Mutual Ownership Defense Housing Division - The Demise of The Mutual Ownership Defense Housing Division

The Demise of The Mutual Ownership Defense Housing Division

There were a number of pressures, factors and individuals that contributed to the early end of the Mutual Ownership Defense Housing Division.

On November 30, 1941, just eight days prior to the Japanese bombing of Pearl Harbor and the start of direct United States involvement in the Second World War, tenants of the last mutual ownership project (Winfield Park, New Jersey) began to move into their new homes. The outbreak of war ignited the smoldering debate over permanent vs. temporary housing for the defense workers. Early shortages of materials, equipment and manpower for construction, along with the early retreat of the allied forces on all fronts, added support to the argument that emergency housing should be only of temporary nature, and not built in support of long-term postwar goals. The construction of temporary housing quickly became the program's emphasis. But the mutual housing program was based on long-term financial planning for the construction of permanent housing, and could not function with this new temporary construction emphasis. Support for centralizing the defense housing effort was also increasing, and resulted in the February 24, 1942 establishment of the National Housing Agency by Executive Order of the President. Those individuals sympathetic to centralization were not very supportive of experimental housing programs. Even prior to the formal outbreak of war, the entire defense housing program, under pressure from Congressional conservatives and industry officials, began to make a significant switch to private sector initiatives to get the defense housing job done. Supporters of this new direction strongly believed that private industry was far more efficient, and "..could utilize a few lots here and a favorably located site there, wholly unsuitable for large-scale Government projects." Congressional support of the private construction industry came in the legislative form of Title IV of the Lanham Act, passed in the Spring of 1941. This legislation provided 100% financing for speculative builders of housing for workers in defense areas. Obviously Title IV was meant to serve the same housing market as the mutual housing program. Evidence also suggests that the staff of the NHA was far more conservative than had been the staff of the FWA. This swing to the right was completed when 700 members of the consolidated staff were laid off; many of those leaving were among the most progressive, and many programs, including the mutual housing program, were officially ended. This newly consolidated agency moved quickly to develop programs that were especially supportive of private initiative programs for solving the defense housing need, and generally supportive of Title IV. Colonel Lawrence Westbrook noted in 1945 testimony that the NHA had destroyed the mutual housing program even at a time when requests for expansion of the program were pouring in from across the nation. Although news of the mutual housing concept had spread quickly through the labor union network, and many committees had been organized by workers to aid the implementation of the plan locally, all committees had to be told that the program was experimental in nature and no more staff could be made available to work with them.

During its short period of existence neither financial nor personnel resources were provided at the necessary levels to effectively support and operate the Mutual Ownership Defense Housing Division. The eight projects undertaken were far more than the Division could handle with its limited resources. Claims and investigations of mismanagement of the Division were partially related to Westbrook's weak supervisory abilities, but they were also due to oversights and mistakes made by a small, overworked staff trying to do more than it could efficiently do, in an unsupportive environment. In addition, problems at many of the projects—especially those in New Jersey—provided a lot of ammunition to critics of the mutual housing effort. Once publicized, these difficulties generated a large political and public backlash against the project. On November 30, 1942 Life Magazine provided its readers with a photographic expose on the Truman Committee's investigation of the Winfield Park Project, which reported:

"These hearings are to establish and fix responsibility for the outrageously inept planning, construction and supervision of the 700-home project financed by the Government to house war workers from nearby Kearny, N.J. shipyards."

The very nature and concept of the mutual housing program was threatening to other government housing officials because it would result in a further division of limited resources, and because it called for the ultimate disposal of projects through direct purchase by its residents; although this was a very innovative concept in the United States, it would result in the reduction in the number of these same government managers and administers. The mutual housing concept was also not easily understood, contributing to the lack of support or remorse at the prospect of the demise of the program. An illustration is the October 29, 1941 Congressional testimony of Nathan Strauss, Administrator of the United States Housing Authority (the Authority had essentially been put out of business by the June 1940 defense housing amendment to the 1937 Housing Act):

"Next, the Federal Works Agency, no doubt pressed hard by other eager outstretched hands, sought still additional methods of getting defense housing done. Some money was made available to the Farm Security Administration, to the Tennessee Valley Authority, and within the FWA itself another unit was set up, the Mutual Ownership Division of Defense Housing, under Col. Westbrook. I don't know exactly what they do, sir."

But then he became very critical of Title IV of the Lanham Act. He stated that he viewed Title IV as a:

"...device evolved by the Defense Housing Coordinator to utilize the desperate need of defense workers for shelter in order to force them into the purchase of a home...The result of the enactment of this bill would be to give away millions of public funds to speculative builders to enable them to sell homes on the installment plan to workers whose probable inability to meet the installments is the very justification urged for enactment of the bill."

Either Strauss knew as little as he indicated about the mutual housing program, or he was deliberately obfuscating, since a successful and growing mutual home ownership program would have pushed housing programs in a completely different direction from those already under way at the USHA.

There was also a great deal of discussion about the legality of the mutual housing program. This discussion was sparked by Charles Palmer, the Defense Housing Coordinator, during 1941, although there was never any clear statement of an actual legal problem related to the mutual housing program. On a number of occasions the Legal Counsel of the FWA and Westbrook were asked to defend the legality of the program. They announced that they could not find any violation of the law. But the question itself, posed by the Defense Housing Coordinator, created a number of doubts among influential individuals who could have protected and encouraged the program, rather than watch it be dismantled.

Taken together, these issues, concerns, falsehoods and speculations would have injured even a strong and stable program, but in this case completely undermined an innovative experimental program. It is actually surprising that the mutual housing program survived as long as it did. In 1942, the Council for Industrial Organizations (CIO) expressed its concern at the ending of mutual housing effort, and at the small percentage of permanent housing being built as part of the Defense Program. In March 1942, a CIO representative presented to Congress a copy of his organization's resolution on war workers' housing in the United States, that included the following demand:

"We demand not only that there be a return to a sane program of building planned housing communities, but insist further that war workers as tenants, through the labor organizations which represent them, be given an opportunity to participate in planning the layout and construction of such communities and in their cooperative management after construction, and renew our endorsement of the Mutual Home Ownership Plan.."

These protests were ignored by Congress, and the mutual housing program never revived.