Rising Rents

Since Depression lows, the cost of food in the U. S. has jumped nearly 40%. The cost of clothing has gone up nearly 25%.

Meanwhile the cost of shelter, lagging behind changes in the general commodity price level, has risen only about 16%.

Though commodity prices in the U. S. turned upward about the time President Roosevelt took the dollar off gold, rents continued to decline until the beginning of 1934. By last week U. S. citizens were well aware that rents were catching up with other basic elements in the cost of living. Once started, there was good reason to expect that rents would rapidly overtake the general price level.* The same factors that are making for revival in the building industry are responsible for stiffening rents. At the start of Depression surplus U. S. housing amounted to 700,000 dwelling units. By now, what with the increase in population and the almost complete cessation of building for several years, that surplus has turned into a housing deficit of 2,000,000 units. That figure is the underpinning for most of the talk about a building boom.

This does not mean that 2,000,000 families are now camping in the woods waiting for houses to be built for them. Building has merely fallen behind the net increase in the number of families and the normal rate of housing obsolescence. The slack has been more than taken up by two or more families sharing what is rated as a one-family house or apartment. During Depression the usual method of doubling up was for young married couples to return to their parents or for parents to descend upon their married children.

In the last two years there has been a steadily increasing amount of family unscrambling combined with a marked rise in the marriage rate. Both boost the demand for living quarters, inspiring landlords to raise rents when leases expire and encouraging them to hold out for their asking price instead of accepting the first bid, as they were only too glad to do during the lean years.

*Standard maxim for centers: make long-term leases in depressions, short-term leases in booms. Currently favored are long-term leases because of the possibilities if inflation.

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