Breaking the Building Blockade
»Must a great post-war housing program be hamstrung by restrictive building codes?
by ROBERT LASCH
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WHEN the question of revising the building code came before a City Council committee in Chicago last spring, few citizens were on hand. But Paddy Sullivan was there, and Paddy Sullivan expressed himself eloquently against revision. “Shacks for workers!” he thundered.
It was an old and familiar refrain. Paddy had sung it in 1938, with such effect as to block the adoption of modernized building regulations proposed by a committee of architects and engineers. He had sung it again in 1941, when the Federal Housing Administration proposed relaxation of the code to permit construction of urgently needed homes for war workers at minimum cost.
Now, as Chicago groped for some way of converting 22 square miles of slums into decent residential areas, — a project which might arrest the city’s characteristic decay and at the same time provide employment after the war, — Paddy counted himself in, and left no doubt that he stood where he had always stood. In Chicago, Paddy is president of the Building Trades Council and spokesman for the established craft unions of the construction industry. Frequently, by accident or design, he is also the spokesman of business interests which, like the unions, have a real or imagined stake in traditional methods of construction.
Paddy and his counterparts elsewhere pack a hefty political punch. That is one reason why many cities have found it impossible to keep their building codes up to date; why home construction often bogs down under artificial costs; why ordinances originally intended to establish standards of safety and sanitation have grown into protective walls surrounding entrenched materials and labor.
Our national housing needs can be conservatively estimated at a minimum of 1,000,000 new dwelling units a year for at least ten post-war years, as compared with an average of 700,000 built annually during the boom of the twenties. This figure is based upon the accumulated deficit of a long depression, population growth, and steady residential deterioration, particularly during the war.
The need is not for just any houses. It is for lowcost houses. In 1939, families able to afford a house costing less than $30 a month (rent or payments) provided a potential market for more than 320,000 new homes. But only 12,000 were built to tap that market. Under the traditional organization of the building industry a substantial majority of the population has always been expected to obtain living quarters by hand-me-down. As a study by the Twentieth Century Fund (American Housing, Problems and Prospects, 1944) emphasizes, the number of new dwellings fed in at the top to the upper-income third “is too small and too little adaptable to make possible a reasonable standard of housing for the population as a whole.” Not only that. It is too small and too little adaptable to permit sustained high levels of activity in the home construction industry. The people suffer from bad housing; the industry suffers from underemployment and violent cyclic swings.
In order to achieve a sustained annual output of a million houses or more, ways must be found to reduce costs without impairing quality of construction. One way is subsidy — an appropriate device in public housing programs designed to eradicate slums and rehouse the lowest-income groups who inhabit them. But public housing does nothing for the great middle group which has the capacity to pay an economic rent but is now compelled to pay it for worn-out, obsolete, hand-me-down shelter. For this group, we need an integrated housing policy, beginning in the towns and cities and reaching up to the Federal government, aimed at bringing down the costs of owning or renting a place to live.
Construction costs are of course not the only barriers. Inflated speculative values of land must be reckoned with. Burdensome real-estate taxation is a factor. Above all, further reduction in mortgage interest rates and amortization charges (along lines already tested by the FHA) offers hope of substantial cuts in the monthly fixed charges.
These savings, coupled with those possible in construction cost, could bring new shelter within the reach of a whole new income range. A 20 per cent reduction in financing costs and a 20 per cent reduction in construction costs— both well within the bounds of feasibility — would lower the monthly carrying charge on a typical home by 30 per cent.
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HERE is where Paddy Sullivan and the building code come in. The kind of code that Paddy wants to maintain in Chicago keeps the average cost of a house somewhere above $6000. To make new housing available to more people, our goal must be production of the same house for $4000 or less.
Chicago — an area having some of the highest costs in the country — has had an illuminating experience with building codes, which might serve as a warning to other cities.
The city set out to revise its code in 1927, during the administration of the late Mayor Thompson, who liked to be known as Big Bill the Builder. For eleven long years, through the upswing of a boom and the downswing of a depression, pressure from the entrenched interests prevented any action at all. When the City Council took up the ordinance at last, it quietly strangled nearly all the recommendations submitted by an expert committee. Clause by clause, progressive measures encouraging the use of new materials and methods in home building were deleted. The new code finally enacted into law required in general the same type of construction that had prevailed for thirty years.
In 1933, Chicagoans had gazed with admiration on modern types of construction exhibited at the World’s Fair. In 1938 their City Council outlawed most of these innovations. When it was proposed to permit use of metal or fiber board for exterior sheathing, as alternatives to lumber, aldermen raised a horrified cry of “tin and paper” houses. Memories of the Great Fire were invoked on behalf of traditional masonry construction. At the same time, however, fabricated steel dwellings were prohibited, one alderman solemnly declaring that in case of fire such a house would fry the occupants as in a skillet.
