion will pay taxes on the full assessed value. The return on invest­
ment is limited to 6 percent o f the total actual cost.
Cooperators will pay towards maintenance a charge (rental) not to
exceed $15 per room ; no rent refunds or rebates are to be declared by
the cooperative organization during the first 5 years. A ll savings are
to be applied to reducing the mortgage indebtedness. The $15 per
room will go to pay interest on the mortgage, depreciation, mainte­
nance, taxes, etc. The “level payment” plan o f amortization o f mort­
gage under which the total monthly payments remain constant (but
with an increasing amount of this going on principal as interest pay­
ments decrease), is to be used to decrease the mortgage liability.

The East River Development will consist of three 12-story buildings,
containing 796 apartments, and a total of 3,047 rooms. Each building
will occupy a square block. In addition, one block will be taken up
with a garage and a community building to serve the tenant
Some o f the present streets will be eliminated; others are to be
widened. When the project is completed, only one street will cross
the development. Children going to school or to the playground will
cross only one public street. The buildings will occupy 25 percent of
the net land area, or approximately 18 percent o f the gross area
(including streets). The greater part of the land will be developed as
gardens and courts, allowing sufficient air and light in each apart­
ment. With very few exceptions, every apartment will have cross­
ventilation and privacy; in each, the rooms are all accessible from a
central foyer.

As noted, the prospective member must subscribe for stock or de­
bentures in the corporation at the rate of $500 per room, and at the
time o f application must deposit $100 per room as evidence o f his
good faith. Before construction begins, he must have paid in 50
percent, or $250 per room, and by the time the buildings are com­
pleted, the entire amount. The monthly charge o f $15 per room will
remain constant, and will go towards paying his share o f interest,
amortization, maintenance, repairs, insurance, etc. After the first
5 years, if that charge should prove to be excessive, the excess is to
be returned as a rebate or refund. As the mortgage is reduced, the
equity of the member is correspondingly increased.
No method has been devised to assist prospective cooperators who
have difficulty in raising the $500 per room. Thus far, only a small



percentage o f the prospective registered subscribers has signified the
need o f contracting loans to enable them to join.

By mid-November, 1946, more than 75 percent of the apartments
had been applied for. Plans had been drawn for the first building
(the three buildings are alike in design) and it was hoped that work
could be started by the spring o f 1947.
With practically the same sponsors and the same management here
as in the Amalgamated projects, performance is assured. However,
the financial success of the undertaking depends, in essence, upon the
price o f building materials and cost of labor when construction be­
gins. T o stay within the rent limitation, the total actual cost of
the project cannot exceed $7,000,000. I f material costs rise so high
as to bring the total cost above that figure the project will have to be
abandoned or modified. Rising price levels have already necessitated
a revision o f the original financing, resulting in a change o f lending
agency (i. e., from savings banks to insurance company), in order to
economize. On the other hand, if the project succeeds, it may be
extended to the East River Drive (Franklin D. Roosevelt Drive) —
thus adding an area slightly larger than the one embraced by the pres­
ent undertaking.


Group Housing Cooperative, Washington, D C.
Group Housing Cooperative was formed in May 1944. Any person
interested in the expansion of cooperative housing is eligible for
membership in this organization, upon subscribing for two $5 shares
o f stock. Membership in Group Housing Cooperative is a prerequi­
site for membership in any housing project developed by it; how­
ever, such membership is not in itself a guaranty o f a dwelling nor
o f membership in any GHC community.
During the first 2 years of its existence the association did educa­
tional work in the theory and practice of cooperative housing, with
a view to the actual provision of dwellings as soon as conditions per­
mitted. The work was carried on through standing committees on
membership, planning, finance, legal matters, public relations, and
The association had 411 members by the end of December 1946, with
7 additional applications awaiting approval.

Each project which the parent organization sponsors and develops
is to be incorporated separately. The function of GHC will be to
perform, in consultation with the members, all the preliminaries—
land acquisition, provision of legal, architectural, and accounting



services, and community lay-out—up to the time when a sufficient
proportion (25 percent) of the potential members has invested in the
project. A t that time a new corporation will be formed whose board
will then carry the work through to completion, with the advice and
assistance o f GHC.
The prospective members of the new community (having already
joined GHC) will join the project cooperative, in which each family
will have only one vote. Each will subscribe for stock in an amount
corresponding to the value o f the dwelling selected by it.
It is planned that all of the projects sponsored by GHC shall be
“ cooperative all the way.” Each member family will have a perma­
nent lease on the unit of its choice, but will not hold title to it. I f
at any time the family desires smaller or larger quarters it will have
preference, as regards existing vacancies, over any new member.

Early in 1946 the 124-acre Bannockburn golf course, lying a short
distance outside the District o f Columbia, in Maryland, which had
been taken over by the Potomac River Naval Command and operated
as a service recreation center, was put up at public auction.
Cooperators5 Properties, an association formed for the purpose of
supplying buildings for the use o f cooperatives in and around Wash­
ington, agreed to act as trustee, receive subscriptions under a syndicate
arrangement, purchase the tract, and give GHC a 9-month option on
it. It was successful in purchasing the property for $193,000.
Architects were then employed who drew up a plan for a “balanced
community55 with various types and sizes of dwellings, shopping'
center, parks and recreation areas, and community center (the club­
house o f the former club).
It was found that, retaining the natural wooded areas and adjacent
open land for parks, some 600 dwellings could be provided in the area,
with a density o f not over 5 families per acre. The community as
planned would consist largely o f single-family houses, with a few
semidetached dwellings, each with 50-foot frontage, and three apart­
ment buildings up to 8 stories in height, each set in a landscaped area
o f 4 to 6 acres. The provision o f various-sized units would facilitate
transfer from one to another as families grew or contracted in size.
The total cost was estimated as between 5 and 6 million dollars.
It was reported that a large insurance company, interested in long­
term financing, was giving serious consideration to placing a mortgage
loan on the project.
Local zoning regulations specified single-family dwellings only.
The association’s application for rezoning the area was denied. Appli732230°—47



cation for rehearing, in April, 1947, was to be made. In the meantime
the association decided to go ahead with a small “ pilot” development
o f 18 single-family houses on 4 acres of the land.

Conditions of Membership
The association for the new community, Bannockburn Cooperators,
was incorporated under Maryland law in August 1946. As it was not
a cooperative law, cooperative features were incorporated in the by­
laws. These included nonprofit operation; one vote per member,
regardless o f the amount of stock owned; and proxy voting (required
by the law) only by a member of the absentee’s family and no more
than one proxy voted by any member. The bylaws also commit the
association to fair labor practices in dealing with its employees and
purchase o f materials through cooperative sources, giving preference
to commodities produced under union conditions.
Membership in the association was limited to members of GHC who
expect to live in Bannockburn village. Preference was given in the
following order: (1) To persons who had subscribed to the purchase
syndicate under which the land was bid in; (2) to persons who were
members o f GHC at the time o f purchase, but did not subscribe to the
syndicate; and (3) to persons who joined GHC after the purchase.
The latter two classes had preference in the order in which they had
joined GHC. However, any applicant could be rejected if it appeared
that he “or any member o f his family unit has shown an attitude in­
consistent with the principles or bylaws” adopted by GHC or Ban­
nockburn Cooperators.
Each member must buy 5 shares at $1 each, and make a down pay­
ment of $500—$200 at time of admission and $100 per month for the
next 3 months (the subscriptions of syndicate subscribers may be
applied to this amount). A further payment of up to $50 may be
required, but no more thereafter until definite construction commit­
ment has been made for the particular dwelling unit selected. It is
expected that the member equity required will range from 15 to 20
percent o f total cost.
Priorities in selection of dwelling units are to be in the same order
as admission into membership.
In December the new association was sufficiently well organized to
take over the property, reimbursing the parent association for its
expenditures and assuming the legal, architectural, and other commit­
ments. The association does not plan to begin construction until
“materials and manpower are available and prices appear stabilized”
—probably not before the summer of 1947 or even later. In the mean­



time the land is being leased as a golf course at a rental high enough
to cover taxes andlnterest on the mortgage.

Our Cooperative House, New York City
This project arose from the desire of Consumers’ Cooperative Serv­
ices (an organization operating a chain o f cafeterias in New York
City) to further the expansion o f the cooperative movement. Un­
claimed patronage refunds (minus taxes) on nonmember business
were put into a reserve for such expansion. By 1929, after 9 years’
operation, the reserve had grown to over $136,000.
Canvass o f the membership indicated housing as a preferred field
for action. A piece o f land in the Chelsea district of downtown
Manhattan was bought and a subsidiary, Rochdale Housing Corpo­
ration, was formed to undertake the construction o f an apartment
The building was a 12-story structure, built in the form of an H,
with court gardens, elevator service, roof garden with a view of the
Hudson River, and cooperative cafeteria.
O f the 66 apartments, 30 had 4 rooms, there was one 5-room pent­
house apartment, and the rest had 1 to 3 rooms each. They were
equipped with extra-large windows, electric refrigerators, and many
extra “ gadgets” ; several also had fireplaces. Members were required
to invest sums ranging from $1,000 to $4,200, depending on the size
and location o f their apartment. They received, for this, thirdmortgage bonds and a 50-year lease. Original monthly payments
ranged from $44 to $65 7 for 1 room, $66 to $937 for 3 rooms, and $77
to $1347 for 4 rooms; these, it is reported, were from one-fourth to
one-third lower than those charged for comparable apartments in the

Construction was completed and the apartments were ready for
occupancy by October 1930. The total cost was $652,700, o f which
$190,000 went for land, $395,890 for construction, and $66,810 for fees
and financing cost.
The money was raised by a first-mortgage loan of $300,000 from the
Bowery Savings Bank, a second mortgage of $130,000 ($99,152 sub­
scribed by members and $30,848 by CCS), a third mortgage of $119,600 raised by the tenants, a fourth mortgage o f $37,700 held by CCS,
and a loan of $65,400 to run until such time as all the apartments
were taken by member-owners.
An association, Our Cooperative House, was formed by the resi­
dents and took over the management of the place, on a 50-year lease
from Rochdale Housing Corporation.
7 These top amounts were later reduced to $60, $80, and $115.



By the end of the first year 47 apartments had been taken by ten­
ant-owners; the rest were leased to nonmembers. The operations
during this period yielded a surplus of $4,364, from which a patron­
age refund amounting to 3 weeks’ rent for each tenant (total, $3,234)
was paid.
However, the depression, a factor not anticipated when the project
was undertaken, began to make itself felt with greater and greater
severity. The financial obligations of membership and even o f non­
member rental in the new building were high—more than most
people were willing to undertake in view o f the great uncertainties
of the time. Also, there was a continuous turn-over in membership,
resulting partly from loss of employment but also largely from a
shifting from job to job, which entailed removal from the neighbor­
hood. The result was that, notwithstanding a rent reduction in 1933
and again in 1937, the association could hardly keep the building
filled,8 much less attract owner-members. Although 47 apartments
were taken by owners at the start, by 1931 there were only 31 of these
left. The following year the number rose to 38, but this proved to be
the peak. Thereafter the number fell off continuously until by 1944
only 11 remained; the other 55 residents were renters.
Notwithstanding these difficulties, the association was run economi­
cally and had been able to operate within its income until 1935, when
it sustained a loss (o f about $1,000) for the first time. A slight re­
covery for several years thereafter was followed by operating losses
year after year, beginning with 1940.
The association had been able to meet its obligations as regards both
first and second mortgages throughout the period, however. By 1937
it had reduced its first mortgage to $247,000 and by 1940 to $222,000.
In the meantime, however, the parent association, Consumers’ Coopera­
tive Services, had had to increase its investment from $133,948 in
1930 to $154,762 in 1937. During the ensuing 3 years Our Cooperative
House was able to retire about $5,000 o f CCS’s second-mortgage bonds
and about $4,500 of the loan the association had advanced for mem­
bers’ equity (pending sale of the remaining apartments); this reduced
the CCS investment to $148,702 by March 1940.
However, interest on the third mortgage had gone unpaid since
1940 and that on the fourth mortgage since 1937. None had ever been
paid on the $10,000 worth of common stock held by CCS.
In 1940 the first-mortgage holder offered a new mortgage with a sub­
stantially lower interest and amortization rate, provided the prin­
8 This, of course, was an experience common to most apartment houses in the ’30s, espe­
cially those with fairly high rent levels. In the neighborhood of Our Cooperative House,
the banks which had foreclosed on properties in distress lowered rents sharply, wiping out
the previous advantage enjoyed by tenants of the cooperative (see p. 25).



cipal was reduced to $200,000. This was, done with the assistance of
CCS— a process which resulted in raising the latter’s total investment
in the enterprise to an all-time peak o f $166,993, as o f March 31,1942,
and in its taking over the operation o f the building. With the con­
sent o f the second-mortgage holders, the interest rate on their bonds
was reduced from 6 to 5 percent. By this time only $26,000 o f the
$185,000 in third-mortgage bonds was held by members living in the
building, which meant an interest obligation on $159,000.
This heavy burden, and the additional problems entailed by the
war, in the form o f increased operating costs and frozen rent levels,
made necessary another financial operation in 1944-45, when the or­
ganization was faced with the impossible prospect o f having to redeem
nearly half o f the second-mortgage bonds which were to fall due on
September 30, 1945. A plan was formulated by which Our Coopera­
tive House was to be dissolved and Rochdale Housing Corporation
reorganized with two classes o f stock: The common stock ($10,000 in
amount), owned by CCS; and nonvoting, noncumulative preferred
stock ($100 per share, total $130,000). Third-mortgage holders were
offered a choice o f preferred stock to the face value o f their holdings
(in exchange for their bonds) or cash equal to 16y2 percent of such
face value. It was reported that about two-thirds asked for cash and
one-third accepted preferred stock. The plan also met with the ap­
proval o f the second-mortgage bondholders, who not only voted an
extension o f time for the bonds coming due but oversubscribed the
This reorganization left the financial arrangement as follows: A
4-percent first mortgage o f $180,000, repayable at the rate of $4,000 per
year, held by the State Insurance Fund; a 5-percent second mortgage
of $121,000, held by 65 investors (CCS holding $20,000 o f th is); and
preferred stock o f $130,000, held by 15 investors (CCS holding

As o f January 1,1946, Our Cooperative House went out o f existence
and this cooperative experiment came to an end. The 9 remaining
tenant-owners (who were among the third-mortgage holders affected
by the above reorganization) were given 2-year leases at “ maintenance
rentals.” Hereafter, CCS will operate the house (as it has actually
been doing for the past 6 years) through Rochdale Housing Corpora­
tion. A ll apartments will be leased and none tenant-owned. In
other words, the project has become simply an investment of CCS,
not an enterprise run cooperatively by and for resident-members.
A report from the organization to the U. S. Bureau o f Labor Statis­
tics stated that, notwithstanding rent ceilings and increased labor and



maintenance costs, the reduction in carrying charges and the elimina­
tion o f vacancies were providing a safe margin in operations for the
current (1946) year.
Opinions vary as to the causes of failure. A ll agree that the pri­
mary reason was the dislocation caused by the depression and the
consequent unwillingness o f prospective members to undertake
financial obligations of such magnitude. One o f the greatest problems,
as one o f the original members points out, was only accentuated by
the depression. That was the continual shifting o f the working popu­
lation from which the cooperative membership was drawn. This
group consisted of social workers, professional people, and high-grade
white-collar workers. Even before the depression, they moved from
job to job, either within the city or to positions outside. This mobility
resulted in a remarkable instability in cooperative membership. Other
factors mentioned were the rather high interest rates, maintained
after current rates had fallen, the high luxury level of the project, and
apartments ill-adapted for general use. Criticism of apartment lay­
out and planning centered in the small size of the bedrooms (not suit­
able for family use) and in the large proportion of 4-room apart­
ments. Families (counted upon to take the larger apartments) found
the neighborhood—which was more suited for single business and
professional people and couples—not convenient for raising children.
A ll these factors made impossible the securing of a full tenant-owner­
ship, and without this the project could not succeed.


United Workers9Buildings New York City
Many years ago a small group o f needle-trades workers leased one
floor in a house in New York, on a cooperative basis. As the group
increased, the whole house was taken over, and certain social features
were added and a summer camp was started. These proved so popular
that the field o f activities was broadened until at one time the United
Workers Cooperative Association was the largest and most active
cooperative group in New York City.
Beginning in 1925, the association bought tract after tract o f land,
finally owning 6 city blocks, all bordering on Bronx Park. On this
land several apartment buildings were erected.
The first project contained four units surrounding a large central
garden, and provided 339 dwelling units. One section o f this group
consisted o f “bachelors’ quarters” (single furnished room s); each 3
o f these had a common bathroom and a kitchen was provided for
every 12 rooms. The second block of buildings contained 385 apart­
ments and was in the form of an E.
These were 5-story, walk-up apartments. As no wing was more
than 2 rooms deep, every room looked out either upon a street or upon



the interior garden. Special care was taken to obtain cross ventilation.
Less than 50 percent o f the ground space was occupied by the
buildings. Each kitchen was equipped with gas range, refrigerator,
and dumbwaiter; each bathroom had shower as well as tub.

Membership in the union of the applicant’s trade was a prerequisite
to joining the housing group. The equity required of each prospective
member was $250 per room, half to be paid at the time of joining and
the rest within a year. The monthly payment was at the rate o f $14
or $14.50 per room, the amount varying according to the location o f
the apartment chosen.
Originally, the member-purchaser received no stock in the enter­
prise, but simply a receipt for the amount paid in and a 2-year lease to
his dwelling. A t the end o f 2 years, if he was still acceptable to the
other residents, his lease was to be renewed; if not, he had to leave,
in which case his principal was to be returned, without interest, minus
his proportional share of the cost o f redecorating the apartment for
a new tenant. Subleasing was not allowed; a resident leaving, for
any reason, before expiration o f his lease had to return the apartment
to the association.

Community activities carried on by the association were numerous
and varied. They included a kindergarten and day nursery with
four full-time teachers; after-school classes in Yiddish and Jewish
history for children of grammar-school age, and evening classes in
English for the adults of the colony; a “youth cooperative” which
arranged for lectures, discussion groups, and various recreational
activities, such as concerts, entertainments, hikes, etc.; a community
library; an auditorium; a large gymnasium with the usual “gym”
equipment, a piano, shower room, locker room, and a room for steam
baths; a health clinic; the year-round camp already mentioned (near
Beacon, N. Y . ) ; collective purchasing of gas, electricity, ice, and m ilk;
and seven cooperative stores—a grocery store, meat market, fish mar­
ket, vegetable store, delicatessen, laundry, and restaurant. Earnings
from the latter were not to be returned in patronage refunds but were
to be used for community purposes, as under the Belgian system.

