document resume ce 003 993 feldman, robert; … · document resume ed 107 883 ce 003 993 author...

DOCUMENT RESUME

ED 107 883 CE 003 993

AUTHOR Feldman, Robert; Idleman, Hillis K.TITLE Housing: One of a Series for Expanded Programs in

Consumer Education.INSTITUTION New York State Education Dept., Albany. Bureau of

Secondary Curriculum Development.PUB DATE 74NOTE 110p.

EDRS PRICE MF-$0.76 HC -$5.70 PLUS POSTAGEDESCRIPTORS Adult Education; *Consumer Economics; *Consumer

Education; *Curriculum Guides; Economic Factors;*Housing; Learning Activities; Resource Units;Secondary Education

ABSTRACTThe module is designed to give students a

comprehensive picture of housing and how to get dollar value when inthe housing marketplace. Further, the module acauaints students withthe work that Federal, State, and local government is doing in thehousing field and how they and their families can benefit fromgovernment help. As a result of using the module, students should:become familiar with th t! kinds of housing available; learn hoe toBeet their housing needs; choose the kind best suited to meet theirneeds; learn about mortgages and obtaining loans; recognize theimpact of economic conditions on the housing market; learn theprocedures for selling a house; learn about the government's role indeveloping housing needs; become familiar with the operation ofcooperative and condominium housing; learn about mobile homes; andsake judgments about housing based upon sound information and theirown value system. Each of the 52 units is headed by a question, towhich the answers are presented under the headings of: understanding,suggested pupil and teacher activities, and source. (Author/NH)

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U S DEPORTMENT OF HEALTHEDUCATION 4, WELFARENATIONAL INSTITUTE Of

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HOUSING

One of a series for Expanded Programs in Consumer Education

The University of the State of New York/The State Education DepartmentBureau of Secondary Curriculum Development/Albany/1974

THE UNIVERSITY or THE STATE OF NEW YORK

Regents of the University(with years when terms expire)

1984 Joseph W. McGovern, A.B., J.D., L.H.D., LL.D., D.C.L.,Litt.D., Chancellor New York

1981 Theodore M. Black, A.B., Litt.D., LL.D.,Pd.O., Vice Chancellor Sands Point

1978 Alexander J. Allan, Jr., LL.D., Litt.D. Troy1987 Carl H. Pforzheimer, Jr., A.B., M.B.A., D.C.S., H.H.D. Purchase

1975 Edward M. M. Warburg, B.S., L.H.D. New York

1980 Joseph T. King, LL.B. Shelter Island

1981 Joseph C. Indelicato, M.D. Brooklyn1976 Helen B. Power, A.B., Litt.D., L.H.D., LL.D. Rochester1979 Francis W. McGinley, B.S., J.D., LL.D. Glens Falls1986 Kenneth B. Clark, A.B., M.S., Ph.D., LL.D., L.H.D., Hastings on

D.Sc. Hudson

1983 Harold E. Newcomb, B.A. Owego

1988 Willard A. Genrich, LL.B., L.H.D. Buffalo

1982 Emlyn I. Griffith, A.B., J.O. Rome

1977 Genevieve S. Klein, B.S., M.3. Bayside

1981 William Jovanovich, A.B., LL.D., Litt.D., L.H.D. BriarcliffManor

President of the University and Commissioner of EducationEwald B. Nyquist

Executive Deputy Commissioner of EducationGordon M. Ambach

Deputy Commissioner for Elementary, Secondary, and Continuing EducationThomas D. Sheldon

Associate Commissioner for 'nstructional ServicesWilliam L. Bitner III

Assistant Commissioner for General Education and Curricular ServicesVivienne N. Anderson

Director, Division of Curriculum DevelopmentGordon E. Van Hooft

Chief, Bureau of Secondary Curriculum Development

4

FOREWORD

In 1967, the State Education Department published "Consumer Education -Materials for an Elective Course." This material has since been introducedinto more than 800 of the New York State high schools. As a result of theinterest in Consumer Education in the State and Nation, the Department hasbegun the preparation of a series of modules -- Expanded Programs ofConsumer Education. This module, Housing, is the 17th to be produced.Those already distributed are:

Consumer Issues and ActionConsumer Problems of the PoorThe Consumer and His Health DollarThe Consumer and RecreationEducation and the ConsumerThe Consumer and TransportationThe Consumer Looks at His Automobile InsuranceBeauty Products and the ConsumerTaxes and the ConsumerCredit and the ConsumerCoping With the Problems of a Technological AgeTravel and the ConsumerLaw and the ConsumerFood: Facts and FanciesCars, Cycles, and ConsumersConsumer Concerns

It is expected that another module will be produced in the fieldof Banking.

Nothing touches the lives of the disadvantaged more than the constantstruggle to stretch limited financial resources to meet the increasingcosts of living. These modules are designed in the hope that they willhelp the poor to make better use of their income, as well as with theexpectation that those of higher income will be more understanding oftheir own problems and of the problems of their fellow citizens:

Unlike the original syllabus, where 12 units covering various phasesof Consumer Education were bound together, the modules in Expanded Programsof Consumer Education are being prepared as separate publications to pro-vide greater flexihflity. Each of the modules in the series may be used asa discrete unit or with other units in the series. The modules may bepresented as a semester cr part of a semester course or in conjunction withthe original syllabus which covers such areas as the purchase of food;shelter; appliances; automobiles; and a consideration of credit; moneymanagement; fraud, quackery, and deception; banking and savings; life andhealth insurance; security programs; and consumer law.

It is hoped that the presentation of the modules as separate publica-tions will tend toward flexibility in their use as mini-courses in suchfields as social studies, business education, home economics, industrialarts, agriculture, and other aromas of the curriculum.

The suggestions to the teacher found in "Consumer Education -- Materialsfor an Elective Course," pages 1-4, apply equally to each of these modules.The reaction and suggestions of those using these materials in the fieldwill be helpful to the Department in planning further materials for ConsumerEducation and in making necessary revisions of the material.

Robert Feldman, assistant principal of Central Commercial High School,

New York City, developed the module.

Hillis K. Idleman, associate in secondary curriculum development,prepared the module for publication.

GORDON E. VAN HOOFTDirector, Division ofCurriculum Development

One measure of man's upward movement is his choice of shelter

iv

CONTENTS PAGE

Introduct;on 1

Where Ca'. the Consumer Find Housing?What Are %he Advantages of Living in Larger Urban Communities? .

Are There Problems of Living in Larger Urban Areas? 5

What Are the Advantages and Disadvantages of Rural Living? 6

Who Is Responsible For Meeting the Housing Needs of the Consumer? 9

What Type of Housing Is Available to the Consumer? 13

What Are General Factors To Be Considered Before Choosing a Placeto Live? 14

How Do You Judge a Neighborhood? 15

What Do You Look for in Rental Housing? 17

What Are the Advantages of Renting an Apartment or House? . . . . 23

What Are the Disadvantages of Rentals? 24

How Do you Find a Rental Apartment or House? 25

What Should You Know About the Lease? 27

What Are the Obligations of Tenants and Landlords? 29

Will Rent Control Regulations Apply When You Rent an Apartment? . 31

What Choices Does a Buyer Have When in the Market for a Home? . 32

Should You Buy or Rent a Home? 33

What Factors Are Involved in Choosing a House? . . . 36

How Do You Find the Right House? 40

Should You Buy an Existing House or a New House? 41

How Do You Judge Quality in a House? 43

How Do You Go About Building Your Own Home? 45

What Construction Methods Are Being Used To Build Housing? 48

How Do Most People Finance the Purchase of a Home? 51

Where Can You Obtain Mortgage Loans? 51

What Are the Types of Morbage Loans Available? 53

What Are Some Mortgage Terms You Should Know? 57

What Are the Closing Costs You Can Expect To Pay When You Purchasea House? 61

How Do You Go About Selling a House? 65

How Do You Choose a Broker? 67

What Should You Do If You Decide To Sell the House Yourself? 68

Should You Hire a Lawyer When You Buy Or Sell a House? 70

What Can You Do To Protect Your Home Investment? 71

What Is a Condominium? 73

How Does the Condominium Operate? 75

What Factors Might Be Considered When Shopping for a Condominium? 76

What Is a Housing Cooperative? 77

How Does a Cooperative Operate? 78

How Does the Cooperative Differ From the Condominium? 80

What Are the Homeownership Advantages to Members of Condominiumsand Cooperatives? 81

What Is a Mobile Home? 8?

What Are The Sizes and Types of Mobile Homes? 83

What Is Included in the Basic Price of a Typical Mobile Home? 84

Where Can You Put a Mobile Home? 85

Can You Finance the Purchase of a Mobile Home? 86

What Are the Advantages and Disadvantages of Mobile Homes? 87

v

What Role Does Government Play in Providing Housing? 88

What Role Has the Federal Government Played? 89

What Is New York State Doing in the Field of Housing 92

What Is Being Done To Provide Adequate Housing for the Elderly? . 97

What Should You Know About Buying a Vacation Home? 100

How Can You Protect Yourself When You Buy a Vacation Home? . . . 101

INTRODUCTICN

Housing is one of man's basic needs and its cost represents thesingle largest expense in the budget of most individuals and families. It

is estimated that up to 30 percent of total income is spent by most peopleto meet their shelter needs.

Since the end of World War II,housing to meet the needs of low andmoderate income families has been in short supply. This shortage,according to most authorities, will get worse with each passing year.Former Governor Rockefeller seated in an address, "Probably no problemfacing the state and the nation is more serous than the lack of adequatehousing." Not only does a housing shortage exist for Americans earningmoderate and low incomes; 1970 census figures show that 7 percent of ourpopulation live in substandard housing. Despite the usual accuracy ofcensus figures, housing experts feel the figure is much higher; none claimit is lower.

Since it is apparent a housing crisis exists, a module dealing withhousing should receive priority consideration in a consumer educationcourse. In a few years the students sitting in your classroom will be inthe market for housing. As they grow older their living patterns willchange, and with these changes there will be changes in the nature and

amount of housing space required.

This module is designed to give students a comprehensive pictureof housing and how to get dollar value when in the housing marketplace.Further, the module will acquaint students with the work that government,Federal, state and local, is doing in the housing field and how they andtheir families can benefit from government help.