Cellular steel and concrete floors, used safely for years on railroad bridges, were ruled out for home construction. When the matter of perforated brick arose, the council decided to specify the exact location of the perforations. This had the incidental effect of compelling outside manufacturers either to make a special brick for Chicago or to yield the field to local interests, which, as it happened, made only solid brick.
Nothing illustrated the forces at work better than the case of plaster walls. The experts, acknowledging that wallboard and other dry-wall methods had been developed to provide fire protection equal to that of wet plaster, proposed to permit use of these materials. In committee, at the instance of the plasterers’ union (no protest being recorded from the plaster manufacturers), aldermen changed the provision by requiring that any substitute have the same total thickness as a traditional wall. Mayor Edward J. Kelly, who was about to come up for reelection, then persuaded the councilmen to add a further qualification, requiring that any substitute possess the “sanitation value” of a “seamless plaster wall.” He stated frankly that he acted at the request of the plasterers.
So a formula was worked out which, under pretense of permitting plaster or its substitutes, actually banned the substitutes. An incidental but by no means insignificant result was that it erected a barrier against all experiments in the building of prefabricated houses. Prefabrication requires drywall construction of some kind, and the simplest way to make it illegal, or to rob it of an economic advantage, is to require that interior walls be plastered.
One need not assume the superiority of dry-wall over plaster, perforated over solid brick, fiber over lumber sheathing, to perceive the evil effects of a code which sets up discriminations of this sort. The discriminations are there, not because any material is better than its competitor, or serves the public welfare better, but because some have political pressure behind them and some do not. The consequence is to increase building costs without a compensating increase in safety, sanitation, or any other proper purpose of building regulations.
The root of the evil lies in the legislative method of establishing regulations. There is something ridiculous about city fathers holding long and tedious debates on eight-inch versus twelve-inch walls, brick veneer versus full masonry, metal lath versus wood, and similar subjects of engineering technique. Clearly the intelligent way to establish home construction standards is to specify certain requirements as to strength, fire resistance, sanitation, and to permit an administrative agency, properly safeguarded from political interference, to authorize the use of materials which meet those tests.
When Chicago’s expert committee proposed such an arrangement, the aldermen rejected it as a usurpation of their powers. Whereupon they wrote into law a code which the Antitrust Division of the United States Department of Justice denounced as “arbitrary, unreasonable, capricious,”and productive of excessive costs and barriers to interstate commerce. Legal complications unfortunately prevented antitrust action against the code.
Many cities will enter the post-war era unprepared to take full advantage of modern methods of home construction. Legal requirements originating in ignorance of stresses and strains, and based upon the principle of requiring plenty of material just to be on the safe side, have hung on despite the advance of technical knowledge. One study in 100 cities showed all of them specifying masonry walls eight to seventeen inches thick. In Britain, fourinch masonry walls have stood for years, and in this country many new wall materials have been developed which do not depend upon thickness for strength.
Variations among the two thousand codes now in force pose special problems for manufacturers, shutting them out of some markets and preventing standardization. Where different types of construction compete, the provisions of the code may determine which one gets the advantage in a given city.
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PADDY SULLIVAN makes a convenient target for labor haters; so the unions have borne their full share of the onus of high costs. Certainly most building-trades unions could use more progressive leadership. At the same time, one must recognize that the restrictive practices of unions would not be tolerated if the general commercial atmosphere of our cities did not accept the restrictive practices of business. Whenever a union benefits (or imagines it benefits) from a certain type of restraint, a materials dealer or subcontractor usually benefits too. The plumber who refuses to install a Sears, Roebuck fixture does a valued favor for the big manufacturers. Let us not condemn the unions alone for practices common to the industry as a whole.
In many parts of the country, material dealers have organized local associations to keep prices up. Union glazers frequently refuse to install windows fully fabricated at the mill. Electricians and plumbers boycott pre-assembled equipment. Painters rule out the use of spray guns, or even the use of brushes exceeding a certain width.
In Chicago, stone contractors and unions prohibited the use of pre-cut stone from Indiana, insisting that the cutting be done in Chicago. That gave a competitive advantage to the local contractors and a work monopoly to the local union; but it also increased the cost of shipping stone, and so reduced the potential market for it. In New York, lathers refused to install metal lath and metal rods which were not cut and bent, at extra expense, on the job. Thurman Arnold has described the celebrated case of the Houston plumbers. When prefabricated pipe of fitted lengths was delivered to the job with threads already cut, they demanded the right to cut off the threads and rethread the pipe at the site. But by rejecting prefabrication they were narrowing the market for pipe and helping to narrow the market for new houses.