This group had a well-defined labor policy. As already stated, all
members were required to be union members, and this requirement
was also carried out wherever possible in the business dealings of the
association; it dealt only with union companies. A ll the construction



work on the buildings was done by organized labor and the materials
were supplied by union companies. The association insisted that
even the common laborers employed must be union men. The em­
ployees in the cooperative stores, restaurant, and laundry were all
members of their respective unions, as were also the teachers in the
kindergarten. In one instance the association was responsible for
the unionization o f a formerly open-shop business—that of the milk
dealer from which the dairy products for the colony were bought.

The land used for these buildings cost $450,000, and the construction
o f the buildings planned was estimated at $3,000,000. As noted, each
prospective resident had to pay a total of $250 per room. For the first
block of buildings, which cost $1,600,000, $250,000 was raised in this
way. A loan o f $1,100,000 was obtained from the New York Title
& Mortgage Co., and the remainder by a 6-percent bond issue of
$250,000. This first block was begun in 1926 and finished early in
The second block was built in 1928. It was financed by a firstmortgage loan, and a bond issue (in the nature of a second mortgage)
effected through a subsidiary (Consumers’ Finance Corporation) to
the housing association.
A s indicated in the preceding description, the plans and lay-out were
fairly elaborate. Largely because o f the high costs, necessitating
rents higher than those specified in the New York Housing Law ($11
in the Bronx), the group was unable to qualify under that law for the
20-year tax exemption it afforded. This, o f course, meant that a
sizable tax burden had to be assumed by the residents.
An attempt was made to organize for the third block under that
act, with considerably less-elaborate plans. However, as one observer
pointed out, “they had already undertaken more than they could carry
through.” 9 As the equity payment required was only $250 per mem­
ber, the net worth of the association was very low, and it appeared, also,
that the association had fallen into arrears, on interest, amortization,
taxes, and assessments, by over $200,000. The lender instituted fore­
closure proceedings. Under a compromise agreement, the land not
already built on was relinquished and the association reorganized into
the Workers Colony Corporation, with its common stock (the mem­
bers’ paid-in equity) held in trust for the members and its preferred
stock exchanged for the second-mortgage bonds o f the old Consumers’
Finance Corporation—all under the direction o f the holder o f the first
mortgage, the lending agency. The various business enterprises, in®Recent Trends in American Housing, by Edith Elmer Wood, New York, The Macmillan
Co., 1931, p. 176.



eluding the cooperative stores, were sold to private interests or other­
wise disposed of.
By 1931 the arrearages had been paid off and the management o f the
project had been returned to the residents. However, the depression
was by then 2 years old and several years of it still lay ahead. Reports
to the U. S. Bureau o f Labor Statistics indicate that the association
never recovered its former ground. Assets at the end o f 1941
amounted to $2,383,414, and first and second mortgages totaled
$2,201,000. Capital stock (the common stock held by the residents)
aggregated $480,525. However, as a result of continued operating
losses, by the end o f 1941 there was an accumulated deficit o f $611,843,
more than wiping out the members’ equity. A t that time about 60
percent o f the apartments were occupied by shareholders, and the
other 40 percent by renters. Later the mortgagee took over the prop­
erty and the Workers Colony Corporation was dissolved.
The community facilities—auditorium, kindergarten, gymnasium,
library, play room—are still available and utilized by the residents.
These activities and the privilege of good housing in pleasant sur­
roundings at relatively low rentals are the sole remaining benefits o f
the enterprise that started so ambitiously.

732230°— 47-


Chapter III.— Cooperation in Ownership and
Management— The "Mutual” Projects
A “mutual” association, in the general sense o f the term, is one
that practices the principles o f mutuality, i. e., providing goods or
services without profit, on a democratic basis, for its members only.
Any housing cooperative providing dwellings for its members is
thus a mutual organization. Recently, as a result of a plan formu­
lated by Col. Lawrence Westbrook, the term has been used specifically
to designate a “system of rental-ownership, under which the occupants
of homes in a given community lease the premises which they occupy
from a company owned by the occupants themselves.” 1 In such a
project the cooperative takes over, for operation and eventual pur­
chase, a completed development.1
2 In the projects here described—and
in the “mutual” system as visualized by Colonel Westbrook3—no down
payment is required of the individual member or of the housing as­
sociation, all the funds being supplied by the sponsor or builder.
The rentals paid cover amortization, interest, insurance, taxes,
maintenance costs, administration, and an allowance for vacancies.
The tenant thus gradually builds up an equity not only through his
payments on principal, but also through certain other credits. Repair
and maintenance charges are estimated annually and any excess of
actual expenditures is credited to the tenant’s account, thus giving
him a direct incentive to take good care of his dwelling. His share of
the vacancy reserves is also credited to him.
Should he vacate his dwelling during the first year o f occupancy,
any reserves to his credit accrue to the housing corporation. There­
after, however, he would be entitled to a refund varying according to
the length of time during which he-has contributed toward the various
reserves and the extent to which these have been or must be drawn
against (as for maintenance during his occupancy and renovation for
a new tenant). He would also be entitled to repayment of his stock
(or principal) equity in an amount equal to the “current price” (i. e.,
original price depreciated over the period of amortization, less the
amount o f principal remaining unpaid). A new tenant coming in
to take the withdrawing member’s place takes over the dwelling at
its “ current price,” with the same monthly payments on principal
as were being made by his predecessor.
1 Mutual Home Ownership for the Veteran, by Lawrence Westbrook.
2 However, “ mutual,” as used in the Wagner-Ellender-Taft housing bill, considered in the
79th Congress but not passed, would have covered any nonprofit housing association pro­
viding dwellings for members only.
3 See “ No Down Payment,” by Col. Lawrence Westbrook and George Creel, in Collier’s,
February 2, 1946.

C H . III.— TH E



The mutual arrangement has certain very definite advantages to
the member. He is not required to make any down payment what­
ever beyond, possibly, a membership fee. Should he have a period
o f unemployment or other difficulties which make it impossible to
meet his monthly payments, he may utilize his excess reserves for
the purpose, or* may borrow against his reserves. As contracts for
dwellings are easily transferable on the books of the corporation, and
as units o f various size are provided in the projects, a member whose
family is expanding or contracting may move from one dwelling to
another that is better suited to his needs, with proportionate increase
or decrease in total and monthly obligations.
Other advantages of the plan are that each resident, as a member
of the corporation, has an equal voice with his neighbors in the affairs
o f the community; that the plan provides community advantages not
generally available to the average individual purchaser; and that it
enables the group as a whole to control the property so as to prevent
neighborhood deterioration.
No resident ever receives title to his dwelling. Colonel Westbrook
emphasizes that this principle is basic. “What he has is the right
o f perpetual occupancy as long as he keeps up his monthly payments.
Anything else would lose the benefit of the system, for with an indi­
vidual in full control of his property, the community could not enforce
high standards.”
West Acres, Pontiac ( Mich.) 4
In 1936 the late Senator James Couzens formed a corporation to
which he advanced $550,000 with which to buy land and construct
200 houses o f varying size and type, in Pontiac (M ich.).
No down payment was required, and the rentals established were
“ substantially less than the prevailing rental rates.” The monthly
payment on a 1-bedroom house, for instance, was $32.70 and for a
3-bedroom house $43.80. Nevertheless, it covered amortization spread
over a 25-period, interest, taxes, insurance, maintenance, etc., and was
sufficient to yield a 3-percent return continuously on the sponsor’s in­
It is declared that in the 10 years of its existence the project, under
varied economic conditions, “ has tested every basic principle o f mutual
ownership.” Not only did the residents have the benefit o f low rents,
but without exception families which had to move away realized
(through various credits) more than they had paid in on amortiza­
tion. It is reported that, such was the pride of ownership and so
well were the dwellings maintained, the property is now appraised
“ at well above the estimated 25 to 35 percent increase in production
costs since 1936.”
4 Data are from Collier’s, February 2, 1946.



Public Mutual Housing Projects
Under the defense housing program of the Federal Works Agency,
eight projects were designated as “ mutual” housing communities;
three o f these were in New Jersey, one in Pennsylvania, one in Ohio,
one in Indiana, and two in Texas. After the creation of the National
Housing Agency the projects were transferred to the Federal Public
Housing Authority o f that Agency.
Although intended to help meet this defense emergency, only such
projects were earmarked for “ mutual” ownership as were o f per­
manent construction and built to house workers employed in plants
regarded as “ definitely established parts of the industrial life of the
community in which they are located.” 5 This therefore ruled out
flimsy construction in purely war-born places, which were likely to
be abandoned after the war.
The funds used were advanced by the Federal Government under the
provisions o f the Lanham Act, but all mutual projects were to be
self-liquidating from the start and carry no rental subsidies.
The purpose of the mutual plan was tw o-fold: (1) To enable the
Government to dispose of the projects after the war, and (2) to enable
middle-income families (i. e., with incomes too high to qualify them
for subsidized low-rent housing but too low to permit the making of
any sizable down payments on privately built dwellings) to own their
own homes. It was considered advisable that the dwellings be placed
on a rental basis, under direct F PH A management, with ownership
retained by the Government during the war emergency, in order to
insure their being available for war workers. However, the Govern­
ment made a definite commitment, in each of the eight projects, to sell
them to nonprofit mutual housing corporations which were formed by
the tenants and met certain prescribed conditions.
The accompanying table shows the location, size, and mutual hous­
ing status o f the eight projects as of December 31, 1946.
At the end of the war, the F P H A pointed out that the war period
had offered no conclusive data on the experiment, as none of the
projects had yet operated under the direct ownership o f the tenants,
and only two (at South Bend, Ind., and Dayton, Ohio) had been
managed for any length of time by mutual ownership corporations.
It noted, however, that these two were “ among the most efficiently
and economically operated of the Government-owned war housing
5 Article by Colonel Westbrook in Labor Information Bulletin (U. S. Bureau of Labor
Statistics, Washington), September 1941, p. 10.

T able

1.— Projects

Project and location


earmarked for mutual home ownership program

ing Acres develop­

Greenmont Village, Dayton,
Walnut Grove, South Bend,
Winfield Park, Linden, N. J~


Avion Village, Grand Prairie,


Dallas Park, Dallas, Tex.......
Audubon Park, Audubon,
N. J.


Bellmawr Park, Gloucester,
N. J.
Pennypack Woods, Phil­
adelphia, Pa.




130 $2,385,000


109 3,704,000


100 2,321,000


120 4,367,000

Status as of Dec. 31,1946

Mutual Ownership Corporation negotiating for
Mutual Ownership Corporation operating under
lease, with option to purchase, signed Apr. 1,
Mutual Ownership Corporation operating under
lease, with option to purchase, signed July 1,
Mutual Ownership Corporation, acting as agent
for FPHA. Negotiations under way for lease,
with option to purchase.
FPHA manager, under direction of regional
office in New York City.

The value o f the mutual ownership plan for other public war hous­
ing of permanent construction, and possibly for the “ greenbelt” towns,
is recognized. It is particularly adapted for use in connection with*large apartment developments or other multifamily structures in
which direct purchase by individuals would not be feasible. In such
cases the F P H A would recognize and deal with mutual ownership
corporations of residents, provided the corporation can “ demonstrate
its ability to assure immediate occupancy of at least two-thirds of the
dwelling units. As a consumer body, it would be given preference
over groups or individuals offering to buy the project for investment
purposes.” 6
The corporation.—In order to enter into negotiations for purchase,
the tenants must form a nonprofit mutual home ownership corpora­
As a first step toward the formation of such a corporation in a
project in which there is sentiment for purchase, a tenants5 com­
mittee is selected in an election in which every leaseholder in the
project is eligible to vote. This committee acts as an organization
committee for forming and incorporating the new corporation.7
The corporation is run by a board o f nine trustees—three repre­
senting the public, three the residents, and three the Government.
During this period the trustees formulate bylaws, receive membership
applications, and issue membership certificates. When the residents
have joined in sufficient proportions to indicate that the time is ripe
for putting the mutual ownership plan into effect, the F P H A is
requested to lease the property to the corporation, with an option
6 Statement issued by FPHA.
7 The Federal Public Housing Authority of the National Housing Agency, Washington,
D. C., will assist the tenants during this stage, by providing information on the plan and
technical advice on the mechanics of forming a sound corporation.



to purchase at the end of 2 years’ operation. This 2-year period is
designed as a testing time in which the corporation, under F P H A
supervision, masters the problems of management and learns to carry
on independently.
The lease obligates the board of trustees to manage the project in
conformity with F PH A regulations and policies for operation and
maintenance, set forth in the lease, and under a budget approved by
that agency.
The board also collects the rents from the residents and from these
it pays all the operating expenses. The margin between revenue and
expenditure is paid to the FPH A , to cover interest and depreciation;
if the margin exceeds the cost o f these two items the surplus is credited,
to be applied (at the time o f final sale to the corporation) in reducing
the purchase price to the corporation.
A t the end of the 2-year period the corporation may exercise its
option to purchase. The purchase price is set by two appraisers, one
representing the Government and the other the corporation; if they
cannot agree they appoint a third person mutually satisfactory, whose
decision is final.
Conditions of sale.—No down payment is required. A t the time
o f sale the corporation receives title to the entire property, but gives
the FPH A a mortgage for the entire purchase price and a promissory
note for which the mortgage is security. These obligate the corpora­
tion to make, over a period o f 45 years, monthly payments totaling
approximately one forty-fifth of the purchase price per year, plus 3
percent interest on the unpaid balance.
Although the Government retains certain controls over the manage­
ment, in order to protect its investment, considerable responsibility is
vested in the members from the outset.
Cost to member.—The member pays a membership fee o f $50 at the
time o f joining the organization. He signs a contract, binding him­
self to purchase, on an installment basis over a 30-year period, stock
in the corporation equal to the value of the accommodations he plans
to occupy. He is given a lease on the dwelling of his choice, running
for as long as he continues to occupy it and make his payments.
These payments consist of a monthly rental which covers 3 percent
interest, insurance, taxes, administrative expenses, reserves for main­
tenance and contingencies, and the payment on his stock subscription.
As fixed amounts are paid on the principal each month, the interest
payments (which are figured on the unpaid balance) continuously
decrease. When the member has paid up the entire principal, his
monthly payments will include only the cost of taxes, insurance, main­
tenance, and repairs. Since the tenant is paying off his obligation in
30 years, whereas the corporation has a 45-year period of amortization,



he enables the corporation to make prepayments on the principal owed
to the Government, thus building up an advance equity or “ cushion” for
use in times of adversity.

On October 1,1945, at the expiration of the 2-year lease, the Greenmont Mutual Housing Corporation exercised its option and notified
the Government o f its desire to purchase. Negotiations over a period
o f a year were expected to result in a contract to purchase, for approxi­
mately $1,500,000, the 130-acre tract containing 500 dwelling units and
recreational and community facilities. As of mid-September 1947,7
all but 12 of the 500 resident families were members of the corporation.
These 12 will eventually have to vacate in favor of members unless
they decide to join.
The community is laid out in the form of a circle, with dwellings
in small groups on cul-de-sacs where children may play safely, away
from the main thoroughfare that swings in an arc through the project.
A t the northwest corner of the tract are the new community school,
the community buildings, and the shopping center.
In the center o f the tract, space is provided for recreational activi­
ties. A tennis court was being laid out at the time the project was
visited, and one large area was used by a group of airplane-model
enthusiasts. Opportunity for further beautification and recreational
facilities is offered by a creek (overhung by scattered trees and crossed
by several foot bridges), which runs through the tract.
Dwellings—facilities and costs.—The dwellings consist o f 1-story
single and double houses and 2-story double houses of rectangular
shape and flat-roof construction. Relief from monotony is obtained
by interspersal o f buildings of different heights and sizes, by the use
o f exterior paint o f different pastel colors, and the varying use by the
tenants o f flowers and shrubs in the yards. A 2-foot layer o f insulation
under the roof and 6 inches of water keep out the summer heat.
Every dwelling unit has a living room, utility room, kitchenette, and
from one to three bedrooms. Monthly rentals are as follow s: $27.50
for a 1-bedroom unit in a double house, $30.00 for a 2-bedroom unit
in a double house, $32.00 for a 2-bedroom unit in a single house, and
$32.50 for a 3-bedroom unit in a double house. These rentals are cal­
culated to cover amortization as well as upkeep. Operating expenses
at Greenmont have been kept low, averaging $10.86 per dwelling per
month during the year ending September 30, 1945. This figure in­
cluded expenses of management, janitorial service, utilities, repairs,
replacement, maintenance o f grounds and structures, waste removal,
and insurance.
7 When the project was visited by a member of the staff of the Bureau of Labor Statistics.



The average cost per dwelling was $4,793, of which $161 was cost
of land, $127 went for architectural and engineering costs, $935 for site
improvements, and $3,220 for construction of the dwelling and equip­
ment, $248 was cost o f community buildings, and miscellaneous items
averaged $102 per dwelling.
Community buildings and services.—The administration building
contains, besides the office of the project manager, a large hall where
community meetings are held, movies (mainly for the children o f the
project) are shown, and the various organizations o f the residents
(women’s club, boys’ club, men’s club, veterans’ group, etc.) hold meet­
ings and recreational and social events. The building also contains
rooms for smaller groups, space for several overflow classes from the
school, and a large well-equipped kitchen from which refreshments
are served on social occasions.
A smaller building near by houses the child-care center. Here a
staff of five, hired by the corporation, care for the smaller children o f
the community. The center is open from 6 a. m. to 6 p. m. It provides
breakfast, lunch, and afternoon snack, supervised play and rest periods,
and classes in music appreciation, singing, and drawing. Its charges
(for a 6-day week) for children of residents amount to $5.50 for chil­
dren who receive lunch and snack and $6.25 for those who also receive
breakfast; for nonresident children $1 more is charged. Up to 40
children are being cared fo r ; at the time o f the visit o f the Bureau’s
representative, 33 children were present and were taking their after­
noon rest on cots in a large, airy room. Quarters and equipment were
provided by the corporation; otherwise the center is self-supporting.
The commercial center, at the edge of the tract, contains a privately
owned cleaning establishment and barber shop, and a cooperative asso­
ciation which operates a meat and grocery store and a new drugstore.
The latter also serves lunches, ice cream, soft drinks, etc., and is plan­
ning to add a household-appliance and small-hardware department.
In September the grocery store was averaging about $12,000 in sales
per month and the drugstore about $1,500 per week. The association
has been handicapped by supply difficulties and by inadequate capital.
Some 325 families are members.