To insure pupil understanding, the teacher should feel free to expandand supplement units in the module. The teacher should become familiarwith housing problems in the community, and these problems should becomepart of the classroom discussion. It is also important for the teacher tokeep abreast of economic conditions, as these will have an effect on thekinds of housing available and its cost. For example, as this is beingwritten, mortgage money is very scarce,mortgage interest rates are very high,and construction costs are skyrocketing. All these factors are making itvery difficult for people to buy or sell houses. These economic conditionsare also having an adverse affect on apartment rentals and cooperative andcondominium sales. Should economic conditions change,the teacher must beready to make adjustments in the module and state the facts as they existwhen the module is being taught.

As a result of using the module, class discussion, and other activitiesstudents should

. become familiar with the kinds of housing available

. learn how to go about meeting their housing needs

1 9

. be able to make a choice of the kind of housing best suited tomeet their needs

. learn about mortgages and how you go about obtaining mortgage loans

. recognize the impact of economic conditions on the housing market

. become familial. with procedures to follow when selling a house

. learn about the role of government in developing the housing needsof the community

. become familiar with the operation of cooperative and condominiumhousing

. learn about mobile homes

. make judgments about housing based upon sound information andtheir own value system.

2

10

SUGGESTED PUPIL AND

UNDERSTANDING TEACHER ACTIVITIES

WHERE CAN THE CONSUMERFIND HOUSING?

. Housing is availablein limited supply inareas including

- large cities

- surburbancommunities

- small cities, townsand villages

- rural areas

. Point out that anurban area can be asmall town as wellas a large city. The

U.S. Census Bureauclassifies each placewith 2,500 populationor more as an urban

area.

. Use a map of thestate to show thelocation of various

large cities,surburban areas ofthe cities, smallercities and towns, and

rural areas. Discussthe effect of urbansprawl on rural areas.

. Census figures showthe percentage ofpeople living intowns of less than50,000 has increasedby 50 percent since1920. Ask students

for their opinion asto why the smalltowns, not the largeones, are growing.

. In schools located insmaller urban areaspoll the class to findout how many studentslive in a rural area.

Have them discuss theadvantages and dis-advantages of ruralliving. Set up adebate and havestudents who live inthe town debate the

3

11

SOURCE

. Weaver, Robert C.,"The Urban Complex,"Doubleday and Company.New York, 1964, pp. 1 -4

. In a magazine,"Challenge" publishedby the U.S. Departmentof Housing and UrbanDevelopment, November,1973, it is reported

that "Our intensiveand consumptive use ofland is expected toescalate dramaticallyin the next 27"years...The equivalent ofevery school, pipeline,power-plant, officebuilding, airport,shopping center,factory, home and high-way that has been builtduring our first 200years may have to bematched to accommodatepopulation and marketdemands projected forthe year 2000... Someconservative projectionsfor land use...are:(1) 10.7 million acres

may be consumed byurban sprawl.., (2) 3.5million acres may bepaged over for highwaysand airports... (4)five million acres maybe lost to agriculturefor public facilities,

SUGGESTED PUPIL ANDUNDERSTANDING TEACHER ACTIVITIES SOURCE

WHAT ARE THE ADVANTAGESOF LIVING IN LARGERURBAN COMMUNITIES?

. Mass transitfacilities

. The proximity ofschools, shoppingareas, houses ofworship, and parks

. Public and utilityservices are readilyavailable

students who live inthe rural areas aboutthe relative meritsof urban versusrural living.

. Have students prepare .

a list of mass transitfacilities in theircommunity. Have theminclude, in the list-ing, the present cost

of using the facilitiesand the prospects ofthe costs remaining atthe present levelduring the comingmonths.

second homedevelopments, andwaste controlprojects."

. Have students completethe chart below:Place student lives:Facility Distance

From Home

School

ChurchShopping areaFire hydrantFirehousePolice stationPark

Movie nouseTheatreMuseum

. What conclusions can bedrawn from this study?

. What problems arecreated if public andutility services arenot available?

4

12

Wilson, James Q.,"The MetropolitanEnigma," Doubledayand Company, Inc.,New York, 1970

UNDERSTANDING

Easy access to

cultural andentertainmentfacilities

ARE THERE PROBLEMSOF LIVING IN LARGERURBAN AREAS?

. The problems of urban

living include

- traffic congestion

- water, air andnoise pollutio,

- increasing crimerates

ACHi ;.1

dcentvrt

0'

. 'that f

shoull wrlf

ilst ryf 1(.14,11 1,:f-

urtan

. Have students who live .

in larger urban areasdiscuLs the effect oftraf)i, congestionon their travelingto and from school.

. Have students check .

with local governmentagencies to determineantipollution lawsthat are in effect inthe community. From

their own obse-vationhow effective is theenforcement mechanism?

. It should be pointedout that crime insurburban areas andsmaller cities,

and villages, is onthe increase as well.

5

Meyer, Cain and Wohl,"The Urban Transporta-tion Problem," HarvardUniversity Press, 1965.Chapters J, 4 and 5

The late PresidentJohnson in his NaturalBeauty Message toCongress in February,1965 said, "Theuncontrolled wasteproducts of ourtechnology are menacingthe world we live in,our enjoyment, andour health."

. In an article, "UrbanCrime," Prof. MarvinE. Wolfgang of theUniversity ofPennsylvania citedpolice statistics thatindicate urban areashave higher crimerates than rural areasand the rate of seriouscrimes per 100,000population appears toincrease with the sizeof the community.


- decline of masstransit systems

- deterioration ofhousing

WHAT ARE THE ADVANTAGESAND DISADVANTAGES OFRURAL LIVING?

. The advantages of rural

living include

. Where a community hasa mess transit system,

.e students discuss.giber of service

ahilable and what canb done to improve theexisting service. Drafta letter with suggestionsfar improvement and mail1t to the local transitauthority. Considerthat improvements willhave to be paid foreither by higher faresor taxes.

. Where feasible, have . The Mayor's Rentstudents tour inner Control Committee ofcity areas to observe New York City statedthe general condition the following in itsof the housing. What report to the Mayor ofcauses housing in such New York City:areas to deteriorate - The total rentalso fast? What effect housing inventorydo tax patterns have in New York City ison such deterioration? less than in 1969What steps are cities - The number of build-taking to halt the ings demolished orpattern of deteriora- abandoned is increas-tion? What further ing at an acceleratingsteps should be taken? rate.

- The number of housingunits classified assubstandard hasincreased....

- New residential

construction, bothp -ivite and public,;les declined to thelowest level sinceWorld War II.

6

UNDERSTANDING

- possibility of lessair, water andnoise pollution

psychicsatisfaction

- lower crime rates

- visual beauty

SUGGESTED PUPIL ANDTEACHER ACTIVITIES SOURCE

. Ask students who live . In a magazine article,in rural areas to "The Importance of

check local streams, Human Environments"

rivers, and lakes for it is pointed out thatsigns of pollution. research has shown

that excess noise can

Where a school services affect the nervous,urban and rural areas, endocrine, andconduct the following reproductive systems.

experiment. Have a There is also a beliefstudent who lives in a that it may damagerural area use a tape unborn children.

recorder to tape the Forum Magazine, Fall/sounds heard between Winter, 1974the period 6:00 to (::05P.M. Have a student wholives in an urban areado the same thing.Compare the tapes anddiscuss the levels ofnoise heard and theireffect on everydayliving.

. One of the hardestthings to describe isthe feeling of prideand joy some people feelin owning a piece ofof land where theyhave elbow room to doas they please withoutneighbor; peering atthem. Ask pupils wholive or have visited inrural areas to describethis feeling.

. Have students checkwith the local sheriff'soffice for informationon crime rate figuresin urban areas andrural areas serviced bythe sheriff's office.

. What is the worth of aLeautiful sunset or sunrisein the country? Are suchmanifestations of natureas apparent in the city?

7

iji

SUGGESTED PUPIL ANDUNDERSTANDING TEACHER ACTIVITIES

- the cost of livingis usually lower

- Feeling of communitypride

. The disadvantages ofrural living include

lower salary

scales and grossincome

fewer educationalinstitutions

no mass transitsystem available

increased cost ofcommuting by auto-mobile because of thehigher cost of fuel.

. Why are the costs ofservices lower in ruralareas? Are there someservices that costmore?

. Why is it easier todevelop a feeling ofcommunity pride in arural area?

. Is it possible that asense of communitypride develops out ofa need for each tohelp the other whichmight not be true inthe city?

. What would some ofthe reasons be forlower salary scalesin rural areas?Have your studentsattempt to answerthis question.

. Have students who livein rural areas indicatethe distance they musttravel to and fromschool every day.

. Discuss the impact ofthe energy crisis andthe resulting highcost of gasoline onthe rural commuter.

Do students feel the

8

SOURCE

. Many rural dwellersenjoy a sense ofcommunity solidaritynot felt by urbandwellers. While eachlives a free life, intime of emergency(fire, illness, death)they usually find anout-pouring of genuineinterest and help fromneighbors. Perhapsbecause they lackurban services, they

feel more strongly theneed to help each otherin times of stress.

. Price, Irving, "BuyingCountry Property,"Harper and Row,New York, 1971

. In his book "BuyingCountry Property,"Mr. Irving Price pointsout the cost of livingin rural areas is lessthan in urban areasbut so are the salaryscales.

. According to a reportby Dr. Dorothy Newman,senior associate ofthe Washington Centerfor MetropolitanStuaies, rural families

SUGGESTED PUPIL AND


WHO IS RESPONSIBLE FORMEETING THE HOUSINGNEEDS OF THE CONSUMER?

. The Federal governmentstate government, an''

many local governmentsbuild public projectsand offer financialassistance to privateindustry to buildhousing.

- Wherever government,offers financialassistance thebuilder mustconform to rulesand regulationsdealing with therenting or selling

of housing.

high cost of gasolineis justified? Whatalternatives to theautomobile night theysuggest the ruralcommuter use?

, . Have students checkin the community todetermine whichhousing was builtwith public funds.Also check todetermine which newhousing in thecommunity is beingbuilt with publicfunds.

