Residential income vacancy survey by Apartment Association of Los Angeles County, Inc., Los Angeles 5, Calif. 11. Amount spent on rehabilitation since Dec. 20, 1950--- 15. Gross monthly rent as of April 1, 1951. 16. If you do not desire to answer questions 12, 13, 14, and 15, give percentage of increase on all rents $951, 594. 44 6, 264 314 3,862 7.7 (Signature of owner, operator, or manager) (Address) All information submitted will be kept confidential. Only total figures will be used. Mr. H. F. SHIRLEY, LONG BEACH CHAMBER OF COMMERCE, President, Apartment House Association, Long Beach, Calif. DEAR MR. SHIRLEY: We appreciate the opportunity to give you our conclusions with respect to the housing situation in Long Beach-particularly in the light of pending legislation to reactivate rent controls on a Nation-wide basis. Incidentally, you will be interested to know that our directors recently recommended that our Representatives in Congress vigorously oppose H. R. 1340, H. R. 1946, H. R. 2051, and other identical or similar rent-control measures, the premise of which is * * * "that an emergency exists with respect to housing accommodations-due to the acute shortage of all types of housingespecially rental housing." We not only objected to the unrealistic premise, but to the many arbitrary provisions of the act as well. In presently decontrolled areas, such as Long Beach, the standards set up in these acts for reestablishing rental price levels are exceptionally stringent. Owners of newer properties especially would be penalized. In the opinion of our directors it would be a blunder of serious magnitude to subject our property owners to such burdensome and arbitrary restrictions in the face of our present well-balanced situation. It not only would be unfair, but wholly unwarranted. Recent chamber studies clearly indicate that there is no housing shortage in Long Beach, and there won't be if builders are allowed to continue to build homes in ratio with evidenced demand-that rental vacancies far exceed demand at the present time-and that increases in rental prices since decontrol in January of 1950 have been much less proportionately than for other commodities and services. In fact, a recent spot study of over 500 apartment units showed that rents actually have been reduced in a number of instances in order to attract tenants. This situation was strikingly evidenced by recent experience in connection with reactivation of the Long Beach Naval Shipyard in January of this year. In a brief 4 months' period the Navy has recruited a personnel of about 5,000, and it is expected that their total force will reach 6,000 by early summer, Many people, including executives of the shipyard, expected that this would throw a terrific housing burden on the community. Such, however, was not the case. As a result of a meeting called by the chamber early in February, shipyard executives were literally flooded with rental listings. In checking with the housing section Friday of last week, we found that they have been calling landlords to determine if facilities listed were still available, and on the same rental basis as initially submitted. In a high proportion of instances not only were the facilities still unrented, but in a number of cases landlords offered to reduce the monthly rental if suitable tenants could be obtained. One reason, of course, for this unexpected turn of affairs is the fact that approximately 70 percent of the personnel recruited already were living in the area. In our opinion, however, this situation will prevail throughout the present emergency. The Nation-wide scarcity of manpower alone will require that the shift be in product rather than in workers. In fact, a recent statement by the Department of Defense indicated, in effect, that defense mobilization need not-and without a doubt will not-result in a large-scale migration of workers. Douglas Aircraft Co.--the largest single employer in the area-reports similar experience. Over the period of the past year they have gradually recruited from a force of approximately 8,000 to their present level of 11,500. They do not even maintain a housing service section, and report that at no time during the past 3 years has housing in this area posed any problem. They also recruit chiefly from within the area. The reason, of course, for our fortunate position with respect to housing is the unprecedented program of residential building in the area. As you will see from the attached summary of a study recently made by our chamber, private housing in the area has increased 72.8 percent as of December 31, 1950. This does not include 3,920 units of Federal housing built during the war, which brings our total increase to 78.5 percent. During the same period population in the area increased 77.8 percent. A further indication that our people are adequately housed is shown by the ratio of persons per dwelling unit in the city of Long Beach at the present time (population divided by the number of occupied units in the city). Our current ratio is 2.67 persons-even lower than the 2.81 ratio that existed in 1940 when we had a 10-percent vacancy factor. During the year 1950 alone 8,862 units of residential housing were built in the area. Lakewood Park, Inc., the largest subdivider in southern California, reported 7,050 starts, of which 6,000 were completed and occupied at the end of last year. They presently have plans on file for the erection of another 7,000 to 8,000 single-family