In a publication of the American Statistical Association of 1908-1909, John R. Commons, Professor of Political Economy, provides guidance for the “Standardization of Housing Investigation”. While modern real estate values a property on square footage, John R. Commons takes into consideration the industrial vigor that results from housing, food and occupation. In “War Emergency Construction (Housing War Workers), Report of the United States Housing Corporation”, volumes I, the Department of Labor, Bureau of Industrial Housing and Transportation compares the industrial vigor of skilled workers with the industrial vigor of unskilled workers and provides strategic guidance.
With a demonstration program of 115 units housing, the SAB Center will combine both methods to verify and value new standards of living in order to define the parameters of industrial vigor, taking into consideration the new medias and technologies. By definition, a home nowadays is not only a home. It is an office (remote work), a craft business (selling on Etsy, Amazon, eBay…), a post production studio (streaming on Youtube, Vimeo…) a media center (smart homes), prior to being a living room with a dining room for the family.
With 7 different types of housing, we will define the ideals on each type to design the “dwelling cards” and the “occupants cards” on John R. Commons model. Having defined a model, and the cost of this model accordingly to housing, food and occupation, we will compare with the costs of housing in Los Angeles and specifically with the costs of affordable housing.
Cost database construction softwares are following a speculative method that reflects the inflation on growth housing where prices increase with the “percent change in total housing units“. A census made in 1980 by the US Department of Commerce shows that “Most of the States with the greatest increase in median value were also the States with the largest percent increase in population between 1970 and 1980. Conversely, the slower-growing States were among those with the smallest change in median value. States with the smallest percent increase in median monthly contract rent had high median rent initially in 1970. Large percent increases in rent were most common in States with below-average rent in 1970 and rapidly increasing population during the decade.” In the “State Nation’s Housing” report of 2018, the JCHS provides the maps of the price-to-income ratio between 1980 and 2017. The relation of those two documents covering the evolution between 1940 to 2017 shows that the inflation of wages has always been behind compared to the inflation of housing and since 2000, the phenomenon dramatically increased. The JCHS to conclude that “Homeownership rates among young adults are even lower than in 1988, and the share of cost-burdened renters is significantly higher, with almost half of all renters paying more than 30 percent of their income for housing. Soaring housing costs are largely to blame.”
The two documents from the US Department of Commerce and the JCHS may indeed show that “soaring housing costs” is not the only factor in housing shortage but that other sociological factors may have led to this result. While tenement houses have almost disappeared in the United-States, subletting has become more than an economical constraint. It is a way of living largely encouraged with TV sitcoms where traditional housing is managed by tenants. Tenants define their own subletting criterias and choose their own community, satisfying at the same time the landlord with higher rents and lower risks to cover real estate investments. The subletting industry has maintained and encouraged landlords to increase their growth on housing and turn their initial investments into a full time job.
In a book dated 1919, “The Cost of Living Among Wage-Earners” the author makes a comparison of the costs of food, shelter, clothing, fuel, heat, light, and sundries between 1914 and 1918 in Fall River, Massachusetts. While food increased of 80%, clothing 125%, fuel heat and light 56%, gas 31%, “The Real Estate Owners’ Association voted to increase all rents 20% beginning in August, 1919, and the secretary of the association reported that landlords had very generally put this increase into effect.” In this example, the economy of housing is driven by two factors, the increase of the cost of life and the profession of annuitant, a profession largely motivated by profits to live solely on rents. In “War Emergency Construction (Housing War Workers), Report of the United States Housing Corporation”, volume I, the Department of Labor provides a “Criticism of the Real Estate Plan”, and summarize as this: “The success of the real estate plan depends on speculative profits. (…) there would be constant competitive bidding in each locality for labor and material, with the consequent increase in cost as well as delay in construction.” To limit all forms of speculation on affordable housing, the government provided loans to local housing companies and limited the operations to a strict regulation defined in the report. This regulation will be the business model of the demonstration program to manage the construction, the maintenance and the operation of the village. The SAB Center will design the prototypes, build them and manage their occupancy as a research asset.