. Write to the variousageicies listed in the

Source column andobtE'n informationas :0 ;low you may

qualify for housingin your communitybuilt with publicfunds.

- Public funds are used . Make a comparison of

to build rental and rental costs in

cooperative apartments. housing built withpublic funds andwith private funds.

. Compare the cost ofpurchasing a privatelybuilt cooperative with

9

1'7

SOURCE

earning less than$5,000 a year spendas much as 25 to 40percent of theirincomes on rs,

primarily to buy gasto get to and fromwork. She furtherreports that whileonly half the poorfamilies have carsthey use them almostentirely forwork-related purposes.

. Write to the U.S.Department and Housingand Urban Developmentfor listings offederally assistedhousing.

. Write to the New YorkState Division ofHousing and CommunityRenewal, Two WorldTrade Center, New York,N.Y. for a listing ofstate-assisted housing.

. Write to New York CityHousing and DevelopmentAdministration 100 GoldStreet, New York, N.Y.10038 for a listing ofcity-assisted housing.

. Write to HousingAuthority in yourcommunity for listingsof housing run by theauthority.


- Income limits arein effect in allpublic housingand in housingbuilt by privateindustry withgovernmentassistance.

- Families earning morethan the income limits:re not eligible forpublic housing orgovernment-assistedprivate housing.

- If earnings increasewhile living in apublicly assistedproject and familyincome exceeds theincome limit for theapartment, the family

is required to pay asurcharge.

- A surcharge is acharge above andbeyond your annualrent or carryingcharges.

a publicly assistedcooperative.

. Check with a localpublic housing projectbuilt with governmentassistance for theirmonthly rental orcarrying charges.Based on thisinformation calculatethe income limits fora family of threepersons; a family offour persons.

SOURCE

. Developments builtunder the Mitchell-Lama(Limited ProfitHousing Companies)Law of New York Staterestrict gross annualincome for a family ofthree persons toamaximum of six timesthe annual rent orcarrying charges incooperatives. For afamily of four or morepersons the limit isseven times the annualrent or carryingcharges.

. Contact the local . In the Redevelopmenthousing authority and Companies program thefind out what procedures formula is eight timesare in effect to check the annual rent orthe income of a family carrying charges.interested in livingin publicly assisted . For more detail onhousing. incohe limits write to

the agencies listed onpage 9.

. Invite a representa-tive of the localhousing authority tovisit the class todisciss the housingbeing provided by thecommunity. Ask fordetails on eligibilityand her to apply forhousing in the publicsector.

. Write to the localhousing authority andobtain information on

the formula used todetermine a surcharge.

10

18

. Investigate steps yourcommunity may havetaken to sell run-downhousing for a nominalsum (in some cases aslow as $1) in returnfor a pledge of thenew owner to fix itup and restore it tothe tax rolls.

UNDERSTANDING

- Surcharge paymentsare due once a yearand can be paid in alump sum or inmonthly installments.

- When income limitsare exceeded inpublic projects thefamily may berequired to move.

SUGGES1ED PUPIL ANDTEACHER ACTIVITIES

Set up a number ofproblems and havestudents calculatethe surcharge ineach case.

. Have students checkwtth the local housingauthority for itspolicy on familieswhose income exceedsthe legal limit in a

public project.

. Private industry providesmost of the consumer'shousing needs.

. Housing built it the .

private sector includeshigh-rise build'ngs,walk-up apartmentbuildings,gardenapartments, cooper-atives, condominiumand one-and-two familyprivate homes.

. Private homes canbe built as a singleunit, (detached),semi-detached, or asan attached unit.

SOURCE

. In the November, 1973Issue of the HUD Chal-lenge, a magazinepublished by the U.S.Department of Housingand Urban Developmentit was reported that ofthe 2,378,500 housingstarts made in 19722,039,700 were non-subsidized.

Explain the differ-ence between the high-rise apartment and thewalk-up apartment.Also indicate how agarden apartment differsfrom an ordinaryapartment building.Discuss briefly cooper-atives, condominiums, andprivate homes,since theywill be covered in detaillater in the module.

. Explain the differ-ence between a detachedand a semi-detached unit;between a semi-detachedunit and an attachedunit. Discuss theadvantages of each type,and have students statetheir preference andthe reasons for theirchoice.

Our choice of shelter reflects our values in life.

20

SUGGESTED PUPIL AND


WHAT TYPE OF HOUSING ISAVAILABLE TO THECONSUMER?

. The choices open tothe consumer include

- rental apartments

- house rentals

- purchase of anexisting home

- purchase of anew house

- building a home

. Note to the teacher:At this point youmight want to taketime to discuss thehousing crisis thatexists. At thiswriting the buildingof public projectsand publiclyassisted privatehousing is at avirtual halt. Further,housing starts in theprivate sector areexpected to be below2 million for theyear 1974 (see figurefor 1972 in sourcecolumn at top of page).Have students discussthe housing crisis, theeffect on their future,and what they wouldlike to see done toimprove the situation.

SOURCE

. For source informationobtain a copy of thepamphlet, "Housing: aNationwide Crisis" byMaxwell S. Stewart.It can be obtainedfrom The Public AffairsCommittee, 381 Park Ave.,South, New York 10016.It is referred to asPublic Affairs PamphletNo. 495; the cost is35 cents.In the pamphletMr. Stewart indicatesthe number of new housesrequired for the countrythrough 1978 has beenset at 26 million, ofwhich 6 million shouldbe for low-income andmoderate-income families.The need in the NewYork City metropolitanarea is estimated at200,000 units a yearfor the next 30 years;only about 46,000 ayear were built in thefive years 1966 to 1970.

. Ask students to check . "Money Management - Your

the real estate Housing Dollar," House-

section of the local hold Finance Corporation,

newspaper. Have them Prudential Plaza,

prepare sample listings Chicago, Illinois, 60601

for each type ofliving accomodation . Film: At Home-2001.

advertised. For each Available from Modern

listing include the Talking Picture Service

cost. What conclusions Inc., 927 19th St.,

can be drawn as to the N.W., Washington, D.C.

cost of the different 20006. Free loan, 30

kinds of housing minutes, color.

available? (continued)

13

UNDERSTANDING

buying a condominium

- purchasing a cooper-ative apartment

buying a mobilehome

SUGGESTED PUPIL ANDTEACHER ACTIVITIES

. Write to a dealer ofmobile homes and obtainliterature. Comparethe physical layout ofthe mobile home withthe layout of yourliving quarters.Determine studentfeelings about thepossibility of theirliving in a mobile home.

. Personal consideration .

is an important factorin making a choiceof housing.

WHAT ARE GENERAL FACTORSTO BE CONSIDERED BEFORECHOOSING A PLACE TO LIVE?

. Monetary considerationsare a prime factor toconsider when makinga choice of shelter.

. How much to spendwould be dependentupon yearly income,age of head of house-hold, cash reserves,and future financialprospects.

Have students indicatethe type of housingthey would prefer.What are the reasonsbehind their choice?

. Point out to studentsthe following generalrules as to how muchshould be spent forhousing:- A family should

spend no more thantwo to two and one-half times its totalannual income onhousing.

- Housing expensesshould be limited

to one week's payout of each month'ssalary.

14

22._

SOURCE

Presents possibilitiesof housing in the 21stcentury. Can be usedto stimulate discussionon the types of housingavailable today.

. In a pamphlet, "Selectingand Financing a Home,"published by the U.S.Department of Agriculture,it is pointed out thatto allow a flat percentof income for housing.does not fit every familybecause of differencesin income and age of thehead of the household.A survey made by thedepartment shows spend-ing for housing varies,as indicated on thechart below.

SUGGESTED PUPIL AND

UNDERSTANPING TEACHER ACTIVITIES

. Selecting a locationto satisfy housingneeds is consideredby many to be thesingle most importantconsideration.

HOW DO YOU JUDGE ANEIGHBORHOOD?

. In picking a neighbor-hood to live thelocation should bedesirable now andit should lookpromising for thefuture.

(If inflation continuesat a double digit ratesome economists feelthat the amountspent for housingshould be reducedto two times total

annual income.)

Before going intospecific locationfactors to be con -

sidered, have the

students list whatthey consider to beof prime importancein selecting a placeto live.

SOURCE

Income after TaxesUnder Over$5000 $5000

Percent PercentAge ofheadUnder 35 26 22

35 to 44 26 20

45 to 54 32 21

55 and over 39 15

. Discuss how prospects forthe future of a neighbor-hood can be checked inadvance. i.e.: prospectsfor changes in zoningregulations, availabilityof land for futuredevelopment, etc.

. Specific locationfactors to be consideredinclude the accessibilityof

- schools

- houses of worship

- shopping areas

- availability oftransportation

. Have each student . "Facts You Should Knowprepare a chart showing About Buying cr Buildingthe location of all a Home," Better Businessitems listed and the Bureau, Educational

distance from his Division, Boston, Mass.

home. Ask studentsto compare chartsto determine whichstudents live inwhat may be consider-

ed ideal locations.

15

23

UNDERSTANDING

- hospitals

- parks and playgrounds

- recreation andentertainmentfacilities

- employment centers.

. Neighborhoodcharacteristics tobe considered include

- general conditionand appearance ofneighborhood

- condition ofadjoining housing

- condition of streets,include drainageand street surfacing

- traffic conditions

- presence of excessivesmoke, odors, or fumes.


. Survey local com-munities to determinetransportation coststo the nearest centersof employment. Havestudents check withtheir families tofind out how commutingcosts compare to otherexpenses in the familybudget.

SOURCE

. Cramer, Richard D.,"The Choice is Yours,"Consumers All, TheYearbook of Agricul-ture, US Departmentof Agriculture,Washington, D.C., 1965.This book may be avail-able from your localCongressman, or willbe found in the locallibrary.

. "Consumer Education,Materials for anElective Course,"Available from theState EducationDepartment, TheUniversity of the Stateof New York.

. Using a rating systemof 1 to 5 (5 beingthe highest rating)have students ratetheir neighborhood.The rating sheet shouldalso include monthlyrental or carryingcharges. Check to seeif there is a correlationbetween what is beingpaid for housing andthe condition of theneighborhood,

. Contact the localEnvironmental ProtectionAgency for informationon air quality in yourcommunity.