In mid-September 1946, appraisal of the Walnut Grove property
was in process, the Mutual Housing Association having completed its
2-year probational period. A ll but 12 o f the 250 families resident in
the village had become members o f the association.
The community lies at the edge o f the city of South Bend, Ind.,
between two main highways. The thoroughfare of the village leads
in from the highway to the west, at the north edge o f the village, and

C H . III.---- TH E



swings in a horseshoe curve through the tract, coming back to connect
with the same highway at the south side of the tract. A small curving
road gives access to the east highway at the top of the horseshoe arc.
Dwellmgs—facilities and costs.—The dwelling units are set diag­
onally on either side o f cul-de-sacs which lead off, also diagonally,
from the thoroughfare. Some diversity is produced by the use of
various levels and sizes of buildings. A ll the buildings, however, are
o f dark-stained, frame construction, so that the general effect o f the
village is not so pleasing as at Greenmont. The same style o f archi­
tecture—porchless and with flat roofs—is used as at* Greenmont.
The rooms are at two different levels, kitchen and living room being
at ground level, whereas the bathroom and bedrooms are several steps
higher. The elevation of these latter rooms provides space for a small
basement and enables cross-ventilation in the bedrooms through small
high windows which are set into the wall where these rooms rise above
the lower-level rooms.
Rents are the same as at Greenmont.
Community buildings and services.—The administration building
lies at the west side o f the tract, between the two ends of the thorough­
fare. It contains a meeting room and the cooperative store, as well
as the office o f the manager.
A space has been set aside, near the east entrance road, for a base­
ball diamond, and plans have been drawn for a small stadium there.
Swings, slides, and sand boxes are scattered here and there for the

732230°— 47------7

Chapter IV.— Housing with Self-Help Features
Penn-Craft {Pa.) Community
The Penn-Craft experiment dates from the spring of 1937 when the
American Friends Service Committee1 undertook a housing project
for 50 families of coal miners. Its declared purpose was to aid in
“finding greater economic security and better social life for the great
body of industrial workers in this country.”
The economic life of the region in which Penn-Craft is situated
depends on the mining industry. Private trade, banking, and rail­
roads thrive when the mines are working and languish when they are
idle. Mine activity, on the other hand, is dependent on industrial
activity and is greatest when the country’s industries are busy. Many
of the mines in Fayette County had been worked out and closed down
by the time the project was started, and others active during the war
but no longer profitable to operate have been closed down since.
Nevertheless, extensive coal fields are still available in the vicinity and
across the Monongahela River.
The problem of displacement and unemployment therefore is not
immediate, but must be faced eventually. The sponsors of the project,
anticipating that time, hoped not only to demonstrate the possibility
o f improving the living conditions of the miners through self-help,
under competent disinterested supervision, but also to insure a cushion
(in the form of subsistence homesteads) against hard times. The
project was to be an experiment in education, utilizing the spare time
of the miners to provide new and better housing owned by themselves
and eventually leading to greater family self-sufficiency with de­
creasing dependence on paid employment.
The work has been carried out in two projects, the first on 200 acres
o f farm land in Fayette County near Republic, Pa., the second
(now in process) on 165 acres near the first property. In both cases
financing, management, and supervision were provided by Friends
Service, Inc., a nonprofit organization. Procedures for the two
projects have in general been the same. The chief differences lie in
the size of the individual holdings (the 1^-3-acre homesteads in the
original community have been increased to 10-acre holdings in the
1 This committee was organized by the Quakers in 1917 “ as an avenue through which
young men and women of the Society of Friends could express their desire to help their
fellow men, not by bearing arms and participating in war, but by helping to heal the wounds
of war.” The program of child feeding in the bituminous-coal fields, undertaken in 1931-32,
at the request of President Hoover, led the committee to become interested in means whereby
unemployed and partially employed miners could produce their own food from the land
and develop new skills as a source of cash income. The project here described was the
outgrowth of that interest.




second tract, in the interests of greater economic security for the
families), in the removal of certain subsidies that were extended in the
first project, and in the adoption (in the second project) of a sliding
scale of repayments that takes account of financial emergencies affect­
ing family income.

In the first project only coal miners were eligible. Each applicant
family was required^ to furnish rather detailed information about
itself. In selecting the homesteaders, consideration was given to age,
financial resources, life expectancy, and productive capacity, o f the
family. In families having no financial resources, it was required
that there should be an “ evident family production for a period of 10
to 15 years.” 2 A basic requirement was that the applicants must
either be citizens o f the United States or take immediate steps toward
naturalization. Medical examination was required o f all the members
of the family before final acceptance.
Preference was given to applicants from Luzerne and Bedstone
Townships and the area immediately surrounding, but there was no
discrimination as regards race or creed. The result was a community
that included various religious faiths and Negroes as well as whites.
At least three-fifths of the settlers were o f English, Scotch, or Welsh
descent and the remainder included Slavs, Poles, Irish, Germans,
Italians, and French—a cross section of a typical mining community
in this region.
In the assignment of the land, the homesteaders drew numbered
slips entitling them to choice in the order indicated on the slip drawn.
Thus, the possessor of No. 1 was entitled to first choice among all 50
plots, No. 2 to choice among the remaining 49, and so on.
In the second project, selection is on the same basis as in the first,
except that nonminers are being accepted as well as miners.

Each homestead in the first project contained a dwelling, poultry
house, and other outbuildings. As the miners5 families are generally
large, the dwellings are good-sized 2-story stone buildings, each with
modern kitchen, living room, bathroom, and 2,3, or 4 bedrooms. Each
bedroom has a large closet. Each house has electricity, a front or
rear porch, and a full basement containing a central heating plant,
laundry facilities, and food-storage space. Some of the houses have
garages built into the side of the basement.
2 One exception was made to this, for a family consisting of an older man and his wife,
in view of certain exceptional considerations.



Houses in the second project will be of the same size, or larger, and
will have the same facilities.
In the first project the red stone native to the locality was used as
building material. In the buildings under way in the new tract, cinder
blocks are being used, because of the smaller amount o f labor required.
With mines running full time and employment at a high level, labor
time is at a premium and cannot, be spared for quarrying and shaping
the stone, whereas the cinder blocks can be made quickly and cheaply
by unskilled workers and are regarded as satisfactory.
In the first project, a standard plan was used for the 4- and 5-room
houses and two plans for the 6-room dwellings. Variety in appearance
was obtained by reversing the plans, shifting the location of the porch,
garage, etc. In the second project, use is being made of plans o f rural
houses drawn up by the former Farm Security Administration.3
The land plots o f the first 50 homesteads ranged from iy2 to 3
acres, depending on the topography of the ground. This furnished
space sufficient to raise a substantial part o f the family’s, current
food as well as some to store for winter. Additional garden space,
if desired, was available in the belt of land reserved for farming and
gardening. It is expected that the families in the new section, where
the homesteads average 10 acres each, will in times of steady employ­
ment use the extra land for the pasturage of dairy and/or beef cat­
tle, sheep, pigs, poultry, etc. When jobs are scarce the land can be
utilized for more subsistence crops. It is explained that the purpose
o f the second project is the further demonstration o f “the value of
land as a backlog of security” and that Friends Service desires that
production for home use be emphasized “ at all times * * * as
the thing of first importance.” 4

Upon becoming a participant in the homestead project, each family
signs a lease agreement with Friends Service, Inc.
The present lease agreement differs in certain respects from that
used in the building o f the first group of houses. The corporation
still obligates itself to supply engineering service, supervision, and
direction o f construction and installation of all public improvements,
and such skilled labor as is necessary. Previously, however, it sup­
plied the first two of these items, as well as the heavy tools and
equipment, without cost to the home owner. This subsidy has been
withdrawn, it being the feeling of the corporation that the project
3 Small Houses (U. S. Department of Agriculture, Farm Security Administration). Blue­
prints of houses contained in this pamphlet are available, on payment of a small charge
(30-70 cents) from the Extension Agricultural Engineer, New Jersey State College of
Agriculture, New Brunswick, N. J.
4 Statement issued by David W. Day, manager of both the first and second projects.



should stand on its own feet. Therefore the prospective home owner
is now charged $15 per month for “ overhead” from the time he
signs the lease agreement until he moves into his completed dwelling.
Originally the corporation agreed to advance a cash loan of $2,000
to each member, o f which not over $300 could be used for the hiring
o f the skilled labor necessary in construction, the remainder being
used for building materials, outbuildings, cost of land, the home­
steader’s share of the cost of water system and roads for the whole
project, and some small equipment; the loan may also be drawn upon
for temporary housing, pending completion of the permanent dwell­
ing, but must be repaid at the rate of $10 per month. In the new
agreement these sums are raised to $2,500 and $500, respectively, and
in the second project a down payment of $500 is required.
Under the original agreement the homesteader was to repay his
loan (beginning when he moved into his finished house) over a
period up to 20 years at the rate of $1 per month for every $200 bor­
rowed ; this amount included interest at 2 percent. A “ variable pay­
ment” plan is provided for in the new lease agreement, which relates
the monthly payments on the cash loan to the family income. In
prosperous times the family may repay its loan as fast as its income
permits. In hard times—subject to a required minimum payment of
$48 in any consecutive 4-month period—the payment may drop to
as little as $1 per month if the weekly gross earnings are between $5
and $10, or to nothing if they fall below $5.
The second lease agreement runs only for 1 year after date of oc­
cupancy, during which time the homesteader will pay the corporation
a rental which will include interest at 4 percent. A t the expiration of
the year period, the leaseholder may exercise an option to purchase the
homestead, in which case the corporation will assist him to refinance
his cash loan, using the regular loan agencies to do so. From the
proceeds o f the refinance loan the corporation will be repaid in full,
thus enabling it to turn over its funds more quickly and go on to further,
demonstration projects. In the original project, as noted, the corpo­
ration’s funds were tied up for periods up to 20 years. A t the end
of that time, or sooner, if the homesteader paid up his loan more
quickly, the latter would receive title to the property in fee simple,
but not until his entire loan was repaid.
Under both lease agreements the homesteader agrees to contribute
his own labor, and that of members o f his family, toward the construc­
tion o f his house and the houses of the other homesteaders; to make
his required monthly payments; to keep the premises clean and in
good repair; not to allow them to be used for any purpose obnoxious
or detrimental to the community; and not to sublet or tease the prop­
erty for commercial purposes except with the approval of the manage­



ment (corporation). Further, in the new lease (in order to eliminate
long lapses o f time during construction) the leaseholder binds him­
self to build a house “ready for occupancy,” within a period o f 18
months from the time he signs the agreement.

A ll the work has been done under the direction*of the project man­
ager appointed by Friends Service. He assigns the available work­
ers to the various types o f work in process at any given time, purchases
all necessary supplies, and determines the order o f progression o f the
In all the construction processes, the labor of the adult members of
the family and-of sons 16 and 17 years of age (formerly 15-20 years)
is used. The labor o f adults is reckoned in terms of man-hours; that
o f the youths in terms o f “boy-hours,” one boy-hour being equivalent
to three-fourths o f a man-hour.
In theory the expected labor performance o f the homesteader (or
his sons) is at least two 8-hour days per week. Actually, the amount
has varied widely, depending largely on the extent of paid employ­
ment at the mines and therefore on the free time available to the
At the end of each day the amount of time spent at work at the
project is reported by the homesteader to the office and is entered to
his credit. I f it was spent on the dwelling of another colonist, it is
also entered as a debit against the latter’s account. Once a week each
homesteader receives a statement showing the status of each of the
houses, in terms of labor-hours. This statement shows for each
homestead the date the colonist was accepted into the project, the total
hours he has worked since that time, the time worked during the
week for which the report is made, a “ progress estimate” showing
the hours that would stand to his credit if the colonist had put in the
two 8-hour days a week regarded as standard, the total “purchases”
in labor-hours spent by other homesteaders on the house, such pur­
chases during the week of the report, and the balance of labor-hours
still owed. Once a month he receives a statement showing the labor
hours worked on his house and by whom. Statements are also ren­
dered upon completion of each portion of the work, showing the status
o f the cash accounts.
Each homesteader binds himself in the lease agreement to repay
the amount of time spent on his house by an equal amount worked on
his neighbors’ dwellings. Failure to carry out this promise may (as
for failure to meet rent payments) result in expulsion from the project.
No homesteader, having repaid his labor debt, is allowed to accumu­
late more than 100 labor hours’ credit thereafter. This surplus is



used for extra labor, such as for grading of lawns, laying of sidewalks,
making driveways, etc., needed after the House is completed.

In the original project, in 1937, the nonprofit organization, Friends
Service, Inc., which was formed to provide management and supervi­
sion, used contributed funds to purchase a 200-acre farm, 2 miles south­
west o f Republic (near Uniontown), Pa. The purchase included the
land, which was roughly in the form of a shallow bowl, a large red
brick house, a small dwelling more than 200 years old, and several
outbuildings. The center section of about 100 acres was divided into
homestead plots o f iy2 to 3 acres each. The rest of the land was kept
for woodland and for farming, grazing, and the raising of hay and
feed for the homesteaders’ cows and poultry.
Before any work could be started on the dwellings, however, much
“ community” work in the form of roads, utilities (water, sewer, elec­
tricity) and clearing out of brush had to be done and this labor served
as a try-out test for the applicants.
Row the homes were built.—Only two workers were on a cash basis;
these were a skilled mason and a carpenter under whom, as gang fore­
man, the homesteaders and their sons worked. The plastering was
done by the homesteaders under the direction of a plastering contrac­
tor hired by the corporation. Most of the homesteaders were un­
skilled in construction work, but the specialized skills of one or two
members (an electrician and a carpenter) were utilized.
The costs were minimized by making as complete use as possible of
materials and resources at hand. In the first project native stone
available on the site was quarried and cut by the men, and the sand
used in the cement work was crushed in the community’s own stone
crusher. In the new project, because of lack of labor time for quarry­
ing and shaping the stone, cinder blocks are being used as construction
material. These are made by the men themselves on a simple machine.
Some 70,000 feet of timber has been cut from the community’s
woodland; a local sawmill cuts this into lumber of required sizes.
Various labor-saving and simplifying devices have been used to
enable the unskilled homesteaders to do as much of the work as pos­
sible. Thus, the project manager devised a movable form (see dia­
gram, p. 84) by the use o f which the men could lay the stone in the
walls quickly and satisfactorily without supervision by a skilled
mason. It is estimated that this saved some $200 per house. Interior
trim, door and window frames, etc., were made by the homesteaders
themselves from odd lots of lumber obtained at bargain prices.
Improvements in skills and processes resulted in steadily reducing



costs. Thus, the first f oundation cost of about $117 was eventually
reduced to about $30.
Progress of the work.—Excavation on the first basement was started
in August 1937. Because the mines were fairly active and the miners’
free time therefore limited, the construction was slow. The first house
was not ready for occupancy until November 1940.
In the meantime, in order to obviate so much travel between the
mine village where the prospective homesteaders were then living and
the site o f operations, it was decided that the poultry house that was
to be a part of each homestead should be built first—and that this be
used for family quarters until the house proper was completed. These
buildings furnished shelter during the construction period and in a
few cases were still being occupied in September 1946—by the families
o f veteran sons of original homesteaders.
By the summer of 1943 all 50 houses were occupied, and the project
as originally planned was complete. Since then a further step toward
greater family self-sufficiency lias been undertaken and is now under
way. A nearby farm of 165 acres has been bought and divided into
15 homesteads of 10 acres each. By September 1946, 11 of the new
homesteads had been applied for; 8 of the applicants are ex-service­
men. Work was already in progress on 2 of the homesteads at the
time they were visited.
The Penn-Craft homesteaders in the original project have spent
the time since completion of their houses in landscaping their places
and paying on their cash loans, and have made good progress. Thus,
with the average expenditure of some 2,750 labor hours and $2,000 in
cash they have been able to obtain well-built stone houses that were
estimated in 1939 to be worth from $3,000 to $4,000 and would bring
at least half again as much today (see fig. 1, p. 47).

One has only to compare the attractive, substantial dwellings
scattered over the gently rolling green land of Penn-Craft Community
with the unpainted shacks standing in stark rows, unrelieved by grass
or trees, in the nearby mine “ patches” where the homesteaders for­
merly lived, to realize what a long step upward this experiment has
meant in their scale of living.
Under the original plan the minimum monthly payment is $12.58
per family, but most of the families have paid at a considerably higher
rate. In September 1946 not a single family was in arrears, and seven
had completed their payments and received the deed to their home­
stead. Two houses had been sold, one to the homesteader’s son.
Lease modifications in the light of experience.—The original lease
contained no restriction on sale, it being felt that opportunities for

C H . IV.---- H OU SING W IT H



the sale o f property in a community as small and as isolated as PennCraft would be so few that that fact alone would tend to prevent un­
duly high sale prices. Experience under the plan made some restric­
tion and other changes seem desirable. Under the new lease agree­
ment the leaseholder agrees not to sublet or assign his interest without
the consent o f the managing corporation. In the event o f his death or
o f circumstances necessitating his removal from the project the man­
agement is to “cooperate in endeavoring to find a suitable successor

F ig . 2.— House built by self-help at Penn-Craft.

to take over the homestead.” A ll questions regarding other restric­
tions on the property are to be decided by a “ Restriction Committee”
composed o f five members— homesteaders— elected by vote o f the
homestead association members.
A revised lease with the same restrictive features, has also been
drawn up for the first-project homesteaders. B y September 1946
all but 8 o f the 50 had signed such leases.
Community life and activities.— Each fam ily becomes automatically
a member o f the Penn-Craft Community Association (the original
project) or the association that will be formed to have general manage­
ment o f the new project. The community association functions like



the old “ town meeting,” at which questions o f community interest,
regulations regarding members’ obligations and rights, and other
matters are discussed and decided.
Community activities center in the brick building which was origin­
ally the farm residence. A well-baby clinic and maternal health pro­
gram, started in Penn-Craft, has become part o f a larger, betterequipped center in the nearby town of Brownsville.
Cooperative enterprises.—The Penn-Craft Cooperative Store,
started with 5 members and a capital o f $25, soon after the project was
undertaken in 1937, grew slowly. It had 20 members (and 30 partly
paid up) and $150 capital by the middle o f 1939; a year later its
membership had increased to 54 and its capital to $256. Originally,
membership was limited to families living on the project. This,
however, as the preceding figures indicate, placed a very definite
limitation on the size and usefulness o f the association. Membership
was therefore thrown open to persons in the surrounding localities,
resulting in a quick expansion. By September 1946 the association
had nearly 500 members and was doing a business of some $7,000
per month. A new building has been constructed, and it is occupied
by the store and a cold-storage plant which is a department of the
store. This plant has 340 lockers, all rented; an addition o f 215 will
be built as soon as sufficient capital is raised. Lockers rent for $12.50
per year. As the facilities are expensive to build, locker patrons, even
though already shareholders in the store association, are required to
contribute $35 capital each. Much o f the surplus garden truck,
formerly canned by the housewives, is now being frozen and stored in
these lockers. When the Bureau’s representative visited the plant,
in September 1946, several whole slaughtered beef animals, not yet
cut up into meat, were hanging in the big freezer room. Practically
all o f these and the meat contained in the individual lockers, accord­
ing to the project manager, came from animals raised by the members.
The amount o f such production will be considerably increased in the
new 10-acre homesteads if present plans are carried out. The credit
union started in mid-1940 was not successful and was liquidated. An­
other is now being planned.
Sources of cash employment.—The coal mines, of course, are the
main source of cash employment, but the community has one industry
o f its own—a knitting mill specializing in women’s sweaters. This
factory, a large well-ventilated well-lighted plant, was built by the
homesteaders, each donating 100 hours of work. It was forced to
suspend operations during the war, because of inability to obtain yarn
o f the quality needed but is now leased to a private employer.
Here 80 people are employed; as the community cannot furnish a
sufficient number o f workers, some 70 percent are from the territory



around Penn-Craft. The girl employees earn from 80 cents to $1.00
per hour; the boys earn up to $1.07. The workers have recently joined
a United Mine Workers District 50 local. The mill is running full
time, and has a good market. Its output is divided about equally
among the New York, Chicago, and San Francisco markets.
The community farm, previously operated by the management, has
been sold to a young homesteader.