State laws, many of them depression-born, often license local contractors in such a way as to handicap if not exclude out-of-state bidders. This protects “home industry,” and likewise enables inefficient competitors to stay in business by a disguised tax on building. What is sauce for the contractor is sauce for the masons’ union in the form of ordinances requiring excessively thick walls or masonry construction in outmoded fire districts.
Collaboration between manufacturers and unions has been most strikingly illustrated in plumbing. The Department of Justice contends that manufacturers representing 80 per cent of the business sell their products only to approved jobbers, who distribute them only through approved master plumbers, all at fixed prices. When a price cutter enters the field, he finds it difficult and often impossible to get his fixtures installed.
The hod carriers’ union has long banned the use of ready-mixed concrete in Chicago. Mixing it in small batches on each job raises the cost from $6.50 to $8.50 a yard, which amounts to around $100 on a five-room house. In Seattle, the Department charged the sheet metal workers’ union with refusing to install any furnace not locally made. Electrical workers have engaged in the same game, using their powers of collective bargaining for the purpose of favoring certain manufacturers. The ultimate result of all such practices is another barrier to a sustained large volume of housebuilding.
So it goes with almost every branch of the housebuilding industry. A typical house contains 30,000 parts. Into its construction go 200 items of equipment and 500 labor operations involving 40 skills or trades. Each group furnishing the material or labor for one operation yields readily to the temptation to jack up its costs, on the theory that the net effect on the total is too small to affect the market. But the combined effect is deadly.
From 1926 to 1937 the cost of materials rose 10 per cent in relation to other prices. Labor costs likewise went through the depression without suffering the reductions common in other fields. When the long-awaited revival in building showed signs of starting in 1936-1937, home-building costs shot up 10 to 25 per cent a single winter. The boom was immediately choked off. Construction lagged behind needs until the war began. From 1936 to 1939, the average labor cost of a standard six-room house rose 12 per cent and the cost of materials 103 per cent.
This was the state of affairs which induced Assistant Attorney General Thurman Arnold to launch his antitrust investigation of the industry in 1939. His goal, he announced, was “ to reduce the cost of housing substantially, and thereby enable commercial builders to supply the needs of lower income groups, with a consequent enlargement of industrial activity and of employment.”
On evidence assembled by a large staff, the Antitrust Division struck at restraints on every level in 100 criminal and civil proceedings. Grand juries sitting in eleven key cities brought indictments against manufacturers, distributors, and installers of plumbing fixtures; against the late Mike Carrozzo and his hod carriers’ union for the Chicago ban on ready-mixed concrete; against lumber associations for using their grading systems as a weapon of competition; against contractors and unions in many fields (electrical equipment, plaster, hardwood flooring, sheet metal, masonry and tile, excavating, painting) for a variety of trade practices.
Altogether the investigation produced 90 indictments against 1569 defendants. In Pittsburgh, a series of indictments broke up collusive bidding and showed dramatic results in the form of a 17 per cent reduction in the cost of a public housing project. But on the whole the results were disappointing. Although consent decrees were obtained in 18 civil cases, and although some building groups announced their intention to abandon restrictive practices, the hope of forcing industry-wide reform vanished when the criminal phase of the investigation dashed itself to pieces on the rocks of a Supreme Court decision.
In the famous “carpenters’ case” (United States vs. Hutcheson), Arnold had sought to bring within the antitrust laws a jurisdictional dispute between A. F. of L. carpenters and machinists, which had stopped the building of an Anheuser-Busch plant in St. Louis. The Supreme Court ruled that unions had been given antitrust law immunity by the Clay ton and Norris-La Guardia Acts. The legality of a union’s action was to be judged, the Court said, not by its purpose or effect, but by whether the union acted alone or in concert with business interests. On this rule a conspiracy of electricians and manufacturers to restrain trade in lighting fixtures might be actionable; but a unilateral decision by a union not to install certain fixtures would not. Shortly after handing down this decision the Court, by declining to hear several other cases, indicated its intention to apply the rule broadly.
The building investigation withered on the vine. Arnold concluded that evasion of the antitrust law had been simplified, since a union might with impunity enforce restraints so long as it acted, or pretended to act, on its own initiative.
Arnold had incurred the intense hostility of A. F. of L. leaders, and his experience stands as a warning to future disciples. He was angrily accused of “persecuting” labor in general, and vigorous efforts were made to have his appropriation reduced. Actually, he had drafted his labor policy with extreme care. At the start he had determined not to prosecute any union activities directed toward gaining union recognition, better hours, higher wages, or improved working conditions. The antitrust laws, he emphasized, were not to be used as a substitute for local police activity or as a weapon against collective bargaining.