In choosing a neighborhoodconsideration has to begiven to public utilityservices provided. Theseinclude

24


- fire and policeprotection

garbage and rubbishremoval schedules

- snow clearance

- utility rates

- zoning regulation.

WHAT DO YOU LOOK FOR INRENTAL HOUSING?

. Consumers can satisfytheir housing needsby renting an apart-ment or a house.

. Rentals may be

available fullyor partiallyfurnished.

. It should be made clearthat the cost of utilitieswill vary depending onthe company servicingyour community. Havestucents oApare theutility rates chargedin their community withthe utility rates chargedin neighboring communities

and in the larger citiesin the state.

. Emphasize that zoningregulations are asimportant to theapartment dweller asthey are to the personliving in his ownhouse. Have studentsobtain from the localhousing board thezoning regulations fortheir neighborhood.Have students comparezoning regulations todetermine whichneighborhoods are themost desirable.

SOURCE

. In a magazine article,"The Burger That'sEating New York" byMs. Mimi Sheraton,New York magazine,August 19, 1974, theauthor shows howzoning regulationsare important tothe apartment housedweller.

. "Checklist for ApartmentHunters," ChangingTimes, January 1964,pp. 15-16

"The Smart Way to Pickan Apartment," ChangingTimes, October, 1964,pp. 27-31

. Compare costs of fully .

furnished apartmentsand houses with thosethat are partially

17

UNDERSTANDING

. Most rentals containno furnishings.

. After monetaryconsiderations, primethought is givento location.

. Three areas to considerwhen looking for arental are outside thebuilding or house,inside the apartmentbuilding and inside theapartment or house.

. A check of the outsideof the building orhouse should include

- character of theneighborhood

- convenience oflocation

- condition ofbuilding or house

- exposure of rooms

- safety conditionsin the neighborhood


furnished or notfurnished at all.Obtain informationfrom classified adsin the real estatesection of the localnewspaper.

. Have students preparea list of those thingsthat could be used tojudge the character ofa neighborhood.

. Ask students toappraise the conditionof the building orhouse they live in.Have them indicate thecriteria used.

SOURCE

. "If you Have to RentOut Your House,"Changing Times, Feb.,1974, pages 51-52

. See pages 15-17 fordiscussion on how tochoose the bestlocation

. Levy, Feldman,

Sasserath, "Consumerin ti.e Marketplace,"

Pitman PublishingCompany, New York,1970. pp. 228-229

. Wilhelm, Heimerl,Jelley,"Consumer

Economics," McGraw-Hill

Book Co., pp. 338-340

. Discuss the importanceof exposure of rooms,and the relation tocomfort. i.e.; un-desirability of bedroomshaving a northern exposure.

. How might safetyconditions in aneighborhood begauged? Discuss

18

2

. An audit of crime inNew York City showedcrime to be under-reported as follows:


- privacy offered bylocation of thebuilding

- play areas for children

- cleanliness of theneighborhood

- parking facilities

- sewage facilities.

. A check of the insideof an apartment build-ing should reveal

- well lightedentrances andhallways

why police statistics

may not give anaccurate pictureof crime rate in acommunity?

. Discuss the impor-tance of havingparking facilities,especially in largercities. Determine

the average cost ofparking in yourcommunit,. Debatethe question,"Should local govern-ment provide low costparking for itscitizens?"

SOURCE

Auto theft and rapeunder-reported by22 percent, larcenyby 54 percent, robbery90 percent andburglary 96 percent.Indications are thatunder-reporting is thecase in most communi-

ties in the country.From "The Metropolitan

Enigma" by James Q.Wilson

. A recent law passed inNew York City makesit mandatory forbuilders to set asidespace to provide fortenant parking.

. Why would it be a goodidea to look over theneighborhood where youare considering rentingduring a heavy rainstorm?

. Point out that goodlighting can be adeterent to crime.

19

UNDERSTANDING

- cleanliness ofhallways

- location offire escapes

- laundry roomfacilities

- conveniences suchas elevators andincinerators

- security locks onentrance doors.

SUGGESTED PUPIL AND

TEACHER ACTIVITIES SOURCE

. Emphasize that fire . An article in the

escapes are not usually May 27, 1974 issue

found in high-rise of New York magazine

apartment buildings reported on the

and this could prove dangers of fires in

to be a problem during high-rise buildings.

a fire. Indicate The article can be a

that fire escapes are source of information

not provided because for a discussion on

such structures are the problems of fire

fire resistant. and high-rise develop-

This doesn't mean ments.

there won't be fires;it means the fire,in most cases, willnot spread through-out the building.

. Why are laundry roomfacilities importantin rental situations?Discuss the questionof the location ofthe laundry facilitiesand why this could bea factor in makingthe decision to rent.(Note: This questioncould be related tosafety since a goodmany crimes occuringin an apartment build-ings take place inthe laundry room.)

. Students who live inapartment buildingswhere there are securitylocks on entrance doorsmight check to see ifother keys will open thedoor. What conclusionsmay be drawn from thisexperiment?

20

SUGGESTED PUPIL AND


. A check of the insideof the apartment orhouse should include

- conditions of walls,floor, windows,ceilings, and doors

- location and numberof electricaloutlets

- cross ventilationin rooms

- adequate current tomeet the needs ofmodern homeappliances

- ample storage areaand closets

. Have students checkeach room in theirhome for the numberof electrical outlets.Is the number suffi-cient? What do theyconsider to be anample number ofelectrical outletsin different typesof rooms?

. Discuss how crossventilation can helpkeep down electricalcosts during thesummer months andadd to comfort.

. Invite a representa-tive of the localpower company tovisit the class todiscuss the powerneeds of the manyhigh-wattage electri-

cal appliances thatare being used inhomes today. As aresult of the infor-mation provided duringthe talk have studentscheck the appliancesused in their homeagainst the amperageavailable.

. Discuss how muchstorage space isconsidered to hesufficient in ahome. Have students

SOURCE

. "Money Management -Your Shelter Dollar."Money ManagementInstitute, HouseholdFinanc! Corp.

Prudential Plaza,Chicago, Illinois, 606060601

. A check of the fusebox in a home orapartments will showthe amperage availablein the home.

. A six foot rod in acloset is consideredsatisfactory; a sevenfoot rod would indicatea more than adequate

SUGGESTED PUPIL AND


measure closets andstorage space in theirhome to see if thespace alloted issufficient.

- condition of heating . Invite a trade teacherand plumbing or industrial arts

facilities teache' to visit theclass to disLuss 'hat

to look for to checkthe adequacy of heatingand plumbing in ahouse or apartment.

- amount of work spacein kitchen

- condition of windows,

screens, blinds andshades

- presence of amaster TV antennaand/or cabletelevision

. Point out that inchecking the amount ofwork space you musttake into account thekinds of kitchenappliances you possessand whether or notthey require storingon a counter top.

. Point out that wherea master TV antennais present theremay be an additionalcharge to be hookedinto the masterantenna.

Why is a master TVantenna or cable TVimportant in outlyingcommuni ties?

- type of and condition . Rental apartments andof appliances houses usually include,

provided. as part of the rental,the standard appliancesfound in most homes:,

stove, refrigerator andsink. It should bepointed out, however

22

30

SOURCE

supply of closetspace in a room.

For information oncable TV, write or

contact the localcompany providingthe service. Infor-mation on the costand extra benefits tothe user of cable TVcan be obtained fromthe company and passedon to the students.


WHAT ARE THE ADVANTAGESOF RENTING AN APARTMENTOR HOUSE?

. Rentals require no

capital outlay.

People who rent havegreater mobility ifthere are change.; inincome or desires.

. Housing expenses inrentals are generallyfixed,making budgetingeasier.

. All obligationsare over when thelease expires,

that in some citiesheving rent controllaws, regulations permita landlord to chargea specified sum ofmoney when a newappliance is placedin a dwelling. Theextra sum is usuallypaid with the renton a monthly basis.

. Discuss how a tightmoney market andhigh interest costsare putting theprices of homes outof reach of manyfamilies. Ask alocal banker orreal estate brokerto visit the classto discuss rentingversus buying underpresent marketconditions.

. Discuss with studentstheir feelings aboutthe need for mobilityin their lives. Poll

the class to findout how many movestheir families havemade in the pastfive years.

21.

SOURCE

. The National Associa-tion of Home Buildersreported the averagecost of a new househas spiraled nearly20 percent during thepast year.

. On the averageAmericans move every

five years.

UNDERSTANDING

. You usually havefreedom fromresponsibilityfor repairs andmaintenance.

WHAT ARE THE DISADVANTAGES

OF RENTALS?

. No equity in theproperty

. Instability of rent

. Cost of improvementsto the property arelost when you move.

. No pride in ownership

. The price and qualityis subject to housing

availability.


. Have students who livein their own homereport to the classon the amount of timespent on repairs andmaintenance in thehome.

. Explain what is meantby equity. Indicate

the matter of equitywill be discussedfurther in the sec-tion dealing withbuying a home.

. Discuss the impact ofthe increasing costof fuel and other costson the rent structureof apartments notsubject to rent controllaws.

. Discuss how pride ofownership is a vitalfactor when appearanceof a property isconcerned.

. Discuss the law ofsupply and demandand its impact onrent. Point outthat unless currenttrends change, the

future will bringa severe shortageof rental housingand higher rents.

24

32

SOURCE

. One to two percentc the cost of adome must be budgetedfor maintenance costs.

. "Consumer EducationMaterials for anElective Course,"The State EducationDepartment, TheUniversity of theState of New York,Page 70

. In a report preparedby The New York CityRand Institute,it ispointed out therehas been a net growthin the number ofhouseholds, despitethe lack of populationgrowth. Couple thiswith a decline of newconstruction and themassive withdrawal ofhousing from the activeinventory (especially

UNDERSTANDING

. Renting may be moreexpensive over aperiod of yearsthan owning a home.

171


(We can move from

this old dump anytime we wont.

PIII

0 11

rff

...

Yes but see whatwe have saved inten years!

HOW DO YOU FIND A RENTALAPARTMENT OR HOUSE?