Iona {Idaho) Self-Help Cooperative
To fulfill an urgent need for habitable living quarters, for amounts
which they could pay, 15 families in Iona, Idaho (later joined by 6
others) undertook a self-help housing project in 1934. A small revolv­
ing fund was obtained under the State-Federal self-help program in
effect at that time, and this was used to make loans to members for
housing purposes.

Under the plan, each participant was required to own a lot with title
clear. Upon fulfilling this requirement he received a cash loan from
the revolving fund in an amount not exceeding $500, plus a loan of
cooperative labor (i. e., part-time assistance in the construction of his
house by his fellow members). I f his application was favorably re­
ceived by the cooperative, it was forwarded to the State corporation
and his lot was deeded, as security, to a disinterested trustee acceptable
to him and to the corporation. The cash loan was made available
and the materials necessary for construction were purchased by the
cooperative’s bonded accountant, so that the actual money did not pass
through the hands o f the borrower.
Construction was usually begun in a slack period when other em­
ployment was not available. On a particular dwelling the labor con­
tributed by the borrower’s fellow cooperators was charged against him
and credited to their individual accounts on the books of the coop­
erative, at the rate of 30 cents an hour. This labor had eventually to
be repaid by the owner with his own labor on other members’ houses.
The cash loan usually had to be repaid over a period of from 2 to 5
years. Payments ranged from $3 to $10 per month, which was gener­
ally less than the amount previously paid in rent. When the loan was
repaid and the labor claims also satisfied, the borrower received title
to the property.
Generally, three loans were necessary to provide for the construction
of a complete house. The first loan provided the concrete basement,
which was arranged into several rooms—ordinarily, kitchen, living
room, and two bedrooms—so that it could serve as living quarters
while the first loan was being repaid. The second loan covered the



cost o f the shell of the superstructure—walls, roof, and windows. The
third loan provided for the material for finishing the dwelling. The
houses were equipped with cesspools (as there was no general sewage
system in the vilage), running water, and electric lighting. A ll o f
these represented luxuries, compared to the conditions under which
the members formerly lived.
Thus, in a period of 6 to 10 years the family was enabled to pay
for a home worth some $2,000 to $2,500, without owing more than
$400 to $500 in cash at any one time or paying more than $12 in interest
in any year. The exchange of labor of course accounted for a very
great reduction in the cash outlay otherwise necessary. Such labor
was carried on under the guidance of a carpenter member. Also, in
order to reduce cash expenditure, the members salvaged materials from
old buildings being demolished, made building blocks, utilized native
stone (replacing the concrete originally used, which had to be pur­
chased) , and effected various other economies.
In case o f sickness the borrower was given an extension o f time on
his loan. In order to protect the families in case the breadwinner
died, the association adopted a plan of “widows’ insurance.” Under
this plan each borrower paid 10 cents a year on each $100 o f his cash
loan still owing. I f the borrower died, the association would take a
mortgage in the amount still owed and give the widow a deed to the
house, permitting her to live there the rest o f her life without further
payment. Upon her death the heirs could obtain possession by repay­
ment of the mortgage; failing this, the house would revert to the
The housing project was successful and made earnings from the
start. In the first 6 years of operation the revolving fund grew (by
payment of interest, fines for delinquency, etc.) from $1,650 to $3,000.
Although the fund provided sufficient money to finance the participat­
ing group, one of the leaders pointed out that “ if there had been more
in the fund we could have touched more people. As it was, we had
to limit our membership growth to those we had funds to serve.”

The success of the housing venture led the group to look about for
other ways in which the living standards could be improved by co­
operative means. Medical and dental care were obtained under a plan
worked out with two local physicians and a dentist, by which each
member family could obtain up to $50 worth o f care. The bill was
covered by a rider (or mortgage) on the house contract, payable after
payment was completed on the house.
A credit union (with about $100 in capital) was started and not
only aided in the credit problems but assisted in a food-conservation



program which the group undertook. Garden plots were worked to
produce food for the families’ consumption. In the spring of 1938,
each member family pledged itself to store, by 1940, ten 10-gallon cans
o f nonperishable food, and to raise, each season, one animal to butcher.
This was “ in anticipation o f future economic depressions,” and with
the idea that it would enable the family to weather 6 months without
One member wrote, regarding his participation in this program—
I just butchered our self-help pig which gave us 315 pounds of meat. We have
enough lard to last our family a year; also some bottled sausage. We will have
our winter’s meat and two cured hams and some salt bacon for next summer.
We fed this pig lots of weeds from the garden and scraps from the house, together
with $6 worth of wheat, and we sold a litter o f pigs for $40. W e have on hand
now 600 pounds of flour, 30 sacks of potatoes, 400 pounds o f squash, about 100
pounds o f dried beans, together with a lot of carrots, dried corn, onions, cabbage,
etc. We have only 1 ton o f coal, but we have cut enough willow to last us 3

A t the end o f 1938 some o f the families still had insufficient milk
and butter. The group therefore voted that every family without a
cow must take a loan of $5 from the credit union. This was to be used
for the purchase of a heifer calf, in the spring o f 1939, to be raised as a
source of these products.
Thus, in the course of the program, the families learned to work
together for their own benefit and for social purposes. By helping
themselves they improved their living standards, raised their morale,
and learned new skills which contributed to their economic re­


Oakwood Community Chapel Hill (N. C.)
The project at Chapel Hill was directed by the Service Employees
Corporation, a private organization whose stockholders were key men
in the business organization o f the University o f North Carolina.
This corporation was formed in 1936 for the purpose o f providing
social and recreational facilities. The corporation having assisted
three employees to obtain building sites on easy terms, one o f its officers
conceived the idea o f providing houses, largely on the basis of exchange
of labor, for the building service and maintenance workers employed by
the university.
Membership in the housing group was limited to employees in the
university service plants (building-maintenance department, laundry,
service stores, and accounting, purchasing, and clerical divisions) and
the university auxiliary enterprises which serve the university and
the town o f Chapel Hill (water department, telephone exchange, and
electric light and power production and distribution).



The housing scheme was launched in March 1940. Employees who
wished to participate were invited to come together and organize them­
selves into the “ Employees Housing Group # 1 .” Members were to
work together under a foreman selected by themselves, the project
being under the auspices o f the Service Employees Corporation. A
40-acre tract of land, about 2 miles from the center of Chapel Hill,
was -obtained for $2,200 and was christened “ Oakwood.” Part o f the
ground was laid out in 50 plots 125 by 160 feet. The lots were priced
at $210 each and were distributed by the drawing of lots. It was
planned to erect the houses, 3 at a time, in the order o f the number
drawn. Thus, holders of lots Nos. 1, 2, and 3 were to have their
dwellings built first, then those o f Nos. 4, 5, and 6, and so on.
Under the plan the amount to be expended on materials was limited
to $2,000 per house, and no loan could exceed 2 ^ times the borrower’s
annual income or a maximum of $4,500.
An architect was engaged at a fee o f 2 percent of the cost o f construc­
tion— a saving of 2 percent. Bids for the main structure o f the houses
were let on contract. The Service Employees Corporation purchased
the building materials and supplies on competitive bids, and the fix­
tures and equipment for the houses were bought through a local
wholesaler at a saving of about 25 percent. A ll of the road building,
clearing, grading, and basement and septic-tank excavation was done
by the participating members, as well as the painting, electric wiring,
and installation o f the plumbing and the heating system.
Labor accounts were kept in terms of hours worked, the member
receiving credit for time worked on other members’ dwellings and
being debited with hours worked by them on his house. The project
was financed from funds of the Service Employees Corporation, by
loans from an insurance company, and by F H A insurance. Title to
the property was retained by the corporation until each participant
had satisfied his labor debt. When that was done, the member re­
ceived a deed to house and lot and was financed for the exact amount
expended on it.
The project involved a total o f 14 houses of brick or frame con­
struction, in a variety of styles. These dwellings ranged in cost from
$2,750 to $5,000, or about 25 cents per cubic foot. The labor cost o f the
typical house o f five to six rooms averaged about $1,200, of which the
personal labor o f the members accounted for about $500.
The member had to make a down payment o f 10 percent o f the total
value, but o f this the cost o f the lot constituted a considerable propor­
tion. Initial monthly charges on a typical house averaged $21.54 plus
$1.80 for taxes and insurance, or a total of $23.34.



Watsonville {Calif.) Project
This project was initiated by two businessmen (brothers)1 o f W at­
sonville, but involved a considerable amount of self-help by the families
which participated. The idea originated in 1938, as a means o f re­
tention o f four skilled workers on the farm of one of the brothers, as
well as o f disposal o f surplus land in their grandfather’s estate, not
fitted for the irrigated agricultural operations o f the district.
Watsonville was and is the business center of a fertile farming
region, devoted to large-scale production o f apples, lettuce, artichokes,
and other truck crops. Large amounts o f agricultural labor were
needed, but local housing facilities for them and other low-income
workers were deplorable. Many, for lack of more reasonably priced
accommodations, were living in shabby tourist cabins for which they
were paying $5 a week.

A 13-acre tract owned by the Porter family was divided into 5 plots
o f 2 acres each and 1 o f 3 acres. As no local banker was willing to
finance the scheme, the brothers signed a note for the entire obligation.
To carry out the project, a new company (Pioneer Homes, Inc.) was
formed. F H A insurance was obtained under Title I o f the National
Housing Act, under which no down payment was required.
The land was sold to the families at $200 an acre. The house was
a structure, 24 by 24 feet, divided into four rooms—living room, two
bedrooms, and kitchen. It could be built for about $300. Running
water was the only modern convenience provided in this first group.
Building materials and tools for this and later groups were obtained
through the building supply company o f one o f the brothers. It was
agreed that the men o f the families would undertake to provide what­
ever outbuildings were needed. The total obligation assumed by the
tenant was therefore about $700. As the men contributed their labor,
by the time the house was completed the family already had an equity
o f 25 to 35 percent. The remainder o f the obligation was to be
paid off in 5 to 7 years, in monthly payments ranging from $10 to $15
per month.

As the plan became known, more applications were received than
the sponsors could accommodate. A second group o f dwellings was
undertaken, on a tract a short distance from town, lying between the
county road and the main railroad line between San Francisco and
Los Angeles. As, normally, 53 trains a day pass over this route (more
1 John and Tom Porter.



during wartime), the sponsors thought this would be a drawback.
To their surprise, the plots nearest the railroad were spoken for first;
the people liked to hear the trains going through.
These and succeeding homes were built under Title I I of the
Housing Act (as amended), which required a down payment of 10
percent, but allowed the purchaser to make this payment in labor. The
later dwellings had more modern conveniences and cost considerably
more than the first group, but embodied the same self-help principle,
and the purchaser had as long as 15 years in which to pay off the
mortgage loan.
Altogether, some 70 houses were built in Watsonville, 24 in San
Jose, and 19 in Stockton, on land totaling about 400 acres. The plan
was aimed to care for low-income families for which no housing
(within their means to purchase) was available, and for which none
was being provided. They included families of agricultural workers
(local and m igratory), mechanics, artisans, low-paid clerks, etc. O f
the first 37 families provided for, only 4 earned as much as $1,200 a
year, 7 earned between $600 and $800, and 4 had an income of less
than $600 per year. For the first 6 families the average cost, as noted,
was about $700; this did not include the value of the man’s contri­
bution in labor. For the $1,200 income group the average cost was
about $1,360, and for the lower income groups the average was about
$950. For these houses the monthly payments per house ranged from
$10.32 to $19.89.
In this unorthodox proceeding, in which the purchasers were penni­
less and had no initial cash stake, the sponsors counted on their
self-interest. The brothers felt that the prospect o f permanent owner­
ship o f a well-built house which the families could obtain for monthly
payments smaller than they had been paying for inferior rented
quarters would be sufficient incentive to make them “stick.” That
they were justified in this belief was indicated by the fact that at
the end o f the first year not one o f the first 37 families housed was
in arrears; during the first 2-year period only one family was unable
to keep up its payments.

This plan did not embody the Eochdale principle of cooperative
ownership; here each family purchased its own home outright.
Neither did the plan utilize the exchange of labor which was the
principal feature in the Iona and Penn-Craft projects. In Watson­
ville, each man worked only on his own house.
A family accepted for participation, in Watsonville, was given a
choice o f house plans within price limitations varying according to



its income. The required family equity (in contributed labor) would
be 10 percent o f the purchase price (land and house) plus closing
charges. The man would be shown a cost sheet giving, in the form
of “ subcontracts,” various processes open to him to perform if he
was qualified to do so. These were so designed that even an unskilled
worker would be able to acquire his 10-percent labor equity; a man
with some skill would acquire considerably more.
For each o f the processes performed he would be credited with an
equivalent value, based on the records o f similar work at union rates.
The “ subcontracts” covered such work as clearing and leveling the
land, shoveling, excavating for septic tank and for 45 feet o f drain,
digging for the foundation, pouring concrete, laying the subfloor and
the sheathing for the roof, certain inside carpentry, some interior
and exterior painting, etc. The early experience demonstrated the
need of trained supervision and this was supplied in the later
Local unions cooperated by relaxing their restrictions, to allow a
qualified person to perform any work on his own home, in order to
establish his labor equity. Union cards were required only for work
requiring inspection (such as plumbing and electric wiring). In
San Jose the plumbers’ union permitted the home owner to serve as
plumber’s helper on part o f the plumbing jo b ; painting was allowed
only on condition that it be started and finished by union labor.
Problems, o f course, arose. In some cases the labor contribution
lagged because paid employment left the home owner little time for
work at home. Some o f these families were permitted to move into
their unfinished houses and to complete their labor contribution later.
In other cases, the other extreme was noted; men became so interested
in building their new houses that they neglected paid jobs, even to the
extent o f family privation. The sponsors therefore discouraged any
construction work that interfered with cash employment.
In some of the last houses built under the plan, before the war
stopped private building, houses were erected on plots o f city-lot size.
In the others, enough land went with the house to permit a good deal
o f subsistence gardening, as well as the keeping o f chickens, a cow,
and even a pig or two in some cases. One man specialized in berries
and cleared some $1,200 in 1945 on this crop alone. Another, a for­
mer Alaskan “ sourdough,” made his place almost self-sustaining; this
became his vocation, and he took paid work only in amounts sufficient
to meet expenses that had to be paid in cash.

Chapter Y .— Other Joint Housing Projects
Sponsored by Cooperative Housing Associations

Crestwood is the name o f the housing development sponsored by
the Wisconsin Cooperative Housing Association, in Madison.
The original group that planned the housing project consisted of
persons employed in the various State offices. Through their organ­
ization, the Wisconsin State Employees’ Association, the first steps
were taken in 1936. Later, that association gave way to the housing
association proper. Present membership includes not only State
employees but also Federal employees, members o f the State univer­
sity faculty, a few local businessmen, and some returned veterans.
Actual construction of the houses did not begin until 1938. In the
interval, a tract o f 75 acres of land (space for 200 dwellings) was
acquired in a convenient suburb, and plans were drawn up for a
large-scale development of houses o f harmonizing architecture with
the understanding that all houses would be owned by the association
and leased to the individual members according to accepted coopera­
tive standards.
Long negotiations with the Federal Housing Administration, from
which it was desired to obtain loan insurance, resulted in the associa­
tion’s changing its original plan and providing for individual owner­
ship of both lots and houses. This long delay also entailed consider­
able loss to the association, in preparation and scrapping of plans and
in decrease o f members as they lost patience and interest. Finally
the project plans, covering 20 houses, were approved by F H A , and
construction of the first house began in August 1938.
Community Lay-Out

By taking over the entire tract, the association was able to plan
in advance the lay-out of a whole community. In this work the asso­
ciation was fortunate in having the assistance of a member with long
experience in land utilization. Under his guidance, the plotting of
the tract was carried out after a topographical survey had been made,
to insure the use of all the natural features to the best advantage.
The whole tract (about half a mile long and quarter of a mile wide)
forms a natural amphitheater, with the land sloping up, first gently,
then more steeply, to the south, west, and north. The elevation at
the highest point is about 1,000 feet above sea level, representing a
rise of about 100 feet from the lowest point of the “ bowl.” The top



o f the slope is thickly wooded (hence the name “ Crestwood” ) and it
is planned to leave this as community land for everyone to enjoy.
A broad avenue, named for the land-utilization adviser (who was
the first president of the association), curves through the tract at the
edge o f the central bowl, and from this avenue dead-end streets run
up toward the woods, providing quiet as well as safety from traffic.
The wooded slope affords shelter from the north winds and shade in
the afternoon. The slight pitch of the streets (which have center
drainage) helps to keep the streets free from rain and snow. A nar­
row strip o f community land also runs down between each two cul-desacs. In the section that has been developed, one of the strips contains
a fully equipped playground, with a supervisor in charge during the
summer months. Here also a skating rink is maintained in the winter.
In the next park strip, which has a 40-foot drop, other winter sports,
such as skiing and tobogganing, are planned. Altogether, about 20
percent o f the entire tract is left as community land, title to this area
being held by the cooperative association.
In the lowest part of the bowl, near the center, lies an area with
rich alluvial soil, which is used for home gardens. Each member is
free to utilize a section of this area. In the garden area the associa­
tion also maintains a tree and shrub nursery with over 6,000 plants,
buying these when very small and raising them until they reach usable
size. These products are available at cost.
Crestwood is situated on the outskirts of Madison, 5 miles from the
State capitol. It is served by a bus line, and members can reach the city
in 10 to 15 minutes’ ride. There is a grade school at the edge of the
settlement. A shopping center, providing varied services, is situated
about three-fourths of a mile distant.
Financing of Community Services

The association was incorporated for $100,000 of stock, half com­
mon and half preferred, at $50 per share. The non-interest-bearing
common stock, o f which each member had to have 3 shares, went as
payment for the land.
When the association purchased the tract, electricity was available,
but there was no water supply and the metropolitan sewer system
ended a mile away. Both water and sewer, therefore, had to be fur­
nished by the organization. The proceeds from the preferred stock
were used to help finance the installation of the water and sewer sys­
tem and each member was required to purchase a minimum of 6 shares.
Bonds totaling $7,000 were also issued.
A 350-foot well furnished the water, the pumping machinery being
housed in a neat station.