The Division limited itself to five types of restraint in which unions might be involved: conspiracies to fix prices; graft and extortion; the hiring of unnecessary labor (carefully defined); obstruction of improved materials and methods; and restraints intended to destroy legitimate collective bargaining. The first four of these restraints had been subject to prosecution for many years. Arnold’s only innovation was his attempt to deal with the jurisdictional strike, and on this his venture foundered.
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IT is evident that if the Paddy Sullivan influence is to be dealt with effectively, in the interest of a large volume of house building after the war, the strategy will have to be many-sided and resolute. Cities and states, perhaps with Federal help, will have to tackle the building codes; new Federal legislation, backed up by a public opinion intent on building houses and not on baiting labor, must be directed against restrictive practices; and the conditions must be created under which a reorganized construction industry can look forward to a sustained mass market for its output.
No city need have an outdated and restrictive building code if its citizens really want another kind. Since 1935, a committee of the American Standards Association, working with the National Bureau of Standards, the FHA, and various industry groups, has been amassing technical information for the use of cities in revising codes. Communities which lack facilities for elaborate testing of their own can legalize standard tests generally recognized in the industry.
The great need in local codes is for flexibility, maximum receptivity to new materials and methods, and basic uniformity. Recently the idea of state and national codes has been taking hold. State codes, allowing latitude for local variations, would apply minimum standards to suburban and village areas now without standards, and might encourage uniformity among the existing codes.
Whatever form code revision may take, public opinion in each community will be responsible for demanding efficient administration. City building departments which now act as a kind of embassy for the building trades must be made to serve the public. Months after Chicago had revised its code to permit ¾-inch water pipe instead of the 1-inch variety previously specified, it was discovered that city building inspectors were continuing to insist on 1-inch pipe. The purposes of better codes will be defeated if non-political, strictly technical administration is not insured.
Nor will code revision prove sufficient without an attack on the underlying characteristics of the housebuilding industry. What the industry needs is a thoroughgoing reorganization. As the Twentieth Century Fund points out, “Housebuilding suffers from arrested industrial development. It has not created a national, or even a regional market, and within its local markets there is an intense struggle among various components of the industry — more for preservation than dominance. Fearing its own position, each group resists innovations and prevents the domination of the industry as a whole by any one of them. . . . The effect is to freeze the pattern of the industry in its local mold and to deprive it of the flexibility and growing space that an aggressively expanding industry must have.”
Supreme Court interpretations of the antitrust laws make new Federal legislation necessary if we are to deal with restrictive practices. If we lack the courage or ingenuity to strengthen the antitrust laws so that cost-raising combinations can be eliminated, we ought to face the alternative: some form of price-fixing by government rather than by private individuals.
It is not too much to expect help from labor itself. While the old-line leaders of the A. F. of L. building unions have shown little disposition to revolutionize their outlook, even they are on the defensive and may be forced by mounting public opinion to seek a substitute for their philosophy of high unit costs and devil take the hindmost. Meanwhile they face increasing pressure from the more flexible labor leadership in the CIO unions.
CIO thinking puts the emphasis on low-cost, mass housing rather than on the tight control of a narrow housing market. It has more interest in providing decent homes for union members as consumers than in protecting the stake of a few union members as producers. It is receptive to prefabrication, and its vertical organization of massproduction industries is more appropriate to presentday housing needs than the craft principle of the building trades.
Some doubts may exist as to the future of the prefabricated house, but there is no doubt that the rise of a wholly new industry—low-cost home construction — can be stimulated by standardization of parts, pre-assembly of equipment, and modification of habitual construction methods. The house of the future may be built in a factory or, as some developments on the West Coast suggest, it may be built on the site by a portable factory in the form of mobile power tools. In any case, if it is going to be built differently and at sharply reduced cost, a higher order of labor statesmanship, reinforced by new attitudes on the part of business, is sorely needed.
It is quite possible for a new, low-cost, mass housing industry to develop side by side with the traditional custom-building crafts, one serving the lower and middle income groups, the other supplying its usual market in the upper brackets. Indeed, a timed and planned program of urban redevelopment, boldly designed to take up the slack in the business cycle, might sustain the national income so effectively as actually to broaden the market for the custom-built house.
After all, what serves the general interest serves the particular interest of every economic group; using new techniques to build a million houses a year will do Paddy Sullivan and his counterparts more good than a hopeless fight to preserve the old techniques in building half that number.