2533

in larger urban areas)and you have theprimary reasons for acritical housingshortage.

. Assuming a house forsale and a rentalhouse or apartmenthave an equivalentamount of space and/orother yardsticks ofvalue, the chart belowshows annual costs forthe first ten years.(Equivalent figureshave been used tomake the figuresvalid.)

Year Annual

Rent

Annual

Owner's Costs

1 $6200 $69602 6448 4965

3 6706 43034 6974 39755 7253 37806 7543 36527 7845 3561

8 8159 34959 8485 3444

10 8824 3404

Over a 10-year period,savings on owningversus renting cometo $32,898, or anaverage of $3290 ayear.

From a column bySylvia Porter in theNew York Post, June26, 1974

UNDERSTANDING

. Classifiedadvertisements

. Family members,relatives, and friends

. Real estate agents

. Public agencies


. Use an opaqueprojector to goover the rentalsin the classified

section of thelocal newspaper.Have students indicatewhich apartments appearto be suitable for asingle person; for anewly married couple.A follow-up to thisexercise may involvesending students tocheck on the rentalso they can be ratedaccording to the itemscovered on pages 14through 22 of thismodule.

. Ask each student inclass to check withfamily and friends forleads on apartmentor house rentals.

How many leads weregenerated by the classas a whole? Checkselected leads againstleads found in theclassified section.Can any conclusionsbe drawn from thisexercise?

. Invite a real estate .

agent to class todiscuss how the realestate agent operateswith regard to rentals.Be sure he covers thefees charged for hisservices and who paysthe fees.

. Point out that public .

agencies usually dealwith housing forlow-and-moderate-incomefamilies.

26

34

SOURCE

Levy, Feldman,Sasserath, "Consumerin the Marketplace,"

Pitman PublishingCompany, New York,page 231

"The Family RealEstate Advisor," abooklet published bySimon and Schuster,Inc., 630 Fifth Avenue,New York, New York10020

For public rentalhousing in New YorkCity, write to New YorkCity Housing Authority,


WHAT SHOULD YOU KNOWABOUT THE LEASE?

. A lease is acontract betweenthe tenant andthe landlord.

. Check with localagencies for infor-mation on eligibilityfor the housingavailable.

SOURCE

250 Broadway, NewYork, N.Y. 10007

. Check local director-ies for the housingauthority located in

your community.

. Obtain a copy of a . Kuchler, Frances,standard lease form "Landlord and Tenant,"and go over each item Rev., 3rd Edition,with the class. Ask Oceana Publications,students who live in New York, 1960rentals to check thelease for any unusual . Wilhelm, Heimerl,provision in the lease. and Jelley, "Consumer

. A lease specifies the . S'cure "A guide forterms both parties agree Ranters." Note into when a dwelling is October issue therented. 10 points regarding

the landlord's rightsin a typical lease.

Ask pupils to studytheir families' leasesto see how many oftheir families'leases contain these"danger sign clauses."

. Using an actual leasecompare the itemscovered in the leasewith the pointscovered in theSuggested LearningColumn.

. The lease is a legaldocument and mustbe examined carefullybefore being signed.

. Both landlord andtenants are bound bythe provisions of alease.

. Information found ina lease shouldinclude

- names of tenantand landlord

- period of time forwhich lease iseffective

- description ofpremises to be leased

- right of landlordto inspect apartmentor house

27

Economics, McGraw-Hill, New York, 1966pp. 322, 334, 355

. Wilson and Eyster,"Consumer Economics,"South-WesternPublishing, 1966

. "A Guide for Renters,"Consumer Reports,October, November,and December 1974issues

SUGGESTED PUPIL AND


amount of rent tobe paid

- date rent is due

- who is responsiblefor maintaining thepremises anddecoratiNg the

apartment

- amount of securityrequired

- details concerningsubletting

- provisions concerningthe keeping of pets

. Discuss why a landlordusually requir?s the

tenant to leave atleast a one-monthsecurity deposit whena lease is signed.Be sure to indicatewhat happens to thesecurity when thetenant decides tomove.

. Explain the meaningof subletting.

. Many leases prohibittenants from keep-ing pets in thehouse.

SOURCE

. Landlords vs. tenants:Rules of the game arechanging; ChangingTimes, May 1972

. There are a number ofcourt decisions onrecord upholding theright of the landlordto prohibit the keepingof pets in rentalapartments and houses.

- provisions concerning . The cost of gas is usually

utilities. included in the rental

charge for an apartment.Some apartment rentsinclude the cost of bothgas and electricity.Discuss how much of asavings can be realizedwhen both gas and electricare included in therental charges.

Make it clear that alease for a house rentalshould not be signed untilit is cle,rly indicated

28


WHAT CAUTIONS SHOULDRENTERS TAKE?

. Do not leave blankspaces in a lease.

. The tenant should havean exact copy of thelease.

. All changes shouldbe written andinitialed by bothparties to the lease.

WHAT ARE THE OBLIGATIONSOF TENANTS AND LANDLORDS?

. Both tenants andlandlords have moraland legal obligationsto abide by theterms of a lease.

. In most communitiesthe law requirestenants to

pay rent promptly

- tell the landlordexactly who livesin the apartment

who is responsiblefor heating andelectric bills.

. Make it clear that thelease is a form ofcontract and all therules that should befollowed when enteringinto a contract applyto the lease.

. Give examples of whatcould happen if blank

soaces are left ona lease next to theamount of rent, theapartment number, orthe day that the rentis due.

. Do leases seem to protectthe owners more than thetenants? If so, whatfactors may have ledto the development ofmodern standard leases?

. Explain the kind ofaction the landlordcan take if thetenant does not liveup to his legalobligations, i.e.,eviction.

. Point out there arehealth laws in effectlimiting the numberof people who maylive in a given area.

29

. "A Tenants' Primer,"New York Magazine,March, 1971

. New York City law, forexample, forbids sleep-ing in the kitchen orthe bathroom.

UNDERSTANDING

- keep the apartmentclean

- keep halls clear

*- refrain from usingprops to keep thecorridor doors openor shut


. Have students cneckthe local housingstatutes for lawspertaining to thetenant's obligations

. It should be madeclear that the purposeof this law is toinsure tenant safetyin case of fire.

- many leases require .

prior approval beforesublet*ing ispermit*ed

- some leases restrict .

occupancy to members of

one family group

- repair damage causedby the tenant.

. A landlord is required to

- provide heat andhot water

- provide janitorialservice if thebuilding is largerthan a certain size

Why do some leasesrestrict occupancy tothe original lessee?

Why do some leasesrestrict occupancy tomembers of one family?

. Find out what thelaw requires of thelandlord with regardto the hours heatand hot water mustbe provided, alsothe temperature thatmust be maintained.Is the landlordentitled to collectrent even if heat orhot water are notprovided due to abreakdown?

. Check with the localDepartment of Healthto determine whatlaws apply tolandlords.

30

:a8

SOURCE

. "You and Your Landlord,"a pamphlet availablefrom the New York CityHousing Authority,250 Broadway, New YorkCity.

. In New York City hotwater must be at least120 degrees and providedbetween the hours of6 a.m. to midnight; fromOctober 1 through May31; building temperaturemust be at least 68degrees between 6 a.m.and 10 p.m., and 55degrees between 10 p.m.and 6 a.m.

. In a study conducted bythe New York City RandInstitute it is reportedthat in many instancesrelations between land-lord:. and tenants have

SUGGESTED PUPIL AND


provide garbagefacilities

- paint the apartmentat specified intervals

- refrain from in-terfering with thetenant's right ofpossession exceptto protect hisproperty.

. Failure of the landlordto live up to his legalobligations may resultin the tenart beinggranted a rentreduction.

WILL RENT CONTROLREGULATIONS APPLY WHENYOU RENT AN APARTMENT?

. Of the total supply ofhousing units in thestate approximately1.2 million units comeunder rent control

regulations.

The bulk of rentcontrolled units, 1.1million units arelocated in New YorkCity; the balance arelocated in 101murcipalities through-out the state.

Under terms of theVacancy DecontrolLaw enacted in 1971,any rent controlledapartment which

. Does the right toprotect his propertyentitle the landlordto enter the tenant'spremises even whenthe tenant is away?

Invite a member ofthe local housingauthority to visitthe class to provideinformation on whatthe law expects oflandlords and thepenalties, to thelandlord, for notfulfilling his legal

obligations.

. Check with the localhousing authority tofind out whetheryour community hasrent control regulat-ions in effect.

. Indicate that to

prevent landlordsfrom harassingtenants intovacating their

31

SOURCE

deteriorated to thepoint of open hostility.A major reason for thiscomes about because oflarge rent increaseswhere there is no rentcontrol. Where rentcontrol is in effect,the principal tenantcomplaint is that thelandlord has reducedmaintenance or buildingservices, or has failedto remedy housing-codeviolations... The studyfurther states thereis evidence that tenantsoften create buildingviolations in order toget rent reductions andlandlords often resortto harassment in orderto get tenants to moveso new tenants can becharged a higher rental.

. "Program for UrbanGrowth, 1972-1973.A pamphlet availablefrom the New York StateDivision of Housing andCommunity Renewal,Research and InformationBureau, 393 7th Avenue,New York, N.Y. 10001

. The vacancy decontrollaw lasted for only aperiod of six weeks.At the end of thefree market period

UNDERSTANDING

became voluntarilyvacant on or afterJuly 1, 1971 could nolonger be subject toany control orregulation by theState of New York.

. Under vacancydecontrol, the rent oftenants in residencewas not affected butnew tenants paidvarying rentals.

. Under terms of theEmergency HousingRent Control Law, thestate can remove rentcontrols fromapartments in anymuncipality when therental vacancy rateexceeds five percent.

. The Emergency TenantProtection Act of1974 is the neweststate law affectingrent control.

WHAT CHOICES DOES A BUYERHAVE WHEN IN THE MARKETFOR A HOUSE?

. The family in themarket for a housecan

- purchase anexisting house

- purchase an alreadybuilt new house


apartments the lawincludes stringentpenalties, bothcivil and criminalagainst landlordsguilty of harassment.