The association organized a sanitary district to sponsor the installa­
tion o f the sewey, turned over to it the sum o f $11,000 collected in
preferred stock,1 and received in turn 30-year assessment bonds paying
5 percent interest. The money was used to build a mile-long installa­
tion, connecting with the Metropolitan Sewer District trunk sewer,
and to lay sewers in the streets of the subdivision. This connection
will be controlled by the association for 30 years, during which period,
if other subdivisions wish to use the sewer, a portion of the original
cost must be assumed by them to retire the bonds held by the Coopera­
tive Housing Association.
The surfacing o f the streets was done by the township, but the pre­
vious leveling o f the street space and the razing of the farm buildings
originally on the place were done by the association and cost about
When the association has completed development of all the 200
houses that can be accommodated on the land, it will have received
more than $100,000 for its stock and land. The difference between
actual outlay and this figure represents the association’s “ potential net
earnings,” which may be distributed to the members in the proportion
that their outlay has borne to the total or may be used for further
community development, as the members decide.

Cost to Individual Member
In order to insure that all the members shall be “ active,” the bylaws
specify that no person shall be admitted unless he “ executes and files
with the association a written statement that he intends to participate
in the cooperative housing program of the association and to make
his residence in the community * * * as soon as reasonably prac­
ticable and feasible.”
Each person accepted is required to subscribe for 3 shares o f com­
mon stock at $50 per share (to apply as part payment on the lot
selected). These shares may be paid for in installments, but if so a
promissory note or other evidence of indebtedness must be given, the
voting privilege being extended after at least $50 is paid in.
Having been admitted to participation, the member is entitled to
select a lot. Selection is by “ priority of the dates o f stock subscrip­
tion.” The lots average 60 by 120 feet. The basic price per lot is
$450, but the more desirable locations run higher. In fixing the price,
certain “ desirability” factors (seclusion, view, and environment) were
taken into consideration, each factor carrying an extra charge of $50.
For the less desirable lots, the $450 covers the total cost o f lot and
stock; for the most desirable the cost runs as high as $600, and one lot,*
aBy the end of 1946, it was reported, most of this preferred stock had already been



high on the hill road, was priced at $700. The average cost o f the
lots already bought is about $500. This represents a considerable
saving from the current local prices for fully serviced real estate, and
it is possible that the price may eventually be still further reduced by
refunds, after the entire development is completed and all costs are
When the member has completed payment for his stock, plus any
“ desirability” factors, he receives title to his land. He is then ready
to negotiate for a dwelling. Ordinarily,2 from this point onward, he
acts for himself. The construction of his house is his responsibility,
except that he may utilize one of the association’s floor plans drawn
for the association under the original scheme of collective ownership.
Before construction may be undertaken, the plan chosen must be
submitted to an architectural committee, in order to insure that the
style will not clash with that of the rest o f the houses. The total cost
may not fall below $3,000. The member must also furnish evidence
o f eligibility for F H A insurance or of ability to finance construction
without such insurance.
Some of the members have reduced costs by doing some of the work
themselves. Thus, one member who was an electrician wired his own
house. He and several o f the other members did their own painting.
Most o f the financing was done through two local lending agencies,
with F H A insurance. The member’s monthly expense includes amor­
tization payment, interest, and certain community charges. These
latter include water rent (proportioned to use, minimum $17 per year),
and 25 cents per month for garbage collection. The assessment for
sewer is incorporated in the taxes and averages $2 to $3 per year.
A member desiring to withdraw has the right to sell his house,
provided the purchaser is acceptable to the association, and provided
his stock is transferred to the purchaser. However, he must give the
association the first option to buy.
Types of Dwellings

The houses exhibit a variety o f architecture and o f material. One
o f the larger houses has a field:stone front. Several are o f wood,
being either painted or stained, but perhaps the greatest number are
constructed o f 8-inch concrete blocks with cores filled with waylite.
In architectural design, the dwellings range from the Cape Cod cottage
to the most modern style. In cost, they have ranged from $3,500 to
$6,500; before the war the association tried to discourage the building
o f houses costing more than $5,000.
All the Crestwood houses are of the one-family type, consisting of
a kitchen, dining room or breakfast nook, bathroom, living room, and
2 But see p. 60.



(with one exception) two or three bedrooms; the exception is a fourbedroom house. They are equipped with oil burners, and a number
have fireplaces as well. A ll but two have built-in garage. A recrea­
tion room is also a feature commonly found. Each house has standard
plumbing and electrical equipment, and about half the houses are of
fireproof construction.
Practically none of the dwellings faces squarely any of the cardinal
points o f the compass. Generally the house is turned slightly, so that
each room receives sunlight at some time of day.
Present Status of Association

Up to November 1946, only one division had been opened, and con­
struction had taken place on only the three northernmost cul-de-sacs
and the outer (hill) road. In that section, 38 dwellings had been
completed before war conditions halted private building. During
the war period, all but 2 of the vacant lots remaining were sold to
new members. However, as most o f these were not veterans and could
therefore not obtain priorities, only 6 houses (all those o f veterans)
have been erected since the resumption of building.
An additional street was opened for development in the autumn of
1946 and one house had been begun by mid-November 1946. Another
street will be opened in the summer of 1947. Installation o f sewer and
water facilities for this additional land was financed by the sale of
4-percent 10-year callable bonds. This bond issue was offered to mem­
bers o f the housing cooperative and is reported to have been over­
subscribed 75 percent. The new facilities are part o f the Crestwood
Sanitary District, the commissioners of which are three memberresidents o f Crestwood. The sanitary district now also includes the
adjoining section of Glen Oak. Several parcels o f unimproved land
in that section have been bought by the Wisconsin Cooperative
Housing Association; its lots there are being sold at prices ranging
from $150 to $300 each.
In 1940, using funds loaned at 2 percent by an anonymous lender,
the association undertook a new step—the building, itself, of dwellings
at cost for prospective members who do not have the time or inclination
to proceed individually. Three such houses had been erected before
the imposition o f wartime building restrictions. In such cases the
procedure is as follows: The new member is required to purchase the
lot, on the usual basis or, possibly, may even be accepted on a rental
basis, the accrual over expenses being used to finance the family mem­
bership. When the householder has paid for his lot he makes the
usual arrangements with a lending agency and the FH A. The loan
from the lender is used to pay the housing association and the money



thus released is used in the construction o f another house on the same
Extent of Cooperative Enterprise

The achievements of the cooperative association have been the fol­
lowing: (1) The purchase and plotting o f the tract, (2) the financing
and installation of a water and sewer system, (3) the creation of a
sanitary district, (4) the furnishing of architectural service, (5) the
supplying o f title insurance for members, and (6) the building of a
small number o f houses itself. As noted, all but 3 of the houses were
constructed by individual contract and the association has no control
over them except to pass upon the general style o f architecture, to see
that the cost does not fall below the minimum o f $3,000, and to pass
upon the acceptability of purchasers. A withdrawing member must
give 60 days5notice and give the association the first option to buy, at
either par or book value (if the latter is less). Should the association
not exercise its option, no controls are imposed as to sale price. Dur­
ing the life o f the association several dwellings have been sold, but
none, it is said, “out o f line with relative costs of building.55 Two
houses for which disproportionate prices were asked remained unsold
“because members o f the community do not care to have their friends
buy at the prices asked by the owners.553
Each member has one vote only, regardless of his investment, and
no proxy voting is allowed.
In November 1946 the association was negotiating with the U. S.
Weather Bureau for an arrangement whereby the latter would in­
stall equipment for the measurement of south-exposure solar radiation,
to determine its value in the heating o f houses. Some use o f this prin­
ciple has already been made in Crestwood; the first president of the
association reports that its use has made possible the heating o f his
6-room house, with oil heat, for less than $75 per year.
Other cooperative activities.—Many of the electric fixtures were
bought through one o f the members (a dealer in such appliances),
at a saving o f about 25 percent; stove, refrigerator, and water heater
together cost only $250. Some furniture was also purchased collec­
tively, at a saving, by special arrangement. Cooperative purchase of
eggs, poultry, etc., is also carried on. The housewives alternate in
acting as agent, taking the orders and receiving and apportioning the
A large proportion o f the residents are members o f the cooperatives
of the city, these including a gasoline service station and store and an
association giving dry-cleaning service. As most o f the members
work in town and thus have to go in every day, these associations can3
3 Letter to Bureau o f Labor Statistics from John S. Bordner, October 1,1945.



fill their wants conveniently. The fuel oil for all of the furnaces is
supplied by the petroleum cooperative.

The Cooperative Housing Association of St. Paul was formed in
September 1939. Construction began in July 1940.
The association, composed of members of credit unions of Federal,
State, and city civil-service employees, purchased from the State 72
lots which had reverted because of nonpayment of taxes. On this
property, gas, electricity, water, and sewer had already been installed
as well as streets. Only curb and sidewalks were lacking.
The land on which the project was developed lay on an elevation at
the northeastern edge of St. Paul, about 3 miles from the center of the
town. A grade school was about 3 blocks away and a high school
about a mile distant. Four blocks from the project was a bus line,
accepting token fares and offering transfer privileges.
Financing and Procedures

The association had no capital stock. As each member joined the
association he paid a $5 membership fee and agreed to buy a lot
and construct a house on it. The project was financed through the
sale o f lots to the members, by loans from the St. Paul chapter of
the Minnesota Credit Union League, and FH A insurance.
The lots, with an average frontage of 40 feet, were replotted into
48 lots with a frontage o f 60 feet. The depth varied from 112 to 126
feet. There was also a 20-foot alley. The cost to the association was
$75 per 40-foot lot (or $112 on the replotted basis); the price to the
member was $350. The difference was used for association expenses,
any surplus being returned in patronage refunds.
Minnesota has a strong credit-union movement, with large accumu­
lations o f funds. As the State act permits credit unions to make
real-estate loans, the central credit-union organization .qualified as
an F H A lending agency and proceeded to make mortgage loans on a
25-year basis to finance the individual dwellings. F H A insurance
was then applied for, and in most cases the maximum F H A insurance
o f 90 percent o f the appraised value was granted.
With one exception,4 a single architect served the whole group of
owners, receiving as his fee 3 percent on the total cost.
Likewise, one contractor had charge of construction o f all but one
o f the houses.4 With this contractor, the association had a contract
by which he guaranteed his bid on each house; if the final cost ex­
4 The exception was a member, himself an architect, who was allowed to draw his own
plans and supervise construction of his house.



ceeded this amount he was to bear the extra expense. I f there was a
saving, it had to be returned to the member, to increase his equity in
the property.5 His bid was based upon cost of construction (mate­
rials and labor) plus architect’s fee, plus a $100 “ cushion.” The con­
tractor’s compensation consisted o f a flat fee of $250 per house.
As the association’s charter authorized it to act as contractor, the
selection of materials and the letting of contracts for them were done
by its board o f directors. In this the association tried to make use
o f all possible sources of assistance and information, in order to
insure the best quality. Kesults of tests by recognized testing agencies
were used, and valuable help was received from the State university.
Prefabricated materials and standard equipment were used whereever possible. Thus, although a few of the houses were plastered, the
majority were finished with tinted Upson board—a prefabricated
material that comes in sheets 8 by 16 feet (doing away with joints that
might let in drafts), the space between the walls being filled with
2 inches o f glass wool, vapor sealed. Heavy plywood was used in
subfloors and in outside wall and roof sheathing; this construction
was cheaper and made for a more rigid house, with less air leakage.
A factory-finished oak flooring was used in all houses.
As the dwellings were constructed in groups of about 10 and the
contracts let on the basis of 25 houses, it was possible to do quantity
purchasing, such as carlot quantities of lumber and plywood, and
gross orders o f standard plumbing fixtures, window glass, and other
requirements. This resulted in substantial savings. On the lighting
fixtures and refrigerators about 40 percent was thus saved, and nearly
50 percent saving was realized on some furniture bought jointly.
Again, by building a number of houses simultaneously, efficient use
o f labor was possible, each crew of workers performing the same
task from house to house and being succeeded by the workers per­
forming the next process in construction.
Only persons belonging to some St. Paul credit union 6 were accepted
for membership. Prospective members were also required to supply
information on their employment, income, number o f dependents, and
financial obligations, in order to determine their eligibility from a
financial standpoint. Members joining the association had to purchase
a lot, at a price of $350; this sum, which included the $5 membership
■fee, represented a considerable part of the 10-percent equity the
ftiember must have to obtain F H A insurance.
The cost o f the individual house depended upon the size and style
selected, and upon the quality o f the equipment that went into it. I f
5 An FHA regulation forbade the return of such savings in cash ; the amount must be
used to reduce the mortgage.
6 As credit unions are allowed to make loans only to members.



the member desired extra-fine hardwood flooring, or a deluxe refrig­
erator, these of course brought up the cost. However, as the members
for whom the dwellings were built all had modest incomes (averaging
less than $200 per month in 1940), the houses were also of moderatepriced styles. The buildings ranged from the 2-bedroom, living room,
kitchen (with dinette), and bathroom dwelling to a 7-room house with
3 bedrooms, living room, kitchen, dining room, and bathroom. A ll the
houses were of frame construction. Many had fireplaces, a few had
recreation rooms, and nearly all had garages (built separately from
the house).
The maximum bid cost ranged from $3,750 to $5,400. Savings
(estimated at about $100 per house) were returned to the individual
members in the proportion that the contract price o f their house bore
to the total cost o f all the houses. This prorated sum was applied to
the reduction o f the member’s mortgage. The “ profit” which the
association made on the lot was to be returned to the members, after
deduction o f expenses.
For these houses the average cost to the member was about $35
per month, with a maximum of about $40. This sum included amor­
tization, interest (4 ^ percent, plus y2 percent for F H A insurance),
and taxes. These payments began 30 days after the member moved
into his dwelling. No other down payment than the value o f the lot
was required from the member, if his house cost $3,500 or less. Above
that amount he had to pay down 10 percent of the excess over $3,500.
The association’s officers emphasized that the cost to the member
was about what he would have paid at that time to a private builder
for the same style and size o f house. However, under the association’s
plan there was no profit for anyone, as officers served without pay,
and architects and contractors were on a fee basis. A ll subcontracts
and material contracts were subject to approval by the board, which
likewise controlled all payments. The entire cost of the project,
therefore, was under the control o f the association. The officials were
convinced that, because o f economies effected by carlot purchases, by
standardization (as of window and door openings), and by sys­
tematizing the use of labor, the quality obtained in both materials and
workmanship was considerably above that which would be obtained
in houses o f the same price under separate contracts. In other words,
the association made available to a moderate-income group, for
amounts they could afford to pay, dwellings o f a quality that would
otherwise be out of their reach.
Cooperative Activities

The activities o f the cooperative association in this case included
the purchase of the land, the engagement of architect and contractor,



and the letting o f bids for materials and equipment. It held title to
the individual plots until sold, then turned them over to the purchaser.
The latter then negotiated with the association’s architect and con­
tractor for the kind o f house desired, and when he moved into it the
association’s responsibility ended.
In the purchase of refrigerators, electrical equipment, and furniture,
the association patronized the two nearest cooperative wholesale asso­
ciations. In houses in which Upson board was used for interior wall
finish, the walls were tinted with a casein wash made by a cooperative
creamery association in Minneapolis.
There are in St. Paul various local cooperative enterprises—a store
association, gasoline cooperative, etc.—and a large proportion of the
original members were also members of these. Most of the houses
were equipped with oil-burning furnaces, and the fuel oil for these was
obtained from the petroleum cooperative. Cooperative life and auto­
mobile insurance was also available.
In the association each member had one vote. He owned and had
title to his individual dwelling, but if he desired to sell his house
within the first 5 years the purchaser had to be acceptable to the asso­
ciation. I f not, he had to give the association the right to purchase
it for what it cost him or at an amount set by an arbitration committee.
Apparently these provisions were not enforced and, as prices rose,
“speculation was rampant.” Houses were sold three or four times, at
continuously rising levels. The association is now dormant and plans
no further activities. A recent report from the former president
expresses the opinion that, from the cooperative point o f view, “ our
efforts were somewhat of a failure.”

The Cooperative Housing Association of Minneapolis was started in
February 1940. Construction was begun on the first house in Sep­
tember 1940.
As in St. Paul, the association bought the land for its project’ from
the State, paying for it at the rate of one-third of the tax assessment
which was delinquent. Some 59 lots in 5 different adjoining blocks in
northeast Minneapolis were acquired in this way. The lots were 40
by 125 feet, but were replotted into lots 50 and 60 feet wide. The aver­
age cost to the association was $2.50 per front foot, but the land was
sold to the member at $7.50 per foot (appraised F H A value). A ll of
the improvements—water, sewer, gas, electricity, and streets—were al­
ready in, but the association was required to pay the regular assess­
ments therefor. A considerable part of the difference between the
cost to the association and the sale price to the members went to meet



these assessments. The association sued the State for refund, con­
tending that under the law the price of tax-reversion land includes
utilities. Its position was upheld by the Minnesota Supreme Court,
resulting in the recovery of $4,500.
The land acquired was about 4 miles from the center of town, with a
grade school about in the center of the tract, so that the distance
traversed by the children was in no case more than 2y2 city blocks.
The nearest high school was 1y2 miles away. Stores were within easy
walking distance. The streetcar line was 6 blocks away, but a bus
line was extended into the development.
There were, in the original group of interested members, 45 persons.
During the interval in which financing negotiations were carried on,
3 members lost patience and withdrew, a fourth lost his net worth by
fire, and 10 others, were rejected because their incomes were too low
to undertake the .financial obligations involved. Houses were built
for the 31 members remaining and for 56 additional.members who
joined later—a total o f 87 dwellings.
Finances and Procedure

As already indicated, the associate paid for the land an average of
$2.50 per front foot and sold it to the members for about $7.50. For
corner lots an additional $25 was required.
The architect was hired by the association for a fee amounting to 2
percent of the cost of the houses.
A master contract for the whole group o f houses was made with a
large contracting firm, by which the latter received a fee amounting
to 31/2 percent of the total cost of the dwellings (minus the archi­
tect’s fe e ), and for which the contractor agreed to manage the con­
struction of all the houses. The company guaranteed to keep the cost
of the houses within the amount of the maximum bid, or failing this,
to meet the excess cost itself. As an incentive for saving on the cost
o f construction, the contract provided that 25 percent of the first
hundred dollars o f any such saving should go to the contractor and
the remainder to the owners. The contractor, however, had the priv­
ilege o f totaling costs for all houses, so that a surplus on one could be
used to take care of a deficit on another. The association controlled
the purchasing done by the contractor; no purchase could be made
or subcontract let without approval by the association’s board of
The contract also provided that the work on the houses should be
done by union workmen receiving the prevailing union scale of wages,
and the contractor agreed to give the carpenters a bonus of 50 percent



of their regular hourly rate for every hour of labor saved from the
contractor’s estimate.
The bid prices on the houses ranged from $4,100 to $6,000. The
average or typical house cost about $4,700, or from 28 to 30 cents per
cubic foot. A ll of the houses were of frame construction, and were
equipped with all modern improvements, including furnaces using
natural gas.
As in St. Paul, considerable reductions in price were obtained by
quantity purchases. The officers estimated that at least $200 per house
was saved on the cost of materials and equipment. Other savings
resulted through the use of the Torrens title (i. e., the taking of title
to many lots at once), in attorneys’ fees, and in title charges. Whereas
the title charge for one lot was $25, when the title covered 3 or more
lots the charge averaged only about $7 per lot. Because the associa­
tion held title to the whole tract, title insurance was unnecessary and
the cost of insurance was therefore saved. Lower tax rates were also
possible because of the larger valuation covered by the single tax title.
Cost to Individual Member

Each member was required to furnish information regarding his
financial status and to pay a membership fee of $5. He selected his
lot in the order in which he came into the association. According to
the size o f the lot chosen, this cost ranged from $300 to $450. The
average was about $375.
Although this constituted most of the 10-percent equity the member
had to have in order to qualify for F H A insurance, he might also
have to furnish an additional amount varying with the value of his
house. Thus, a 90-percent guaranty on a $5,000 house would cover a
maximum loan of $4,500. The difference between the two
sums—$500—had to be made up by the member. The cost of his
lot (average $375) covered most of it, but the remaining $125 and an
estimated $50 to $75 for “closing costs” had to be raised by the
member. The immediate investment required from the member there­
fore amounted to about $425 to $600, depending on the cost of his
house and on F H A appraisal o f its value in the light o f style and con­
struction elements which together constitute the “marketability.”
The member’s average monthly payment (amortization, interest,
loan insurance, and fire insurance) amounted to about $24.50 a month
on a $4,600 house with a 25-year mortgage. Taxes in the neighbor­
hood, on houses of these values, averaged’ another $8 per month. The
average income of the whole group of members in 1940 was about
$1,700 to $1,800.



