Building Shortage

Despite the unprecedented amount of construction in the past few years, it is claimed by S. W. Straus & Co. that a $4,000,000,000 building shortage still exists. The firm in question has conducted a survey of national scope in all cities over 10,000 population. Out of 528 cities studied, shortages in 389 totaled $4,050,820,000--$2,102,698,500 of it residential, $1,130,851,500 commercial and $870,270,000 for public buildings. The remainder cities revealed no existing shortage. Moreover, in some sections of large cities, a condition of surplus rather than shortage was revealed, although the whole city might possess a net shortage. Obviously it is and will be more necessary than recently for builders to pick good locations and finance new projects conservatively. To some extent, the Straus survey is borne out by the Dodge figures for awarded building contracts. In October, the latter amounted to $410,000,000, which is 19% over the preceding September, and 14% over October, 1923. Rentals here in general held up fairly well. The landlord must, however, learn one important economic truism. He may hold up high prices for a while, without profit or at a loss to himself. But high prices encourage production, which sooner or later produces an unusable surplus, which in turn reduces prices again. The longer artificially high prices are sustained, the harder will be the eventual smash.