residences, together with several hundred-possibly as many as 1,000-multiple-family units. Within the past several days plans have been announced by three other builders in this vicinity for a total of 1,005 single-family residences. These firms are the Aldon Construction Co., in Lakewood Plaza (builders for Walker & Lee); Harry Coonen, in the vicinity of Fifty-second Street and Orange Avenue; and Cunning ham & Britton, in the area between Conant and Parkcrest Streets near Woodruff Avenue. Getting back to our rental situation-last fall a local firm made a careful survey of rental vacancies in the city. They reported 3,836 vacancies, which represents a factor of 4 percent of our total housing which, at the end of 1950, numbered 95,417 units. This also represented a 41-percent increase in housing vacancies since the city manager's survey in October of 1949, which served as the basis for rent decontrol in Long Beach. In spite of the large-scale recruitment at the Long Beach Naval Shipyard, we believe that rental vacancies at the present time are as great-or possibly even greater due to the large number of persons that have purchased and moved to new homes that are now so plentiful in the area. For your further information we enclose clippings from the classified sections of our two daily papers. You will note that nearly a full page in each is devoted to rental listings. All factors considered, we are certain that rent controls in this area are wholly unnecessary and that private enterprise is well able to meet any and all housing requirements that may arise. Any effort to place rent controls in this locality at this time, or to build Government housing or subsidized low-rent housing would be a serious blunder. Sincerely yours, LONG BEACH CHAMBER OF COMMERCE. SURVEY OF RENTAL CONDITIONS IN PORTLAND, OREG., SINCE DECONTROL OF RENTS, DECEMBER 29, 1950 A FACTUAL REPORT OBTAINED BY A QUESTIONNAIRE SUBMITTED TO OWNERS OF RESIDENTIAL RENTAL PROPERTIES COVERING RENTS, VACANCIES, AND RENTAL HOUSING TRENDS (Compiled by Oregon Apartment House Association) FACTS AT A GLANCE 1. Rents up only 9.4 percent. 2. Substantially more rental accommodations available. 3. Better upkeep and maintenance of rental properties. 4. Tenant and owner relationship improved. DECONTROL OF RENTS IN PORTLAND, OREG. Residential rents were decontrolled in Portland, Oreg., December 29, 1950, by Housing Expediter Tighe E. Woods, acting upon a resolution of the Portland City Council as provided in the Housing and Rent Act of 1950. During the numerous and lengthy hearings on rent decontrol by the City Council of Portland, beginning in October 1949, until its final decision terminating rent controls on November 22, 1950, it was stated by proponents of continued rent controls that serious consequences would result if rent ceilings were terminated. Among other things it was stated that "rents would double," rents would "skyrocket," and that a serious economic dislocation would face families residing in rented quarters. It is interesting to examine the record since rents were decontrolled in Portland, Oreg., on December 29, 1950, and to find out whether or not the dire predictions made have come to pass. In order to determine just what would happen after rent ceilings were lifted in Portland, the Oregon Apartment House Association, representing some 500 owners of rental property who operate approximately 10,000 rental units in Portland, undertook the responsibility of setting up an investigating committee of its own members to cooperate in the transition of rent control to a free rental market. A telephone reporting service was retained and a telephone number publicized through the press inviting tenants to report excessive increases in rents. This committee was later joined by a similar committee from the Portland Central Labor Council and personal investigation were made jointly by representatives of the two organizations. Conclusions reached by both organizations were that there were few cases of excessive rent increases. These were confined mostly to older houses and rundown housing units in poor housing areas. A summary of conditions existing in Portland, Oreg., after 4 months of decontrol indicates the following developments: 1. Rents in Portland, Oreg., have leveled off at approximately 9.4 percent above controlled schedules in effect under Federal rent regulations To determine the results of decontrol of rents in Portland, Oreg., the Oregon Apartment House Association made a survey covering 4,402 rental units, requesting a statement of gross rental collections for December 1950 (under rent control) and May 1951 (4 months after decontrol) which revealed the following information: Gross monthly rent before decontrol (December 1950, 4,402 rental Gross monthly rent after decontrol (May 1951, 4,402 rental units) -- $226, 229. 12 239, 719. 