Sponsored by Labor Organizations

The Carl Mackley Apartments,7 Philadelphia, constituted the first
housing project undertaken in 1934 by the Public Works Administra­
tion when it was established after the passage of the National In­
dustrial Recovery Act. The project was planned and sponsored by
the American Federation of Hosiery Workers (C IO ), with the pur­
pose o f providing suitable housing for its members, many of whom
were living under substandard conditions.
The union exchanged a piece o f land owned by it in the downtown
section for one of 4y2 acres (valued at $85,000) in the Frankford
district. A 35-year, 4-percent Federal loan of $1,039,000 was obtained,
and additional funds were supplied by the union, by a public-spirited
Friend, and by other individuals. A limited-dividend corporation,
the Juniata Park Housing Corporation, was formed which supervised
the construction and still holds ownership and management of the
Housing and Community Facilities

Housing facilities.—The apartments consist o f four rectangular
buildings o f terra-cotta brick and fireproof construction. The whole
project covers an entire city block, but the buildings occupy only a
third o f the space. The rest consists of lawns and recreational space.
The buildings are three stories high and, as they run north and south,
practically every room has sunlight at some time of the day. No
apartment is more than two rooms deep and each one has at least two
exposures (those of largest size have three exposures).
The 284 apartments range in size from 2y2to 5 rooms. The monthly
rentals range as follow s: A 2%-room apartment of living room, bed­
room, pullman kitchen (i. e., 2-burner electric plate, cupboard, and
sink, closed off from the living room by folding doors), and bath­
room (with shower only) rents for $29.00: a 2i^-room apartment with
kitchenette (i. e., space for table and chairs, in addition to facilities
noted above) and bathroom with tub, for $33.50; a 3-room apartment,
with full-sized kitchen, for $38.00; a 4-room apartment for $42.00 if
on the third floor, and for $43.00 if on the second; a 4-room apartment
with a bay window, $46.00; and a 5-room apartment (each with shower
as well as tu b), $48.00-$51.00, depending on its location. These rentals
include heat, water, and electricity. Electric stoves are furnished, but
tenants have to provide their own refrigerators. A ll apartments on
the second and third floors have a porch which they share with the neigh­
7 Named for a young hosiery worker who was killed during a strike in 1931; several
plaques throughout the buildings commemorate other fatalities in the same strike.



boring apartment. Waste disposal is through an incinerator in their
common hallway. Ample closet space is provided.
Community facilities.—On the roof of each building is a laundry
with windows on both sides, equipped with stationary tubs, electric
washers, ironing boards, and electric dryers (used in bad weather).
Drying space is provided on the roof outside the laundry. There is
no charge for the facilities or the electric current used here. By agree­
ment among the tenants of the building, each family is allotted
laundry-use time each week.
Other community facilities include an auditorium where social
events and other meetings are held, 59 heated garages renting for $5
per month each,8 and a large swimming pool. The pool is used by
both residents of the project and persons living in the neighborhood,
for a nominal fee, but outsiders pay at a slightly higher rate.
Selection of Residents

When vacancies occur, preference is given to union hosiery workers,
other unionized industrial workers, and other industrial workers, in
the order named. Although textile workers form the largest group
in the present population o f the houses, many other occupations are
represented, including both manual and “ white collar” workers.
Families with children are preferred. The general requirement is
that the monthly family income should not be less than 3 times nor
more than 5 times the monthly rent o f the apartment desired.
In this project the resident never becomes the owner of either his
apartment or o f equivalent stock in the association. For as long as
he remains in the project he is a renter only.
One apartment is given over to a nursery school, staffed by three
teachers and a cook, all hired by the housing corporation. Owing to
the limited space, the present capacity of the school is 45 pupils. The
facilities are available to both residents and outsiders, with preference
to the former. Here, for a fee o f $1.25 per week (5 days) the children
receive instruction in such subjects as drawing, modeling, block
building, and nature study, have supervised rest and play periods, and
(if they are all-day pupils) lunch as well. Each child is examined
every day by one of three trained nurses who live in the project and
donate their services. Naturally with the low fee charged, the school
is not self-supporting. In 1945, only about 56 percent o f its income
came from fees. The housing corporation provided quarters, heat,
light, and water, and the remainder was contributed by local hosiery
workers’ unions and interested individuals or was raised from the
8 A parking lot, formerly operated, had to be given up for the construction of a number
of dwellings by a private builder.



proceeds of benefits, dances, etc., given by the residents. It is hoped
that the nursery can be expanded when building materials become
Cooperative Activities

Although the first resident did not move in until 'early in 1935 and
the last one not until October, before the end of the year a credit union
had been formed. Beginning with only $28 in share capital, at the
end o f the first year (by March 1937) the association had increased its
capital to $5,496, had 200 members, and had outstanding loans
amounting to $5,307. Its operations have been continuously success­
ful, and for 1946 it paid a 3-percent stock dividend on the year’s opera­
tions. Membership and loans are restricted to residents of the Carl
Mackley hbuses, and the business is all transacted on Friday evenings.
All help is volunteered, with the exception that the secretary receives
a small honorarium.
Out o f a small buying club, started shortly after the credit union
commenced operations, grew the Juniata Consumers’ Cooperative
Association. A t the time that it opened its store (March 1937) it was
the only cooperative store in Philadelphia that was open full time.
The store handles both meat and groceries, and has steadily increased
its business. By October 1946 it had reached nearly $2,200 per week.
Its present problem is that of space; although it has outgrown its
quarters no additional space in the project is available. Membership
(now about 130) is open to both residents and nonresidents. The
association is affiliated with the Philadelphia Cooperative Federation
as well as Eastern Cooperative League and Wholesale.
Administration and Finances

The Juniata Park Housing Corporation which is the owner of the
property has a board of five directors, one of whom is appointed by
the Federal Government. Actual day-to-day management and opera­
tion o f the houses is carried on by a paid manager and his staff.
The project has suffered from the effects of two early financial
assumptions that proved to be mistaken: (1) Largely because o f the
required use of W P A labor, the total cost of construction proved to
be some $200,000 more than had been anticipated. Because o f this,
certain planned features had to be either eliminated or curtailed.
Thus, the auditorium was left without equipment, and the refrigera­
tors which were intended as part of the provided equipment had to
be furnished bv the residents. (2) At the time the project was
started, it was expected that legislation would provide tax exemption
for a certain period (as is the case under the New York housing law
for limited-dividend corporations). Rentals were set accordingly.



For 3 years, expecting such legislation, the corporation paid no realestate taxes. A t the end of that time, taxes were suddenly demanded
for the whole 3-year period—amounting to some $20,000 on an assessed
valuation o f $660,000. The corporation has never quite recovered
from the financial shock thus administered. It has kept up its inter­
est payments on its Government loan, and part o f its amortization.
Neither the union (which, apart from the Government, is the heaviest
stockholder in the corporation) nor any o f the other investors has
received a penny o f interest. An application for a moderate increase
in the rents (which are below the prevailing local level, even without
considering the unusual facilities provided) was recently filed with
OP A. Such an increase would enable the corporation to regain some
o f its lost ground.

The Local Housing Situation

Front Royal lies at the northern end o f scenic Skyline Drive in
Virginia, in a valley in the Blue Ridge Mountains. A large viscose
plant, manufacturing heavy-duty auto-tire cord, is the main industry
and employs about 3,500 workers.9
The already acute housing situation was aggravated when, at the
most critical stage of the war, an extension of the plant was under­
taken, doubling its facilities and calling for many additional workers.
So great was the housing shortage that workers had to live as far as
25-40 miles away and drive back and forth each day. A trailer camp,
installed for the construction workers who were building the new
plant, was later made available for the textile workers. Several
hundred dwellings were erected with Lanham Act funds, and a private
contractor was given priorities for some 300 FHA-financed houses.
Even these failed to meet the need. Also, the union felt not only
that the price ceilings (about $8,000 purchase price and about $50 per
month rental) were above the level that its members could afford to
pay, but that the houses themselves were too small for the workers’
families, unsuitably planned, and lacking in storage space.
Late in 1944 the local union (No. 371) formed a housing committee
to see what could be done. Its first step was the construction o f a
sample house. This was undertaken with the idea of ascertaining
the price at which a well-constructed house, designed to meet the
needs o f the members’ families, could be built. A tentative goal of
$5,000 for house and lot was set, but the final actual cost was $7,800.
In the belief that a considerable element in this high cost was the
9 Of these, the 3,000 who are production workers are practically all members of the
textile workers’ union.



fact o f its being a single unit, the union decided to undertake a largerscale house-construction project.
About this time 57 acres of farm land on high, rolling terrain, over­
looking Front Royal and with a beautiful outlook toward the moun­
tains on all sides, came on the market for $25,000. With funds con­
tributed by union members and friends, this land was purchased and
the plans for a whole new community, Stonewall Heights, were drawn.
The plans provided for 158 dwellings, with space reserved for recrea­
tional and community facilities. For practical and financial reasons
a group o f only 50 units was actually undertaken.
Problems Encountered

An unusual number of difficulties was encountered. The first was
the inability o f the local union to hold title to real estate, under the
Virginia law. As a result of union efforts an amendment was obtained
which removed this disability.
In the beginning the formation of a cooperative association, which
would hold title to the property and carry out the project, was con­
sidered, but was found not to be legally feasible in Virginia. A
regular stock corporation, the Old Dominion Housing Corporation,
was therefore formed, the officers of which were on the staff o f the
Textile Workers o f America or members o f the Front Royal local
union. Because of inability to obtain a suitable arrangement with a
private contractor, the Old Dominion Housing Corporation had also
to act as its own contractor.
Several months elapsed before the approval of the local planning
commission could be obtained. As its approval was conditioned on
the widening of the road leading into the property, the corporation
had to buy strips of land on either side of the road. Delays ensued
because some of the owners were away in war service or there were
judgments or mortgages against the property.
As the farm land purchased for the site lay outside the corporate
limits o f Front Royal, in order to obtain access to municipal water
and sewer facilities and to gas and electricity, the corporation had to
build connections—an operation that it is estimated added at least
$1,000 to the cost of each house. Further, the project was carried out
in a time o f unprecedented scarcities and one of erratic price rises.
During the 12 months in which the project was under way, prices
o f materials almost doubled. Bricks rose in price from $19 per
thousand to $34, and lumber which cost $57 per thousand feet in
June 1945 had risen to $78 by April 1946 and was still rising. Other
lags, resulting from an unusually severe winter, delayed outside
operations and caused difficulties in obtaining supplies and equipment.



A ll o f these situations entailed what seemed like interminable de­
lays, and it was not until June 1945 that ground was actually broken
and the construction o f the first house was begun.
Not the least o f the many difficulties was the problem of financing.
Several o f the leaders contributed all their savings, local unionists
advanced funds, the local unions in Roanoke, Parkersburg, and Front
Royal made loans out of the union treasuries, and the national union
also helped. Finally a loan was made through a local bank. Never­
theless, funds were barely sufficient to cover operations.
In addition, the project had to contend with local hostility from
certain sources, with suspicion as to the motives o f the leaders, and
with rumors that the whole project was “ going broke.” Not only did
these things make the going harder, but they necessitated the waste
o f much valuable time and effort to overcome them.
However, by August 1946 all 50 houses were practically complete
and a number were occupied, with families moving in each day.
Conditions of Sale, and Price of Dwellings

In order to regulate the sale o f the houses, a seniority system was
adopted and a registration fee o f $10 was charged. Applicants were
given their choice o f houses in the order of their registration for
The first few houses completed were built for $5,500 and $6,000, the
next 30 cost nearly $7,000 each, and the final lot about $8,000. No
profit was involved at any stage. Regarding the nonprofit aspect, a
report to the union members made the following statement:
The architect-engineer was paid on a per unit fee basis for his architectural and
engineering services. In this case, his fee was lower than ordinarily charged
for such work. The two people who actually ran the job— directed the construc­
tion and managed the business on the site—were paid a regular weekly wage,
about the same as paid on any job of the kind. The attorney, who also handled
all the business details of the job, was paid a weekly retainer and certain mini­
mum fees for legal work performed for the corporation. None of the directors
drew a dime. None o f the 30 or 40 people who loaned money to the corporation
were even given interest on his or her money. * * *
A small-town banker in Rockymount, Va., put up the construction loan and
the mortgage money. This banker proved to be thoroughly in sympathy with
the aims of the union in doing this project and helped the job along in every way
he possibly could. This gentleman would want to work with TWUA on similar
projects in the future if possible. The fact is that it is very easy to borrow aU
the money needed from big or little concerns and at banks and insurance com­
panies, for workers’ housing, if competent people are hired who will see to it
that the plans are properly made and strict business methods adhered to.
It was necessary to pay several thousand dollars of broker’s fees for financing
and charges in connection with putting this job through which would not have
had to be paid if there had been adequate capital to get the job started.

The total costs were averaged and for the whole group o f 50 houses
the purchase price was set at $6,050.



The purchaser is required to make a down payment of $650 (which
includes settlement costs of $114) and monthly payments of $33.68
over a period of about 25 years. It is pointed out that, because o f the
nonprofit feature of the project, dwellings of comparable size and con­
struction could not be found elsewhere for less than $8,500 to $9,500.
Actually, the report made to the union membership notes, the $6,050
charged does not entirely cover the true cost (about $7,800, because
of the sharply rising prices). The difference was covered from
amounts realized from the sale of surplus land not needed for the
The lots average 65 by 130 feet, and the houses themselves are 34.4
by 26 feet. Each house differs slightly in appearance from the others.
The construction is of solid masonry throughout, either brick and
cinder tile or brick and concrete blocks. Every house has a large
living room with fireplace, two bedrooms, bathroom, and kitchen.
Each is furnished with a gas or electric range (according to the choice
o f the purchaser), electric lighting, full basement, laundry tubs, and
a hot-air furnace so constructed that it can readily be converted to oil
and with ducts that can also be utilized for air conditioning. An
unfinished second story provides space for an additional two bedrooms,
and some o f the early residents soon began work on them.
A ll streets in the project are to be hard surfaced, with concrete
sidewalks. Surfacing of roads and construction of sidewalks was
in progress at the time the Bureau’s representative was there. Trees
and shrubs are to be planted.
As regards the individual purchaser, there were no self-help features
involved in this project. The house was delivered to him completed.
However, several o f the families which had taken possession at the
time the project was visited were working on the conversion o f the
attic space into bedrooms and doing the carpentry, painting, and other
work involved, and at least one man was putting in rock wool
Each purchaser receives title to his dwelling. With a view to check­
ing any tendency toward profit making on the part of the purchaser,
the sale contract originally used contained a provision giving the cor­
poration the first right to repurchase if the tenant wished to move
away. However, because the corporation actually had no funds with
which to carry out this provision, it was useless and was later dropped.
B y August 1946, one member had already sold his house, realizing a
$2,000 profit—a circumstance very disheartening to the leaders who
had given so freely of their time in order to insure the nonprofit
feature o f the project.
Nevertheless, the leaders feel that, aside from its part in alleviating
the housing situation, the project was worth while as a demonstration



o f the possibilities of group action. They emphasize, however, the
absolute necessity, in such a project, of responsible, altruistic leader­
ship, and the employment of thoroughly competent technicians.

Early in 1941 the Tulsa Building-Trades Council formed a housing
committee. As a result o f its recommendations, the various buildingtrades unions which were members of the council formed a nonprofit
corporation in which each took shares of stock. A tract o f land was
obtained, and arrangements were made whereby persons participating
in the plan could take options on plots of their choice. Originally,
participation was restricted to members of the sponsoring unions;
later any unionist was admitted.
Plans were obtained for houses of the types which would be suitable
for the families concerned and contracts were let for five dwellings.
It had been planned that the members (building-trades workers)
would work on their own houses and be allowed credit therefor on their
down payment, at current union rates. However, because o f the
great amount o f construction work entailed by the defense housing
program, the men were kept too busy to do so, and all five had to be
built in their entirety by the contractor whom the corporation hired.
In the end, not one of the houses was bought by building-trades
workers, though all the purchasers were unionists.
According to a leader in the project, the purchasers saved about 10
percent because of the nonprofit feature of the plan. He states that
the unions expect to revive the scheme again as soon as conditions be­
come favorable.

