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ZONING AND PLANNING. These rules are twisted by countless suburbs to keep housing prices high. The effect is to exclude unwanted families, notably Negroes. Localities often require one-acre or even two-acre lots, or needlessly wide and costly roads. Many have resisted developers' plans to cluster houses in compact groups, which would lead to a considerable saving on sewers, roads and other facilities and provide surrounding open space big enough to serve as a park.
FEATHERBEDDING. Make-work practices imposed by building unions can grossly inflate the cost of a house or apartment. In 1967 the U.S. Supreme Court upheld the right of Philadelphia carpenters to refuse to hang doors that had been precut and equipped with knobs and hinges in a factory. Construction unions regularly insist on hefty wage increases, arguing that building is a seasonal business. In contracts signed so far in 1969, construction unions have won average wage gains of 15% a year for two or three years. Construction wages are the fastest rising part of the U.S. economy's labor costs, and they are the main reason why total construction costs during the past twelve months rose by 71%, the sharpest gain in 24 years.
CLOSING COSTS. Archaic title-search and title-transfer requirements needlessly inflate closing costs and provide lawyers with fees that many home buyers consider excessive. By some estimates, home buyers pay $1 billion a year in closing costs.
LAND COSTS AND TAXES. Since 1950, the price of land for homes has climbed by 16% a year. Land accounts for one-fifth of the total cost of a new house, compared with one-tenth two decades ago. Inflation of land prices is greatly fostered by the U.S. system of real estate taxation. Localities generally tax vacant land lightly; that makes it easy for speculators to hold land off the market in hope of selling for more later. Heavy taxation on building inhibits both new construction and improvements on existing structures. Today, most cities collect two or three times as much revenue from taxes on improvements as from taxes on land. The arrangement subsidizes blight, decay, slum formation, suburban sprawl, and even the premature carving up of fringe acreage into subdivisions.
All these housing problems are compounded for the people who live in the center of cities, particularly in the slums. The Government, in its well-intentioned effort to rid cities of slums and help the poor, has adopted a complex array of subsidy plans, notably in public housing and urban renewal, but both programs have failed to reach their laudable objectives. Some 757,000 U.S. families now live in public housing, which often costs much more than private housing of the same size because of Government red tape, excessive specifications and exorbitant site costs. For every unit of public housing built, state and local governments have torn down two other dwellings. Columbia Professor Charles Abrams, the venerable pundit of public housing, argues that until many more units are built even slums must be considered a national asset. Buying up slum sites costs as much as $485,000 an acre, and the success of one project often makes the next one more expensive by driving up realty values.