. The critics of rentcontrol claim thatrent control preventslandlords frommaking a fair profiton their investment.Many tenant groupsclaim that rentcontrol is the onlyway that many peoplecan afford decenthousing. Set up acommittee to studythe effects of rentcontrol in the stateand have them reporttheir findings tothe class.

. Contact the nearestoffice of the StateHousing Division ofHousing and CommunityRenewal - Office ofRent Administration-for information onrent control in thestate.

. Have the studentsindicate their pre-ference as to thetype of house theyprefer. What are thereasons for theirchoice?

32

40

SOURCE

Federal controlswent in;:) effect.

Under the Federalcontrols,increaseswere generally limitedto 2.5 percent abovethe rent of comparableapartments which hadbeen decontrolled andrented during the sixweeks prior to theFederal control period.

. "Advisory Bulletin -

Key Points to theEmergency TenantProtection Act of1974," availablefrom any Office ofRent Administrationof the Division ofHousing and CommunityRenewal

. Film: "Revolution inour Times," availablefrom Modern TalkingPicture Service, Inc.,927 19th Street, N.W.,Washington, D.C. 20006.30 minutes, Black andWhite, Free Loan.

UNDERSTANDING

build a house

- rent a house.

SHOULD YOU BUY ORRENT A HOUSE?

. To rent or buy isa decisioninfluenced by

- financialconsiderations

- family size andspace considerations

- how the family feelsabout giving up itsmobility

- a person's willing-ness to assume theresponsibilities ofthe maintenance ofa house and itsgrounds.

. The advantages ofrenting are

- mobility is retained


. Why does the newlymarried couple usuallysettle for a rentedhome?

. Prepare a displayshowing how thehousing needs of afamily might change,from marriagethrough old age,as the size and needsof the family change.

. Poll the class todetermine the totalnumber of moves oadeby the student'sfamilies during thepast ten years.

. Have a student whosefamily owns a housereport on the variousmaintenance and groundchores he must performon a regular basis.

. Discuss why peoplemight want to retaintheir mobility.

- expensive maintenance . Visit local repairmencosts are avoided and obtain approximate

costs for each of thefollowing jobs:,

33

41

SOURCE

"Should You Rent orBuy?" A pamphletissued by the U.S.Department of Housingand Urban Development,Washington, D.C.20410. Free

. "Buying or Selling aHouse," U.S. News andWorld Reports, May 7,1973, pages 57-59

. Thal & Holcomb,"Your Family and It'sMoney," HoughtonMifflin Co., pages148-152

UNDERSTANDING

- upkeep and repairs arethe problems of thelandlord

you may have theoption to buy ata later date.

. The advantages ofbuying a home are

- home ownership is anincentive to saveand is a measure ofeconomic progress

- monthly mortgagepayments may beless than rent forthe same amount ofspace


- weekly maintenance oflawn of 2000 square feetreplacing a septic system

- replacing a hot waterheater

- repairing a furnancewith a damaged fire box

- cutting down and removinga 60 foot high tree

- repairing a brokenwater pipeWhat conclusions can bedrawn from this survey?

. Point out that in somecases, especially wherean owner wants to sellthe house and he is

having trouble findinga buyer, a person whorents may have an optionto buy with part of therent already paid goingtowards the purchaseprice.

. local classifiedads for the monthly

rent for a three bed-room home. Find outthe average monthlycharges for a threebedroom home andcompare the costs.

34

42

. "Buying a House - The

Nine Most CommonQuestions," ChangingTimes, February 1966

. A study made comparing

annual rent with annualowner costs showedthat the annual ownercosts exceeded theannual rental duringthe first year only.In each subsequent yearowner costs went downand rental costsincreased. The conclu-sion of the survey is

SUGGESTED PUPIL AND


- interest paymentsand real estate taxesare deductitle fromincome taxes

- equity is beingbuilt with eachpayment

- home ownershipimproves yourcredit rating andgives you greateropportunity to"trade-up"

. If a person pays real .

estate and mortgageinterest paymentsthat amount to $1800a year, how much taxesare saved if theperson pays 26 percentof his salary fortaxes; 30 percent;36 percent?

. Discuss the meaningof "equity" and explainhow it builds as themortgane on a homedecreases. At thispoint discuss "sweatequity" and how thelabors of the ownercan improve the valueof a property.

. Explain the meaning of"trade-up."

SOURCE

that it is cheaper torent than to buy ifyou will live in thehouse only for a yearor so.

Write to the localoffice of the InternalRevenue Service andthe New York StateDepartment of Taxationfor rules and regula-tions concerning thededuction of realestate interest onmortgage payment from

Federal and statetaxes.

. Visit a local bank andpose the followinghypothetical questionsto the loan officer.- A person owns a home

valued at $35,000.His equity in thehouse is $20,000.He wants to buy anew home costing$55,000. Underwhat circumsteiceswould the bank issuea mortgage for S25,00n?

- A person has beenrenting a home for thepast three years.

35.4.1

UNDERSTANDING

an investment in ahome may stand upagainst changesin the economy betterthan other purchases.

WHAT FACTORS ARE INVOLVEDIN CHOOSING A HOUSE?

. cost of the house

. location


The rertal is $275a month. He is

employed at the samefirm as #1 abovearj makes the samesalary. He wants tobuy a $55,000 house.Under what circumstanceswould the bank issuethe mortage? Presentthe answers to bothquestions to the class.

. Investigate what hashappened to the valueof homes in yourcommunity during thepast five years.Report your findingsto the class.

. It must be empha-sized that buyinga house involvesthe assuming of along term obligationand a long term in-vestm7nt of money.Careful considerationof the family budgetmust be made beforea house is purchased.

. Wry is it not wiseto buy the best homeon the block? Whatmay changes in theneighborhood do tothe value of yourhome? How might thefamily'g happinessbe related to thelocation of the home?

36

. The National Associa-tion of Home Buildersreported that theaverage cost of a newhome spiraled nearly20 percent to morethan $41,000 during1973-74. Underpresent conditionsthe value of such ahouse will increasewith e0-11 passingyear.

. For a chart onestimating a housingallowance obtain acopy nf "Selectingand Financing a Home"from the U.S. Depart-ment of Agriculture.The chart is on page15.

. Refer to pages 15-17 in this module fora discussion onchoosing the properlocation.

. Schoenfeld & Natella,"Consumer and HisDollars," Oceana

SUGGESTED PUPIL AND


. extra assessments that .

might be levied againstthe property forutilities to beinstalled

. prospects of futureassessments to improvethe neighborhood suchas for streets, side-walks, sewers, andother improvements

. insurance rates andwater rates

. opportunities foremployment

It should be emph-asized that assess-ments against ahouse owner can add,greatly, to the costof running the house.The question ofassessments willcertainly warrantdiscussion where thehouse being purchasedis in a newly developedarea of the community.

. Check with the localhousing authority toget an approximatecost, to a homeowner,for the installationof a new sewage system.

. Point out that mostcommunities chargefor water used andthe insurance ratesfor a community mayvary from neighbor-hood to neighborhood.Invite the representa-tive of a localinsurance company tovisit the class todiscuss insurancecoverage availableand its cost.

. It should be pointed

out that if largedistances must betraveled to get towork, there will bea large additionalexpense for travelthat must be includedin the budget.

37

SOURCE

Publications. pp.

208-210.

. "How to Buy a Housein 5 Easy Steps,"Changing Times,February 1973,pages 6-11

. The local waterauthority can quoterates for waterusage in a community.Water costs can runto $150 a year andhigher.

. A report of theNational Commissionon Urban Problemsreports an interestingparadox with regardto employmentopportunities in

suburban communities.

The report showedthat central citiesincreasingly are


. transportationfacilities andcommutation rates

. Survey the typesof employmentopportunities inthe community inwhich theprospective homeis located.

. Have each studentselect an area inthe community whereht would like to owna home. Have themfind out what transpor-tation is available toget them to the near-est major employmentarea. Also havethem determine thecost of transportation.If private transpor-tation must be usedhave them determinethe cost of using anautomobile using17 cents per mileas a means ofdetermining cost.

. Make the point thatcommutation rateswill in all proba-bility continue torise and theprospective home-

owner should keepthis fact in mind.Since the end ofWW II fares havegone up nearly350 percent, and

38

4G

SOURCE

becoming white-collaremployment centerswhile the suburbsare becoming theemployment areas forblue-collar workers.

This is ironical inview of the fact thatlow-paid blue collarworkers, for the mostpart, (especially ifthey are minorities)live in the centralcity while white-collar workers areincreasingly livingin the suburbs.

Studies show thepoor spend a greaterportion of theirincome on transporta-tion than higher-income Americans.To help the low-income consumer withhis transportationproblems the Officeof Economic Opportunityinstituted a transpor-tion stamp programmodeled after thefood stamp program.Under the program,being tested in WestVirginia, eligibleparties can purchasetransportation stampsthat are good for all

modes of transporta-tion, public andprivate, so long asthe carrier is willingto accept the stamps.


. neighborhood

characteristics

. public and utilityservices available

. zoning laws

. school district

. tax rate

despite this rise,transportation industryprofits continue todecline.

. Refer ,0 page 16

in the module for adiscussion on neighbor-hood characteristics.

. Refer to page 4in the module for adiscussion what toconsider with regard:to public and utilityservices.

. Point out that zoninglaws can be, and arefrequently, changed.

Have a student preparea report on the zoningchanges made in hiscommunity during thepast twenty years.Discuss the effectchanges in zoningregulations have hadon the community asa whole.

. The school districtservicing a communityis usually given closescrutiny by a familybefore they move intoa community. Have

students indicate whatthey would look for ina school for theirchildren.

. The primary source of . In a pamphlet,school funds in many "Housing - A Nation-

communities is real- wide Crisis," theized from the proceeds author, M.S. Stewart,of the real estate or reports that the real

property tax. Compare estate tax in manythe tax rate in your areas is equivalenttown with a neighboring to a sales tax of

39

47


HOW DO YOU FIND THERIGHT HOUSE?

. Check with realestate brokers andreal estate advertising.

. Inform friends andneighbors you are inthe market for a house.

. Take a Sunday driveor walk looking forhouses for sale andmodel homes on display.