Other Sponsorship

An experiment carried out in Milwaukee under the leadership of
the mayor, some 20 years ago, is o f interest here, in that it provided a
method o f financing probably unique in this country, although it has
been fairly common in Europe.
Briefly, the plan provided for participation by cities and counties
through their investment in the preferred stock of a housing enter­
prise. Subscription for such stock was also open to other organiza­
tions and to individuals. The preferred stock was retired as the
tenant-owners paid for common stock to replace it. The plan in­
volved no public subsidy or expense to the taxpayers, for interest
was paid in the meantime.
The original plan contemplated the erection of about 3,500 houses.
Actually, only 105 were built, and as far as the Bureau’s information
goes, no further action has ever been taken. However, although the



plan did not materialize on the scale that was contemplated and the
cooperative feature o f common ownership was dropped, the enabling
legislation is still on the Wisconsin statute books,101 and could be
utilized if interest in doing so were present or could be aroused.
Background and Operation of the Project

In 1920, according to the statement o f its mayor, “Milwaukee was
the most densely populated city in the country. The acute housing
shortage was threatening to develop slum conditions, breeding places
for disease and crime.’711 Among the various measures examined, for
the relief o f this situation, was a plan for a city-sponsored housing
project. Action was taken under a law that had been passed in the pre­
ceding year at the request of the Milwaukee Housing Commission,
authorizing the formation of housing corporations on a cooperative
3 Such corporations were permitted two kinds o f capital— com­
mon stock (to be held only by the tenant-owners, in amounts equal to
the value o f the premises occupied by them) and preferred stock (to
be held by investors). One section o f the law authorized the common
councils o f cities and the county boards of supervisors to subscribe
for the preferred stock of such a housing corporation owning land
within the limits o f the city or county of their jurisdiction.
Under these provisions the Garden Homes Co., of Milwaukee, was
formed, under the auspices of the Milwaukee City Housing Commis­
sion. The stated purposes o f the company were as follow s:
The elimination of speculation in land values.
The economic and adequate planning of streets, sewage, water, lighting, tree
planting, and recreation spaces.
The elimination of waste and of private profit in home construction.
The collective ownership of homes by the workers, without the handicap of
labor immobility.
The use o f legal, technical, and artistic skill for the benefit of Wisconsin’s
citizens and home owners.18

The company’s authorized stock was $500,000 ($250,000 common
and $250,000 preferred). Shares were $100 each. Preferred stock was
to draw interest at the maximum rate (5 percent, cumulative) per­
mitted by the law. Each tenant-member of the corporation was re­
quired to subscribe for shares equal to the value o f his dwelling.
The city subscribed for $50,000 worth of the preferred stock, and
the county took an equal amount. The Association of Commerce14
10 Wisconsin Statutes, 1943, sec. 180.04.
11 How Milwaukee is Improving its Housing Conditions, by Daniel W. Hoan. I n American
City (New York), July 1930, p. 136.
12 Acts of 1919, ch. 402.
13 Report of Proceedings of Third Congress of The Cooperative League, 1922, p. 104.
14 This organization is reported to have withdrawn later, undertaking a plan of its own
(The New Day in Housing, p. 162).



and other organizations as well as individuals also invested. Alto­
gether, according to a report by the company to the U. S. Bureau of
Labor Statistics, there were 30 holders o f preferred stock. Bank
loans completed the necessary financing for the $500,000 project.
Voting o f both common and preferred shareholders was on the basis
o f shares held. This concession, it was explained, “was necessary,
temporarily, to satisfy the loan investors’ prejudices.” 18
A 30-acre tract o f land, half a mile outside the city limits (but later
incorporated within them), was bought for $29,000. It was divided
into plots 60 by 100 feet, with an average price o f $700 per lot.
The plan provided for 4-, 5-,- and 6-room houses which, it was
expected, would cost about $4,500 each (including cost o f land).
Final cost, for the 105 dwellings that were built, was about $5,000
each (the maximum allowed in the law), but even that price, it was
claimed, represented an average saving o f “ fully $1,500” per house.15
Economies were reported to have been effected through the wholesale
buying of land and materials, through the building o f many houses
at once, and through the elimination o f speculative profit. “ The
tenant obtains a home, at a rental not higher, and probably less than
elsewhere. Although the cost of the house is high, more than the
average Worker can today afford, yet the present members are obtain­
ing homes which could not possibly be bought at such a price
otherwise.” 16
The tenant-owners were required to make a down payment o f $500
(about 10 percent o f the cost). Monthly payments (covering taxes,
insurance, repairs, interest on preferred stock, and amortization on
preferred stock and bank loans) averaged $8.50 per room or about $45
for a 5-room house or $50 for one o f 6 rooms. The houses were to
be paid for in 20 years. Under group insurance taken out by the
company, if a member died or became totally disabled before com­
pleting payment, the insurance would cover the unpaid amount of his
capital stock. His family could either continue to occupy the dwell­
ing by paying the other fixed charges (taxes, insurance, etc.) or turn
in its paid-up stock to the company at its surrender value.
Applications were considerably in excess of the number of dwel­
lings. By the fall of 1922, it was reported, 90 houses were nearing
completion and it was hoped that “ many more” could be built in 1923.
This hope, however, was not realized.
Fate of the Project

One of the aims, as already noted, was the collective ownership
o f homes. This was also a provision of the law under which the
13 Report of Proceedings of Third Congress of The Cooperative League, 1922, p. 104.
15 Daniel W. Hoan, 1928, quoted in The New Day for Housing, p. 163.
16 Report of Proceedings of Third Congress of The Cooperative League, 1922, p. 105.



Garden Homes Co. was form ed; title was to be held by the corpora­
tion, with leases issued to the tenant-owners. It was explained that
it was not the purpose of cooperative associations, such as the Garden
Homes Co., to “ enable tenants to obtain homes at bottom prices by
building collectively and then to allow the individuals to own and
sell them for profit to others. Such a policy destroys the cooperative
society.” 16
Whatever the plan o f the sponsors, the collective-ownership idea
could not be carried through. The tenant-owners, or at least some o f
them, became dissatisfied with the lease arrangement; they “ felt that
by becoming owners o f the homes, with a deed, they would be able to
sell at a profit.” 17 This attitude was attributed to the fact that the
secretary o f the company “did not take pains to sell this [the coopera­
tive] idea to all who took the homes.” 17 Agitation was started to
change the law to permit outright sale, and such an amendment was
obtained in 1923, less than a year after the first tenant moved in.
This change, o f course, altered the whole character of the enter­
prise. However, the chief sponsor o f the project remained o f the
opinion that, in spite o f the fact that the cooperative character o f the
project was thus jettisoned, the venture “was a remarkable success,
from every point o f view.” 17

An assault on the high cost of home owning, through a system o f
building guilds, was carried on in several places in New York and
New Jersey in the middle and late 1930’s, using a plan worked out
by Ralph Borsodi, economist, writer, and teacher. The experiment
began in a small way about 1935. Its declared objects were (1) to
furnish honest construction and at the same time lower the cost of
building, (2) to eliminate contracting and workers’ slow-down
methods, (3) to stabilize work and provide year-round employment,
(4) to “ end commercial exploitation o f the home builder,” and (5) to
provide greater security to capital while at the same time providing
labor with a higher yearly income.
Each homestead project involved four parties—the Independence
Foundation, a homestead association, the individual homesteader, and
a “ building guild.” The Independence Foundation was a nonprofit
agency formed to sponsor, finance, and provide technical supervision
and cost accounting for the various building projects. Its funds were
raised through the public sale of its investment certificates (bearing
6 percent interest) and loans from banks, building and loan associa­
tions, and other agencies. It purchased land at acreage rates and
16 Report of Proceedings of Third Congress of The Cooperative League, 1922, p. 105.
17 The New Day in Housing, p. 163.



subdivided it into plots large enough to provide space for subsistence
In connection with each project, a homestead association was formed
by the Foundation to purchase the land, over a period o f years, from the
Foundation and hold it as a collective agency of the individual home­
steaders, granting use of the land to them under a 99-year lease.
The houses in the homestead project, on the other hand, were held in
fee simple by the occupying homesteaders, and were constructed by
an association o f building-trades workers (guild) formed for the pur­
pose. Each homestead association had a board o f five members, all
residents o f the community and elected annually for 5-year terms.
However, the treasurer o f the Independence Foundation was to serve
also as treasurer o f the homestead association until the latter’s obliga­
tions to the Foundation had been fulfilled. In the affairs of the
association each homeowner had a single vote.
Procedures Involved

An individual desiring to participate in a homestead project would
apply to the homestead association for membership, accompanying
his application by a $25 membership fee. This was, actually, often
the only cash furnished by the prospective homeowner until after he
became a resident o f the project. I f accepted for membership he
signed an “ indenture” covering the terms under which occupancy
o f the land was granted to him. Under this agreement he bound
himself to pay a “ land assessment” in an amount (calculated by the
homestead association each year) sufficient to cover his share o f taxes,
interest on capital investment, maintenance o f roads, utilities, etc.,
and 0.5 percent amortization on the land cost. The agreement like­
wise provided that for 20 years the property was to be used exclu­
sively for “ homesteading purposes.” The latter was defined to mean
“ property used primarily for the residence of the family group and
for farming and creative work in the home, studio, workshop,
or on the land by the individuals composing such family group.”
Any use o f the property for “mercantile, commercial manufacturing,
or industrial purposes” required the special consent o f the homestead
A ll o f the member’s transactions with regard to the land were thus
carried on through the medium of the homestead association.
A separate arrangement covered the construction of and payment
for his house. Having been admitted as a prospective homesteader,
he could then apply for a loan from the Independence Foundation in
an amount sufficient to cover cost o f construction o f the dwelling and
necessary improvements on the plot o f land he chose. This “ loan”
was really a credit, for the Foundation took care o f the actual ex­



penditure o f it, making advances of funds to the guild and paying
vouchers for work actually completed. In return, the homesteader
obligated himself to make regular monthly payments on the principal,
with interest at 6 percent calculated on the monthly unpaid balances.
These payments were made directly to the Foundation and varied,
o f course, according to the size and style of his dwelling. However,
the total costs could be, and were, reduced by savings made under the
guild system and by the owner’s contributing his own labor on various
parts o f the job.
In the case o f a member’s withdrawal from the association, his
“ relative property rights and interests” in the common property of
the association were to be determined according to the “ ratio of the
equity in the association’s capital investment created by the member
to that o f the aggregate created by all the members.” 18 In case of
dispute on this or other matters in his relation to the homestead asso­
ciation, the member had the right of appeal to a board o f three
How the Guild System Operated

As it happened, conditions were ripe for the experiment. A t the
time the first group o f building workers was brought together, in
1936, the general employment situation was bad and the building
trades were in the mood to try anything that offered the prospect
o f work. Under the plan presented to them, although the current
union scale could not be paid, 12 months’ steady employment was
guaranteed; this, in an industry known for its seasonal unemploy­
ment, was likely to result in greater annual earnings than under the
usual hourly rate. The men found the idea acceptable and the first
group was organized into a “ guild” and put to work.
Each guild consisted o f a “ guildmaster” and a crew including
several carpenters, painters, and odd-j ob men. A plumber and an elec­
trician worked for several guilds jointly. Although the over-all
planning was done by the Foundation’s staff, the actual operations on
a particular contract were the responsibility of the guildmaster. Each
crew member had a single vote in the conduct of the affairs o f the
guild. In a legal sense, the guilds were partnerships of the members.
The construction of each dwelling was governed by a contract be­
tween the individual homesteader (“ proprietor” ) and the guild, ap­
proved by the Foundation. It called for construction to be carried out
on the basis o f estimates by the guild, but actually all such estimates
were made by the technical staff of the Foundation. A supplementary
agreement between the guild and the Foundation stipulated that
these estimates were to. be at substantially the same level as “ prevail­
18 Bylaws of the Bayard Lane [homestead] Association, Suffern, N. Y.



ing charges by responsible contractors for work of equal quality.”
They covered interest, depreciation, repairs, and other costs incidental
to the use o f machinery and equipment of the guild, plus 10 percent o f
basic costs to cover sales, accounting, and general office expenses, 2y2
percent for contingency reserves, and 2y2 percent to cover any service
and repairs necessary during the first year after construction was
finished. It was also stipulated that the purchaser should have the
right to inspect the books and make such audits as were necessary to
verify the accuracy of his account, for 1 year after the final account
was tendered him. Any savings between the total estimated cost and
the actual cost would be divided equally between the bonus fund of
the guild and the homeowner; if a loss was entailed, it was to be
born in equal parts by guild and owner.
Every contract between the guild and the Foundation included the
provision that 10 percent of the total basic costs o f each construction
contract should be paid to the Foundation as long as it acted as financing
agent. Whenever its actual costs fell below this figure the difference
would be rebated to the guild.
A “ drawing account” from which individual guild members were
compensated was created by charging against each home owner’s loan
credit the time spent by each class of worker in the construction of
the house, on the basis o f a “ unit” rate per hour. Thus, the unit rate
for the Eockland Building Guild for the year 1939 was 5 cents. The
various classes o f workers were assigned weights or “ratios” which,
multiplied by the unit, yielded their actual hourly remuneration, as
shown in table 2.


T able 2.— Rates of pay estimated for members of Rockland Building Guild 1939
Class of worker

Master journeyman------------ ------- ---------------------Journeyman, first class..... ....... -...............................
Journeyman, second class______________ ______
Senior apprentice.......— ....... ...................................
Junior apprentice.............. ........................................
Laborer------- ------ -------------------- -------- --------------


Active and associate

rate (ra­
tio x 5)




rate (ra­
tio x 5)




Work was on the basis of a 44-hour week. Active and associate
members received pay for 6 holidays (New Year’s Day, Memorial Day,
July 4, Labor Day, Thanksgiving, and Christmas) for 8 hours unless
the holiday fell on Saturday, in which case 4 hours were paid for.
The “drawing account” was established in order to provide living
expenses for the crew members while the job was in process. The rate
o f basic unit and hourly pay established, it was pointed out, were



really immaterial in the long run, for the men’s total earnings on a
job were directly related to the actual savings made on the total
estimated costs for that job. These, as already noted, were divided
between the men’s bonus fund and the home owner. From the bonus
fund thus established the guildsmen received additional payments once
a year. This arrangement gave a direct incentive to the men to reduce
the actual construction costs as much as possible.
The records of the Kamapo Building Guild show that, for the second
half o f the year 1937, the 19 guildsmen received a bonus of $6.97, for
the first half of 1938 a bonus o f $37.81, and for the second half of 1938
one o f $38.22. This progressive increase in the size o f the bonus may
well have been a reflection of the increasing realization by the men
where their interests lay and of their consequent rise in efficiency and
There were other possible increments to their income, also. Thus, if
the actual outlays from the 2y2 percent set aside for servicing and
repairs fell below that amount, half of the sum remaining was to be
divided among the crew at the end of 1 year after the job was finished;
likewise, half o f any savings on the %y2 percent for contingent expenses
was to be so divided, at the end o f the second year after the job was
Although in the beginning the guilds were financed entirely by the
Foundation in order to get them going, own capital was gradually built
up by means of a deduction of not less than 5 percent from each man’s
advances from the “ drawing account,” deposited to his credit on the
guild books. This capital was used for the purchase of new equip­
ment, repairs, etc. In the* event of a guild member’s permanent with­
drawal, the sum of his credit was to be refunded to him. The private
property o f the members was not subject to seizure for debts o f the
Results of the Experiment

The Independence Foundation was in existence for 3 years. During
that time it lent, for land and dwellings, some $200,000. Under its
auspices eight guilds were established20 and some 50 houses were
built. The first project o f 16 houses in Suffern, N. Y., was followed
by others in West Nyack and Ossining, N. Y., Ringwood, N. J., and
Feasterville, Pa. It ceased operations at the beginning o f the war,
when wartime restrictions on construction stopped all private building
and when considerably higher earnings could be had by guild mem­
bers, in war industries. On its demise all o f the projects, except the
19 The other half was rebated to the home owner concerned.
20 These were the Ramapo Building Guild, Rockland Building Guild, Clarkstown Building
Guild, Sloatsburg Building Guild, Twin Ridge Building Guild, Becraft Building Guild,
Sterling Building Guild, and New Castle Building Guild.



Bryn G welyd21 Homesteads (Pennsylvania), reverted to the fee-sim­
ple plan o f ownership of the land (as noted, the ownership of the
houses had always been on that basis).
In the opinion of the sponsors o f the plan, the experiment demon­
strated that, with a continuous development o f new units under the
supervision o f a central agency, it was possible to insure practically
continuous employment to guild members, with larger annual earn­
ings than were usual under the intermittent operation customary in
the building trades. However, under guild operation, the normal
craft lines were blurred and for this reason, if no other, the leaders
in the Foundation realized that it would probably be impossible to
obtain the cooperation o f the building-trades craft unions in normal
The experiment also indicated the possibilities o f greater efficiency
in construction and of consequent savings to both workers and homeowners. The originator o f the guild plan is of the opinion that the
essential requirement in a plan of this kind is that the estimating,
planning, accounting, and technical work (legal matters, land acquisi­
tion, architectural service) be done by a competent staff o f some out­
side, impartial body (in this case, the Independence Foundation) in
which both workers and home owners have confidence. He emphasizes
that considerable savings could also be made through cooperative buy­
ing of building materials, fittings, equipment, etc.—not yet available
generally in the distributive cooperative movement.22
Because o f the nonprofit feature of the plan (no “ profits” were made
at any stage) and because of the incentives inherent in the guild sys­
tem, substantial savings were made even without such cooperative pur­
chasing. Thus, a report of the Foundation in the August 19, 1939,
issue o f the Independence Foundation News, stated that on 38 con­
tracts for individual houses, then completed, the aggregate estimated
cost was $111,965 and the actual cost $104,134. Savings amounted to
$7,319, which were divided between guild members and home owners.
21 Bryn Gwelyd is Welsh for “ Hill of Vision.”
22 See pp. 85 and 86 for supplies and services available through cooperative wholesales.

A p p e n d i x A .— Movable Forms Used in Laying Stone Walls at

The following sketches, with explanatory material, show how simple forms
were devised to aid unskilled workmen to lay stone walls for their houses at
the Penn-Craft project.
1. Form post: Made of 2—2 x 4—10 spiked or bolted
together with W iron pin fastened in bottom end,
extending through bottom cross board #6 .
2. Top cross board—Any one inch scrap piece nailed
on the two posts to hold them at same width apart
as at bottom.
3. 2 x 2 Release stick—Approx. 36" long. Is the key
board for unlocking forms when ready to move the
board upward for the next set.
4. 2 at 10 form plank: These boards form the inside
and outside walls o f the form against which the
stone is laid. These planks can be used later for
floor joist or whatever they may be needed for. A
few of them will have to be cut to fit short jogs in
the walls.
5. 2 x 2 Release blocks: These blocks are cut the exact
width of the wall that one desires to build. Their
job is to hold the form plank snugly against the
2 x 2 release sticks until stone is laid in the form,
at which time the release blocks are removed or
moved to a new place which needs temporary
Cross section of forms and

6. Bottom cross board: This board is used in starting basement walls on the
clay floor of the foundation. No footer is needed where a solid 16" stone wall
is to be built. The cross-board is drilled to receive the
pins in the ends of
the form posts as shown in the sketch below. This board is left in the wall.
It need not be anything more than a scrap piece of 1 " board sufficiently long
to serve the purpose. The length will depend upon the width of the wall to
be built.
1. Form post.
2. Release stick.
3. Form plank.
4. Wire ( # 9 ) to bind
outer post to inner
5. Subfloor.
6. Floor joist.
7. Iron pin in end o f
post-hole drilled in
subfloor to hold it
8. Brace to subfloor to
keep wall plumb.
Sketch of first or second floor assembly


A p p e n d i x B.— Housing Supplies and Services Available Through Cooperative Wholesale Associations
The following table lists the cooperative wholesales that provide either building materials or service in the field of housing and shows
for each the territory in which they operate and the commodities or services available through them.
Housing supplies and services provided by consumers* cooperative wholesales

Trading territory

Oommodities handled

Other housing services

National association

National Cooperatives, 343 S. Dearborn St.,
Chicago 4, 111.