82 9.4 2. A considerably greater number of rental accommodations, including houses, apartments, duplexes, housekeeping units, and furnished rooms are available to the renting public since decontrol A tabulation of classified rental ads taken from newspapers shows a progressive increase since decontrol, with listings exceeding those of prior weeks during the past 6 months. Counts of ads appearing in the two daily newspapers-the Oregonian and Oregon Journal-for 4 months in 1950 and 4 months in 1951 are as follows: Number of individual ads by month, 1950 (before decontrol): September October December Total. Number of individual ads by month, 1951 (since decontrol): January February March April Total. Increased number of ads since decontrol_‒‒‒‒ 11, 607 13, 016 13, 748 13, 789 52, 160 15, 172 14, 345 15, 609 17, 467 62, 593 10, 433 As evidence of this trend, the Sunday Oregonian, of May 6, 1951, listed the following ads under "Wanted to rent" and "For rent": In addition to the above, rental agencies in Portland, Oreg., who specialize in finding rental accommodations for tenants, report the following: Oregon Rentals, Inc., 315 Northwest Ninth Avenue, Portland, Oreg. (Mrs. Saelens, manager): "Most apartments for rent since I have been in rental business-owners have to clean up apartments before tenants will rent. There is a decreasing number of lookers for apartments. Apartments available at practically any rent range." Raleigh Rentals, 206 Southwest Sixth Avenue, Portland, Oreg. (Earl Briggs, manager): "There is an oversupply of apartments. Tenants for apartments are much more choosy. Some shortage of houses for rent in lower rent ranges. Many apartment tenants, living in low frozen units under rent control, now buying houses. Rents for houses firm. Rents for apartments softening-apartment vacancies greatly increased last 60 days." Bushey Rental Service, 521 Park Building, Portland, Oreg. (Charles L. Bushey, manager): "On the whole, the rental market remains rather tight; however, there has been a substantial change in conditions since decontrol on January 1. Prior to that time, a large percentage of our clients came to us because there was absolutely nothing available that they could find; now many of them come into our office to enlist our service because of the wider selection we are able to offer. We find that there are definitely more vacancies available now than there were under rent control. Vacancies are more frequent in apartments, courts, duplexes, and flats and these vacancies remain unoccupied for a longer period of time. There seems to be only a slight increase in the number of vacant houses." 3. Increasing vacancies in Portland, Oreg., since decontrol of rents Decontrol of rents in Portland has produced an expanding source of rental units in the following manner: (a) Return to the rental market of hundreds of rental units withheld by owners fearful of complications with the Federal rent agency. (b) Release of hundreds of apartments by former owners of single-family dwellings who had sold their homes and occupied apartments at low rents during rent controls. These people have now moved back to purchased homes. (c) Turn-over of single tenancies in larger rental units who rearranged their housing and made larger units available to increased number of renters. (d) In the year 1950, Portland, Oreg., experienced the greatest building boom in the history of the city. New residential units, both single-family and multiple dwellings, have given Portland its greatest supply of residential housing. At present, approximately 2,000 new rental units will be available for occupancy between now and August 1951. 4. Present vacancy in Portland indicates that no shortage of housing exists A survey conducted by the Oregon Apartment House Association on May 1, 1951, covering 4,402 rental units shows a vacancy of 217 rental units, or a percentage of 4.9. These units are nearly all in the middle rental ranges of from $40 to $65 per month. Vacancies in the cheaper so-called housekeeping apartments were estimated to be 10 percent by the Housing Expediter's office in September 1950, in a housing survey in Portland. Title 608, FHA projects in July 1949 had a vacancy of 19 percent which is probably even greater at this time. On the basis of an average vacancy of the three classes of housing, Portland now has an approximate 11.3 percent for all rental housing, the greatest for many years. It indicates clearly that the law of supply and demand will operate effectively, and that rentals will stabilize at present levels, except in newer higher priced rental units which will have a tendency to soften as vacancies increase. 5. Competitive conditions and improvements to residential rental properties In a questionnaire sent by the Oregon Apartment House Association to the membership in March 1951, it was learned that a report covering 275 apartment buildings indicated that these owners of apartment houses expected to spend $573,353.53 for replacements, repairs, and improvements to their properties. This would be about $885 per rental unit covering 6,473 rental units reporting. This figure may be subject to increase due to the progressive vacancy situation which creates a tendency to improve more occupied units to retain tenants. This is one of the many benefits of decontrol resulting in an increase in sales of equipment and employment of labor in the Portland area. GENERAL CONCLUSIONS The removal of Government rent controls in Portland, Oreg., has set in motion all of the factors mentioned in this report which tend naturally to keep rents under automatic control. It has created a competitive rental market in which owners are seeking tenants instead of tenants having to act immediately to secure living space. The result is that better and cleaner accommodations are being offered. Owners are beginning to find it necessary to clean up and improve their rental units, both to hold present tenants and to attract new tenants to vacant accommodations. This has benefited many tradesmen who cater to residential owners in supplying labor, materials, and equipment for rental property. |