. Keep a record of allhouses you findattractive.

community. How wouldyou judge the qualityof the school systemsin both communities?Is there any apparentcorrelation betweenthe tax rate and thequality of the schoolsystem?

Invite the local taxassessor to visit theclass to discuss howthe value of a houseis determined fortax purposes. Alsohave him describe whathas happened to thetax structure over thepast ten years andwhat the situationappears to be forthe future.

. Ask students toconsult friendsand neighbors tosee if they know ofany houses that arefor sale. How manyleads were generatedby the class fromthis activity?

40

SOURCE

20 to 30 percenton housing. Mr.

Stewart reports thatif the real estatetax were cut to thesame level A thesales tax (6 or 7percent of rentalvalue), another 10percent of low-incomefamilies would be inposition to purchasenew housing.

. "Wise Home Buying,"from U.S. Departmentof Housing and UrbanDevelopment,Washington, D.C. 20005

. Murray, Robert W.,"How To Buy the RightHouse at The RightPrice," Collier Books,New York 1965

SUGGESTED PUPIL AND

UNDERSTANDING' TEACHER ACTIVITIES

SHOULD YOU BUY AN EXISTINGHOUSE OR A NEW HOUK?

. New houses are gen-erally built as partof a developmentforming a new commu-nity. Existing housesare mostly found inestablished communities.

. New houses offer thebenefits of modernconstruction methodswhile older houseswere built todifferent standards.

. Lighting aid elec-trical wiring in newhouses will meet up-to-date buildingcode specifications.

. Maintenance costs fornew houses are lowerthan for olderhouses.

. The purchase of anew houses usuallyrequires lowerdown paymentsthan for olderhouses.

Generate a discussionas to which is moredesirable: buying

a new house in a newcommunity withneighbors all start-ing out together orbuying an existinghouse in an alreadyestablished neighbor-

hood.

. Invite a local buildingcontractor to visitthe class to discussmodern methods ofconstruction asopposed to the kind

of constructionused in homes built20 and 30 years ago.

. Check with a localelectrical contractorto determine the costof rewiring a threebedroom house.

. Discuss how the owner'sequity in an existinghouse usually requiresa higher down paymenton the part of thepurchaser.

. Check the classifiedads and compare downpayments required onnew houses as opposedto older houses beingsold.

41

SOURCE

. Statistics show thattwo out of every threebuyers purchase aused house.

. "Buying or Building aHome," a pamphletavailable from theBetter Business Bureau,Boston, Mass.

. "FHA Quick Guide toBuying a Home,"Superintendent ofDocuments, GovernmentPrinting Office,Washington, D.C.

UNDERSTANDING

. If the house ispurchased beforecompletion thebuilder may allowminor changes indesign.

. Taxes on older housesare usually morestable than taxeson new houses.

. New houses can belandscaped accordingto your desires whileolder houses willhave already beenlandscaped.

. A substantial sumof money forredecorating maybe necessary in anolder house.


. It should be made clearthat changes,if allowedby the builder, wouldnot be any that requiredany major structuralchange unless thepurchaser was willingto pay for the majorchanges.

. Discuss why the taxrates on older houseswould remain morestable than onnewly built houses.Be sure to pointout the many improve-ments that must bemade to the neighbor-hood in new develop-ments.

. Point out that thebuilder of a houseusually puts in alawn and possiblyone or two treesand nothing more.The rest of the costof landscaping isborne by the homeowner. Have studentsvisit a local nurseryto obtain prices ofvarious trees andshrubs that theymight want as land-scaping around ahome they owned.What would theyestimate to be thecost of landscapingaccording to theirdesires?

. Contact a localhome improvementfirm and obtainapproximate costs ofputting a new kitchen

. "How to Shop For anOlder House," BetterHomes and Gardens,October, 1966

. "Landscape for Living,"1972, 416 pp. Price$3.50. Can bepurchased from theConsumer ProductInformation Center,Public DocumentsDistribution Center,Pueblo, Colorado81009

. Below are typicalcosts for normal homeimprovement jobs

recommended by theNational Home Improve-ment Council:

CostJob Ran eReplacing 1700.7.hot-airfurnace

Reroofing $90-$125 perover 100 sq. feet.

asphaltshingles

Residing $2400-$3500

house

continued

SUGGESTED PUPIL ANC


. Schools, shoppingcenters, transpor-tation and enter-tainment facilitiesare already avail-able in communitieswith older houses.

. Older houses rpav be

less salable thannew houses.

HOW DO YOU JUDGEQUALITY IN A HOUSE?

. The house designshould be attractive,practical andcomfortable.

. Rooms should be of

adequate size forthe usual furnishings,

. Closets should beplentiful and bigenough with at leastsix feet of rodspace.

. Size and shape ofthe lot upon whichthe house is builtshould be adequate.

. Construction featuressuch as trim aroundwindows, fit of windows

and doors, insulation

into a house;remodeling a bath-

room; building aden in the base-ment.

. Discuss the ad-vantages of the

different typesof house design -split level, twostory, ranch,house with orwithout basement.

. Invite the ownerof an older hometo discuss possibleconstruction faultsto watch for.

SOURCE

Cost

Job Rar.je

Installing $1000new tileshower

Remodeling $1000kitchencabinets

Dormer and $6000 to

new room $900015 x 20feet

Adding 2nd $12,000 tostory to $18,000one-storyhouse

Exterior $1200 to

painting $1200

. "What You Should KnowBefore Ycu Buy a Home,"a pamphlet availablefrom the US, Savingsand Loan League,221 N. LaSalle Street,Chicago, Illinois

. "How To Shop A NewHouse," Better Homesand Gardens, Sept.,1973, 54-58

. "How to Buy A Housein Five Easy Steps,"Changing Times,February 1973

. Have students examine . "Buying or Building a

their home or apart- Home," Better Businessment to check on the Bureau, Boston, Mass.

following defects:

43

UNDERSTANDING

in attic, conditionof roof and gutters,and number andplacement ofelectrical outletsshould be of

good quality andadequate.


WHAT PRECAUTIONS CAN BETAKEN BY THE BUYER TO INSUREHE IS RECEIVING VALUE FORHIS MONEY#

. If you are purchasinga new home it wouldbe desirable to

- check the reputationof the builder

settlement cracksin foundation orwalls; rot in woodgirders or joists,water stainsindicating leakage,low water pressure,flaking paint andpoor drainage fromthe lot. What

conclusions canthey draw as to theconstruction ormaintenance of theirhome or apartment?

. Discuss how theprospective buyercan check thereputation of alocal builderthrough the officesof the BetterBusiness Bureau, thelocal bank, or otherhomeowners whoused the builder'sservices. This isvital to any de-cision on buying a

home since so manyhomeowners havetrouble with builderswho do not live up totheir promises.

engage an architect .

or professionalengineer to inspectthe house at variousstages of construction

Invite an architectto class to discusswhat the architectlooks for when heinspects a new housefor a client. Also

SOURCE

. Hoffman, George, C.,"Don't Go By Appear-ances - A Manual forHouse Inspection,"House Book, Box 80,Corte, California.94925. 1972, 88 pages.

$3.00

. Contact the localBetter BusinessBureau and have themsend you the latestinformation on problemshomeowners are havingwith local builders.

. The local architecturalsociety can provideinformation onarchitects availableto visit the school.


- check to see that thehouse was builtaccording to localbuilding codes

- obtain details ofthe builder'sguarantee and forhow long theguarantee. runs.

. If you are purchasingan existing house itwould be best to

- engage the servicesof an architect orengineer to inspectthe house.

- Items to beinspected includecondition of thebasic structure,heating andplumbing systems,condition ofappliances, andelectrical wiring.

HOW DO YOU GO ABOUTBUILDING YOUR OWN HOME?

. The first steptoward building ahome is acquiring

a site.

have him indicatethe usual feecharged for such

services.

. Why would it be

desirable to havedetails of thebuilder's guaranteespelled out in

writing?

SOURCE

. Information on local

building codes can beobtained through thehousing authority in

the community.

. Explain how the cost .

of hiring a profession-al can more than off-set the cost if theinformation providedindicates a houseis not a good buyat the price becauseof extensive repairsrequired. Alsoindicate that anarchitect's orengineer's reportcould result in alower price for ahouse because it doesrequire major repairs.

. Ask a real estate

broker or builderhow one locates a site.

What are typical lotsselling for in your

community? Why should

45

Appraisers areavailable in mostcommunities who willinspect a house for afee of approximately$75-$150.

"What You Should KnowAbout Home InspectionServices," AmericanHomes, November 1973,page 8

"Buy or Build a Home,"Better Business Bureauof Metropolitan NewYork,220 Church Street,New York


. A site should besurveyed in advanceof purchase.

. A check should bemade of thetopography andslope of theground.

. An examinationshould be made ofthe type of groundon the site.

. After land is acquired,it is necessary toobtain building plans.

- Building planscan be purchasedfrom the govern-ment, or frompublications

dealing withhousing such as

the lot be surveyedbefore purchase?

. Point out that slopeof ground is vitalwhere water run-offis concerned. Alsomention that the siteshould be checkedduring a heavy rainto determine whathappens to waterrun-off. Low lyingareas next to riversand streams mostdefinitely mustbe checked againstthe possibility offlooding.

. Indicate thatexcavation costsdepend on the type

of ground beingexcavated. The moredifficult theexcavation job themore expensive.Removal of solidrock will cost morethan $1 per cubicfoot. Wet land maynot be suitable forbuilding purposes.

. Have students checkthrough back issuesof Better Homes andGardens in the school

library. Using classfunds send away forone or two sets of

4617"

SOURCE

. House Construction:How To Reduce Costs,"Consumer Information,Consumer Productsinformation Center,Pueblo, Colorado.81009. Guidelines for

savings in location,style, interiorarrangements, andin selection of materi-als and utilities

. "Buy A Lot And BuildA House?" ChangingTimes May 1969

. For information onsoil, write for

"Know the Soil YouBuild On." Availablefrom Consumer Informa-tion, Public DocumentsDistribution Center,Pueblo, Colorado.810u9. Cost is 15cents. Advice on howto choose suitableland for building.

. See the "Yearbook ofAgriculture 1965" forbuilding plans orcontact the County

Extension office forhelp.