United States, Canada.

Galvanized and asphalt roofing, cedar shingles,

Regional associations

Associated Cooperatives of California, 815 Lydia
California, Nevada.
Lumber and other building supplies.
St., Oakland 7, Calif.
Central States Cooperatives, 1336 Fullerton Ave., Illinois, Indiana, Ohio, southern Lumber, sash, roofing, building hardware and
Chicago 14, 111.
other building supplies.
Indiana Farm Bureau Cooperative Association, Indiana............................................. Lumber, paint, shingles, steel, building tile and
47 South Pennsylvania St., Indianapolis 9, Ind.
blocks, hardware, and other building supplies.
Farm Bureau Services, 221 North Cedar St., Michigan.......................................... Nails and laminated rafters.
Lansing, Mich.
Midland Cooperative Wholesale, 739 Johnson St. Southern Minnesota, southern Wis­ Paint, wood and asphalt shingles, steel and alu­
N. E., Minneapolis 13, Minn.
minum sheets, paper roofing, nails, pipe, and
some building hardware.
Farmers Union Central Exchange, P. O. Box Q, Minnesota, Montana, North and Paint, lumber, asphalt roofing and siding, nails
St. Paul, Minn.
South Dakota, northern Wyoming.
and other hardware.
Farmers Lumber & Supply Co.,21961 University Iowa, Minnesota, Montana, Nebras­ Lumber (75 yards in States named).
Ave., St. Paul 4, Minn.
ka, North Dakota, South Dakota.
Consumers Cooperative Association, 318 East 10th Missouri, Nebraska, Kansas, south­ Lumber,2composition roofing, Portland cement,
St., Kansas City 13, Mo.
ern North Dakota, South Dakota,
brick, and tile, steel, red-cedar shingles, paint,4
southern Wyoming, Colorado, Iowa,
millwork, sash and doors, building hardware.
Farmers Union State Exchange, 39th and Leaven­ Nebraska........................................... Asphalt and steel roofing.
worth Sts., Omaha 5, Nebr.
Eastern Cooperative Wholesale, 44 West 143d St., New England, Delaware, New Jersey, Lumber, roofing, building hardware, tile, some
New York 30, N. Y.
New York, Pennsylvania, Mary­
interior fixtures.
land, District of Columbia, north­
ern Virginia.
Orange Cooperative Wholesale, 3104 Western Washington........... ........................... Roofing and nails.
Ave., Seattle 1, Wash.
Central Cooperative Wholesale, Superior, Wis__ Northern Minnesota, northern Wis­ Complete line of building materials and paint.
District associations
Cn Northland Cooperative Federation, Rock, Mich.. Upper Peninsula of Michigan..........................................................................................
Range Cooperative Federation, Virginia, M inn... Minnesota, Mesabi Range district. . . Lumber.
Cooperative Services, Maple, Wis........................ Northern Wisconsin........................... Lumber and complete line of building supplies.
1Plans addition of many more items. 2 Subsidiary of Farmers Union Grain Terminal Association. « Own sawmill. 4 Own plant.

Advice on organization, legal matters,
and land acquisition.
Homestead-improvement program.
Assistance in organization.

Legal department; architectural serv­
ice (building plans and specifications,
advice on building materials, etc.).
Full-time adviser on organization, land
acquisition, architectural planning,
House plans, advice on building
House insulation.

A p p e n d i x C.— Selected List o f References on Housing
B urroughs, R oy J.

Farmers’ cooperative construction service. (In Land Policy Review, XL S.
Department o f Agriculture, Bureau of Agricultural Economics (Wash­
ington) , winter 1945, pp. 16-21.) Price 10 cents.*
Presents a plan for a Nation-wide farmers’ cooperative construction service, including
the construction of homes as well as farm buildings and the servicing of equipment. Pro­
poses that the regional farmers’ cooperative wholesales take the initiative in forming a
national association.

B auer, Catherine .

Housing in the United States: Problems and policy. 28 pp. (Reprinted
from International Labor Review, July 1945.) Montreal, International
Labor Office, 1945. Price 10 cents.
A critical analysis of the housing situation, of public housing, of FHA insurance, and
of possibilities under present housing legislation.

------ Modern housing.
pp., illus.

Boston and New York, Houghton Mifflin Co., 1984.


In addition to historical material, beginning with the 19th century, contains detailed
data on elements of modern housing— standards, location, lay-out and building arrange­
ment, building types and dwelling plans, construction, architecture, etc.

C hase , Stuart .

The case against home ownership.

(In Survey Graphic, May 1988, pp. 261-

G r a y , George H erbert.

Housing and citizenship: A study of low-cost housing. New York, Reinhold
Publishing Corporation, 1946. 254 pp{, bibliography, charts, plans, illus.
An exhaustive report dealing with the historic and philosophic as well as the social,
economic, and technological background of housing in both the United States and Europe.
Shows how public housing policy has developed, illustrated with accounts of many projects
and showing their advantages and shortcomings. There are chapters dealing with determin­
ing factors in cost of housing and rent, and with designs for low-cost dwellings. Accom­
plishments of various Federal housing agencies in the United States are reviewed and
appraised. The author also presents a comprehensive program for postwar housing in
this country, including therein an outline of policies that should be changed and a proposal
for a national council of housing.

H albert, B lanche , editor.

The better homes manual.

Chicago, University of Chicago Press, 1931.

Detailed discussion of the various “ requirements for good housing” — cost, site, archi­
tecture, materials, lighting, e;c.

K ir k h a m , J ohn E dward.
H ow to build your own home o f earth.

Oklahoma Engineering Experiment
Station Publication No. 61. Stillwater, Oklahoma Agricultural and Me­
chanical College, 1946. 37 pp., diagrams, illus.

With the object of stimulating “ personal initiative in people for building their own
homes,” at a cost that they can afford, the author (on the basis of his own experience with
a house now 8 years old) describes the various processes, and gives diagrams for equipment
for hand labor in building a house of earth.



U. S. D epartment


L abor. Bureau of Labor Statistics.

Organization and management of cooperative and mutual housing associa­
tions. (Its Bulletin No. 858.) Washington, 1946. 65 pp. Price 20 cents.*
Discusses general principles of cooperative housing, site and type of project, community
and architectural planning, financing, membership relations, administration and manage­
ment, tax status, etc. Appendixes give model bylaws, sample share subscription agree­
ment, model lease, and citations of cooperative and housing laws.

U. S. N ational H ousing A gency. Office of the Administrator.

Mutual housing:
15 cents.*

A Veterans’ guide.

Washington, 1947.

55 pp.


Covers origination and organization, financing, construction, operation and manage­
ment, etc.
--------Federal Public Housing Authority.

Manual of policy and procedure. , Section 8555:2— Sales to mutual owner­
ship corporations of Federally owned permanent war housing projects
developed under the Lanham Act, Public Laws 781 and 9. Approved
January 18,1946. <Mimeographed.)
-------- Federal Housing Administration.

A handbook on urban redevelopment for cities in the United States. Wash­
ington, 1941. 105 pp. (FHA Form No. 2389.) Price 15 cents.*
--------------Principles o f planning small houses. (Its Technical Bulletin No. 4.,
revised June 1, 1946.) Washington, 1945. 44 pp., diagrams, illus.
------------- Housing Costs: Where the housing dollar goes.
Washington 1944. 48 pp. Price 10 cents.*

(Its Bulletin No. 2.)

W ood, E dith E lmer.

Recent trends in American housing.
317 pp.

New York, The Macmillan Co., 1931.

An analysis of the housing situation in the early 1930’s (much of which is applicable
today). Chapter X deals with cooperative housing.

W right , H enry .

Rehousing urban America. New York, Columbia University Press, 1935.
173 pp., charts, diagrams, illus.
A critical analysis of a number of group projects (single, row, and apartment dwellings)
here and abroad. Contains chapters on new methods of construction, quality of living
space, and analytical and cost studies. Addenda relate to desirable standards for various
parts of the dwelling.
♦Obtainable from the Superintendent of Documents, Government Printing Office, at price
named. Money order or check should accompany ord er; do not send stamps.


Accounting service for housing projects.. 11,22,78,83
A. C. W. Corporation.....................................
A. H. Consumers Society...................... .........13-19
Amalgamated Banks......................................
Amalgamated Center........ .............................
Amalgamated Clothing Workers and housing. 13,14
Amalgamated Clothing Workers Credit Union.
Amalgamated Dwellings Cooperative Service.
Amalgamated Dwellings, Inc............... 13-15,17,20
Amalgamated Housing Corporation................. 13-17
American Federation of Hosiery Workers
American Friends Service Committee______
Methods and other considerations regard­
ing. ................................ 6,21,36,37,43,53,54
Rate of........ ............ 20,33,36,43,49,62,67,74,77
Apartment units, size of. (See Dwellings,
size of.)
Architect’s fees..... ..............
Architectural service..................................... 11,85
Associated Cooperatives of California........... 8,9,85
Bannockburn Cooperators.............................. 23,24
Bowery Savings Bank as source of funds...... . 16,25
Building and loan associations as source of
funds________________________________ 11,78
Building materials, sources of. 8,9,24,42,45,52,65,85
Building materials, types of, used__________
Central Cooperative Wholesale (Wisconsin).. 9,85
Central States Cooperatives (Illinois)............
Collective ownership:
Advantages and disadvantages...............4,5,33
Housing projects using----- 17,23,25,29,77,79,83
Community and cooperative activities of
residents............. ....... ........................ . vii, 18,19,
Community buildings and other community
features_____ _________ — - 21,28,31,37-39,69,70
Community lay-out and planning. 23,40,45,48,56,72
Construction loans, sources of___ 10,16,43,49,52,79
Consumers’ Cooperative Association (Mis­
souri)......... .......................
Consumers’ Cooperative Services (New York).
Consumers’ Finance Corporation (New York).
Contractors and housing__________ 11,62-64,66,81
Contractor, housing association acting as.. 63,64,72
Cooperative accomplishments of associations..
Cooperative features of housing projects--------- 4,29,
Cooperative Services (Wisconsin) ..................
Cooperation, extent of, optional.....................
Costs, construction and other. .15,16,22,23,25,30,33,
Credit unions as source of housing funds___10,62

Down payment, member’s. (See Member’s
down payment, under Financing.)
Down payment, methods of assisting in. 17,19,21,22
Dwellings, types of................ ........................
15, 21, 23-25, 28, 37, 39, 41, 42, 59, 60, 68, 74
Dwellings (see also Families provided for).
Dwelling units, size of................... ................
Eastern Cooperative Wholesale (New York). 8,70,85
Ejection of undesirable members............ . 17,29,44
Engineering service..................................... 11,42
Equipment and other features of housing__
Equity credits, member’s (see also Member’s
down payment, under Financing)____32,33,53,63
Failure of housing projects, causes of.......... 28,30,31
Families provided for, number of.. 13,23-25,28,
Farm Bureau Services (Michigan).................
Farmers Lumber & Supply Co. (Minnesota). 85
Farmers Union Central Exchange (Minne­
Farmers Union State Exchange (Nebraska). . .
Federations as sources of housing assistance
and supply........................................... 8,12
Fee-simple ownership, use and effects of. 4,5,43,46,
FHA insurance........ 6,11,52,53,56,59,60,62,64,67
Financing the housing project........ . 2,3,9-11,15,25
Building and loans associations as source
of funds..................................................11,78
City, assistance by............................ 3,20,75-77
Credit unions as source of funds............. . 10,62
Debenture bonds, issuance of................ 20,21,60
Federal funds, use of...................... 2,3,34,49,68
Insurance companies as source of funds.. 10,11,
Labor organizations, assistance by............
Member’s down payment.. 6,10,15-17,20,21,24,
Mortgages........... .............. 15,16,20,25-27,30,62
Revolving funds___________ 10,43,49,50,60,61
Savings banks as source of funds... 11,16,20,25
Stock, common and preferred.................
Other methods of financing..................... 9-11,
Friends Service, Inc.............................. 40,42,44,45
Garden Homes Co._........................................76,78
Grange Cooperative Wholesale (Washington).
Housing producers’ cooperative as source of
technical assistance...................................... 11,12

Income, average family, of members...............52,54,
Depression, effect of, on housing projects____ 4,18, Independence Foundation__________
26,28,31 Tndmna Farm Bureau Cooperative Association. 9,85




Insurance companies as source of funds______ 10,
Insurance, special types of, usedfor protection of
members and association____________ 6,7,50,77
Interest rates, amount and considerations re­
lating to___ _____________ 20,27,28,30,36,64,76
International Cooperative Lumbering Asso­
Investment, return on, from housing enterprises

New York Title & Mortgage Co. as source of
funds.___ ____________________________
Nonprofit features of housing projects.......... 3-5,
32, 64, 73-75, 77-79, 83
North Central States Housing Association__
Northland Cooperative Federation (Mich­
igan).......... .................
Occupations represented in membership of
housing projects.... 17, 28, 40, 51, 54, 56, 62, 69, 71
Old Dominion Housing Corporation..............
Operation, cost of............................

Jewish Daily Forward, assistance of, to hous­
ing-project members in raising down pay­
17 Patronage refunds, provisions regarding____
26, 29, 58, 62, 64, 83
Juniata Park Housing Corporation____ ____ 68,70
Plans, house, used...........................................42,59
Privacy, provisions to insure______________ 14,21
Labor and labor organizations, policy of hous­
ing projects toward_____ 17,24,29,30,66,67,81,83 Profit-sharing arrangements with contractor.. 62,
Labor organizations. (See Trade unions.)
63, 66, 81
Land area, percent covered by buildings____
15,21,29,68 Quality, provisions to insure.................. . 63,64,66
Land, considerations regarding____________
16,19,62, 65,72, 78,79,85
Land and/or building lots, cost of_________ 15,23,
25,30,38,52, 53,58-60, 62, 63, 65, 67,68,72,77
Laws, types of, used by housing projects-----15,
19, 20, 24, 53,54,76,78
Lease, permanent, use of, in housing projects. 5,17,
23, 25, 29,33,36,79
Lease, temporary, use of, in housing projects.. 42,78
Legal assistance, sources o f.____ _______ 18,22,85
Limited-dividend law, use of, in housing proj­
ects.-........ ........ ................................ .... 15,30,68
Limitations on membership. (See Member­
ship considerations and requirements.)
Loans to members. (See Construction loans,
and Down payment.)
Location and physical features of projects___
20, 23, 25,28,37,38,40,45,52,53,56, 57,62,66. 72
Member, cost to...........................................
10, 15-17, 20,21, 24, 25, 29, 30, 32, 33, 36, 43,
46, 50, 52-54, 58, '59, 62-65, 67, 73, 74, 77, 79.
Membership considerations and requirements.
16, 17, 22-24, 26, 28, 29, 32, 37, 41, 43, 51, 58,
60, 63, 69, 75, 79.
Member’s financial interest. (See under Fi­
Member’s, monthly payments. (See Rental
Metropolitan Life Insurance Co. as source of
funds__________________- .................. 10,15,16
Midland Cooperative Wholesale (Minnesota) _ 8,85
Milwaukee City Housing Commission--------76
Mortgage prepayments, as cushion, provision
for____ _______________
Mutual home ownership......................... 2,3,32-39
Mutual home ownership, advantages of------- 33,35
Mutual Life Insurance Co. as source of funds. 10,20

Range Cooperative Federation (Minnesota) __
Recreational activities. (See Community and
other activities.)
Redemption of withdrawing member’s equity,
procedure as to_________ 4, 18, 19, 29, 32, 59, 80
Rental charges. 15, 17, 21, 25, 29, 33, 36, 37, 39, 46,
49, 52-54, 59, 64, 67, 68, 74, 77
Reserves, provision for (see also Equity credits). 18,81
Rochdale Housing Corporation...................... 25-27
Sale of dwelling, limitations on member’s____
Savings banks as source of funds______ 11,16,20,25
Savings made through joint housing activities:
Architect’s fee................................. : ____52,73
Collective purchasing____ 52,61,63,64,67,77,83
Contract, profit-sharing arrangements on.
Interest rates, reduction in. ................... . 16,20
Labor, efficient use of...................... 63,64,77,83
Land cost, lower............. ....... .......... . 16,59,77
Members’ labor.............................. 45,46,50,59
Patronage refunds..... ............ 18,19,21,26,58,64
Rental payments, lower................ . 25,26,31,33
Tax exemption.......... .........
Tax-reversion land, purchase of........... 62,65,66
Title, Torrens, use o f ..............................
Selection of dwelling unit, provision for_____
Self-help aspects.....................— 3,4,16,40-55,59,80
Accounting methods and kinds of reports. 44,
Processes performed by members______ 4,42,
45, 52, 55, 59, 74, 75
Service Employees Corporation____________
Shopping facilities, vi, 19,23,29,37-39,48,57,65,66,70
Sponsorship of projects------------------- 1,2,13,20,22,
Streets, considerations regarding types of and
placement of____ _______ _________ 21,37,39,57

National Cooperative Finance Association.__
National Cooperative-Mutual Housing As­
National Cooperatives----- ----------------------- 8-10,85 Taxes and cooperative housing---------- 15, 20, 70, 71
Neighborhood deterioration, prevention of— 4,33 Tax-reversion land, purchase of........... 62,65,66


Title to individual dwelling, giving of. (See
Fee-simple ownership.)
Technical service--------------- 8, 11, 12, 22, 78, 83,85
Trade-unions as source of funds.. 9,10,15,68,73,75
Trade-unions in relation to housing projects. 2,9,
Transfer of families, within projects, con­
siderations facilitating----------------------------23,33
Transportation, means of........... . vi, 14, 57, 62, 66
Trustees, use of, in housing projects. _ 23,35,49

Urban redevelopment:
Cooperative activity under............... 19-22
Utilities, community, procedures in supplying 57,
Veterans, provisions for_____________ 16,46,56,60
Voting___________ 23, 24, 33, 35, 61, 65, 77, 79, 80
Withdrawals, provisions relative to (see also
Redemption, and Fee-simple ownership).. .
Workers Colony Corporation___________ 30,31

Unemployment (or other crises) of members,
provision to meet_____ _________ 33, 40, 42, 43 Zoning regulations, effect of______________23,24