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Salem residents themselves caused the Salem Home Builders Association to fail. Salem people made a big flurry about wanting homes - but as soon as they discovered it would cost something to build them, they backed out....When people found they had to pay 20 per cent down, they lost interest and backed out."
So said Fred Legg, local architect and manager of the short-lived Salem Home Builders Association, in September of 1920, blaming Salemites as users, buyers, and creators of any demand.
From the newspaper alone it may not be possible to say exactly why the company failed, and it would be necessary to compare its organization horizontally to similar enterprises in other cities and states and vertically to any other Salem project at a different time.
That is not possible at the moment, so this is merely a snapshot, but it is a small piece of historical evidence that the market and private enterprise alone cannot supply meaningful quantities of affordable housing. Even in the laissez-faire world of 1920, something wasn't workable about the enterprise.
In an editorial a couple of days before the blaming, the afternoon paper agreed that
"the housing question has got beyond private capital and that government assistance...must be forthcoming....unless some construction program of federal, state, and community co-operation is speedily forthcoming, the housing problem will become a serious factor in public welfare, contributing incessantly to social unrest."
The project started in the fall of 1919. Rents and housing costs were up, apartment homes and houses were in short supply. The solution was obviously to build more housing.
A plan to aggregate capital to fund construction by selling subscriptions to Salemites seemed promising, a sure-fire investment opportunity, a win for the business community and a win for small-scale Salem investors supporting home industry.
The goal was to incorporate with a quarter-million.
December brought a false start, and things seemed better in January.
Still, even after editorials promoting it, they only got promises for $50,000.
And after a half year, the paper called it "
the most monumental fizzle of the year."
They observed "
about the city, people are living in tents, waiting in vain to secure a house or apartment."
By the end of the month, the Association announced plans to liquidate.
It's hard to say what the "lack of proper co-operation" really indicated. Perhaps Commercial Club members saw a bit of a grift at first, and backed out when it did not seem so profitable after all. The down payment requirements would also limit buyers, who might instead be able only to rent. There were probably multiple dimensions of over-expectation.
Maybe there will be more to say later. (Perhaps readers will know something about other home building associations, also, and be able to fill in with other historical detail.)
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