UNDERSTANDING

Better Homes andGardens.

- An architect can

be engaged to takeyour ideas andtranslate them

into a practicalworking plan,oryou can ask thearchitect todesign a housefor you.

- An architect canbe hired just toproduce a house

plan; or his

services caninclude thedrawing of theplan, the hiringof a constructionfirm, and completesupervision ofthe buildingprocess once workis started.

. Other ways of 5uildinga h' e include

- hiring a contractoror builder to buildyou a home usingstock plans

buying stock plansand making arrange-m...ts with different

contractors fordifferent phasesof the work.


house plans. Go

over the plans withthe class to see ifthey meet the needsof the class as awhole.

. Contact a local architectand obtain informationas to how th architectarrives at a ' For

designing a house.Try to find out theaverage cost of thearchitect's services.

. It should be madeclear that the morework required or thearchitect the higherthe cost of theservices to thehomeowner.

. Indicate that buyingstock plans and usingdifferent contractorsto do the variousjobs in lved in

building a housecould result insavings for the

owner-builder. It

47

SOURCE

. "Building a house withready-made plans,"Changing Times,December 1972

The U.S. Governmenthas a number ofpublications availablefor people who decideto build their ownhomes. They alsoprovide house plansfor a minimal price.Some pamphlets

SUGGESTED PUPIL AND


WHAT CONSTRUCTIONMETHODS ARE BEINGUSED TO BUILD HOUSING?

. Most houses arebuilt using thetraditional on-site buildingmethods.

. Building a house

by conventionalmethods requiresthe purchase ofbuilding plansand the servicesof people in theconstruction field.

should be madeclear, however,that the owner-builder will haveto spend many hoursfinding people todo the work, and in

addition it will behis responsibilityto obtain all thenecessary permits,purchase the necessarysupplies, and superviseconstruction duringthe building process.Ask students how theyfeel about arrangingfor the building oftheir own home. Whatmisgivings, if any,might they have?

. Arrange for a fieldtrip to a buildingsite so students maysee how homes areconstructed. Tryto arrange for aknowledgable personto explain what thestudents are seeing.

. Prepare a list ofall componentsinvolved in thebuilding of a newhouse from theexcavation of thesite to the finaltouches of paintingand decorating.

48

SOURCE

available are "Designsfor Low-Cost WoodHomes," "Fireplaces

and Chimneys.""Construction Guides

for Exposed WoodDecks," 'HouseConstruction - How toReduce Costs," "LowCost Wood Homes" and"Wood-Frame House

Construction." All

materials are avail-able from the PublicDocuments InformationCenter in Pueblo,Colorado.

. Contact one of thelarger well-knownbuilders in thecommunity to try toarrange the fieldtrip. Before under-taking the trip,however, check to besure the school'sinsurance coveragewill cover such a trip.

. An article in theAlbany Times-Union,August 18, 1974 reportsthat housing starts(the number of housesbeing built) is downbelow the 2 millionlevel for the year.This is attributed tothe tight money marketand the soaring pricesof construction.

UNDERSTANDING

. The building industryhas developed newmethods of constructionin the hope ofultimately reducingconstruction costs.

. Pre-cutting is arelatively newmethod of homeconstruction.

- All lumber andother partsneeded toconstruct a houseare pre-cu.,: at

a factory andshipped to thebuilding site.

- At the siteconstruc-

ion people assemblethe parts followingdiagrams sent fromthe factory.

. Pr-fabricating partsof a house is anotherrelatively new methodof construction.

- Pre-fabricating isa process wheresections of thenouse, such as walls,floors, roofs andceilings, arepre-cut and assembledat the factory.

- The sections arethen shipped to thesite where they areput together.


. Point out thatalmost 20 percertof the nrw homesbeing bui't thisyear will consistof parts pre-cut ata factory andassembled at thebuilding site.

. What are theadvantages of buyinga pre-cut or pre-fabricated house?What are the possibledisadvantages?

. A house is basicallya series of layers,consisting of an

external wallcovered with siding,a support wall offraming lumber,insulation, an innerskin of plaster orplaster board, anda wall covering.Why might it be moreeconomical to havethese layers assembledat a factory?

Prices on constructionmaterials are increas-ing by leaps andbounds, and builders

who might ordinarilybuild on the speculativemarket are reluctantto do so in thesetimes.

Contact dealers listedunder "Houses Pre-CutAnd Fabricated" inyour telephone directo-ry: write to one ormore of them, explain-ing your project, andasking for samplefloor plans andillustrations.

iHOME BUILDING

IN A SLUMP2.5

NIL 2.5 MIL

2.1MIL.

HousingStarts(annual

rate,1.7 seasonally

MIL-- adjusted)

9

1.3MIL0 f. frvirmir mit!

JFMAMJJASONDJFMAMJJ1973 I 1974

Source. Fodor,' RUINS Board: U.S. Mots. o4Commerce. Labor -1

1.3 MIL

SUGGESTED pun ANDUNDERSTANDING TEACHER ACTIVITIES

. Building modules isa third method ofconstruction being

used.

- A module is acompleted sectionof a house.

- The module, havingthree completedwalls, is shippedto the building

site where it isjoined togetherwith other modulesto form the house.

Modules, when theyleave the factory,are complete sectionsincluding appliancesin kitchen sections,bathrooms, electricaloutlets, etc.

. Whatever the type ofconstruction used, afoundation must bebuilt for all homes.

. All homes whencompleted must behooked into existingpower, waters and

sewage lines.

. Where water andsewage lines arenot available theowner must dig a welland build a septicsystem to take careof wastes.

. The use of newermethods of constructionis expected to keepbuilding costs withinreason during the yearsto come.

. Point out that amodule used inhouse constructionis very similarto a mobile home.The only differenceis that usually themodule has onlythree walls. One

wall is left outas this is whereother modules,forming the house,will be joined.Levitt and Sons,one of the countrieslargest builders,turns out a modularunit that can beplaced on a founda-tion or on wheels soit can be used as amobile home.

SOURCE

U.S. News and WorldReport states thata survey of the homebuilding industrysnows that 450 of thelargest building firmsin the country planto put up 50 percentmore modular andpre-fabricated housingin 1974.

. Point out that amajor advantage ofusing pre-cut andpre-fabricated materialsor modules is that itcuts down constructiontime. In the case ofmodular housing thehomeowner can have afinished home in afew days time.

. Contact the localbuilding inspector.Are prefab housespermitted in yourarea? Why mightlocal labor objectto such housing?

One of the problemsholding back rapiddevelopment of modularhousing is the highcost of transportingthe modules to thebuilding site. To

overcome this problemthe Federal governmentis attempting to getstates to adjusthighway shipping costsfor modular housing.


HOW DO MOST PEOPLE FINANCETHE PURCHASE OF A HOME?

. Most individualsfinance a housepurchase byborrowing moneywith a mortgageon the home givenas security.

. Shopping for thebest availablemortgage can beas important asshopping for agood house.

- Interest rateson mortgages willvary from lendinginstitution tolending institution.

. A mortgage requiresthat repayment bemade in monthlyinstallments.

. Failure to make themortgage payments canresult in thelender taking overthe property andthe borrower losingthe equity he hasacqui red.

WHERE CAN YOUOBTAIN MORTAGE LOANS?

. Loans are availablefrom savings banks,commercial banks,savings-and-loansassociations,mortgage bankers, andand insurance

companies.

. Send selected studentsto different lendinginstitutions in thecommunity. Have themdetermine what thecurrent interestcharges are for homemortgages.

. Make a bulletin boarddisplay to show thecost of borrowing moneyat various rates. With

the average rates onmortgages now at 9percent what wouldbe the interest costson a 30 year mortgageif $25,000 wereborrowed?

. Repeat the importanceof shopping formortgage moneybecause the savingsof 1/2 percentinterest couldamount to sub-stantial amountsof money over thelife of a mortgage.

51

51'4

SOURCE

. More For Your Money,"a column written byArt Watkins. FamilyCircle, August, 1971

"Wise Home Buying,"U.S. Department ofHousing and UrbanDevelopment,Washington, D.C.20005

. Statistics show thatsavings and loanassociations accountfor by far the greatestnumber of mortgageloans, followed bycommercial banks,savings banks, and life

insurance companies.

SUGGESTED PUPIL AND


. To assure the bestmortgage terms theborrower shouldcompare

- the terms offeredby the variouslenders

- the amount youcan borrow

- the rate ofinterest to bepaid during thelife of the loan

- number of yearsthe mortgage willrun

- special servicecharges made forprocessing andgranting a loan.

. Obtain figures, froma firm advancingmortgage money asto how much interestmust be paid on amortgage of $20,000for a period of25 years at a rateof 8 percent; 8 1/2percent; 10 percent;12 percent.

SOURCE

. "Estimating Abilityto Pay for a House,"1962 Federal HousingAdministration Washing-ton. D.C. 20402

. The chart below showswhat monthly paymentswill be for each$1000 borrowed atdifferent rates ofinterest for differentperiods of time.

. Try to obtainfrom a bankofficer thecriteria usedto determinethe amount (Jr*

money the bankwill lend on amortgage.

Interest Payment PeriodPercent 10 20 30

yrs yrs yrs

7 1/2

8 1/2

9

10

$11.88

12.40

12.67

13.22

$8.06

8.68

9.00

9.66

$7.00

7.69

8.05

8.78

. Point out thatinterest rates areconstantly fluctuatingand the rate quotedwhen shopping for aloan may not be thesame when ready toclose the deal forthe mortgage.

. Ernpnasize that the

longer the mortgageruns the more thatis being paid interms of interest.

. Most lendinginstitutionscharge "points"and other fees

52

am===m====SI ap for a mortgage as

you would for food

. Rep. Wright Patman(Dem.) of Texas feelsthat the home buyergets stuck with some


WHAT ARE THE TYPES OFMORTGAGE LOANS AVAILABLE?

. Various types ofmortgage loan plansare available.

These are the

conventional loan

VA (Veterans

Administration) loan

FHA (Federal HousingAdministration)insured loans

- Farmers HomeAdministration loans

. Conventional loansare made strictlybetween you andthe lender.

- This type of loanis the most common

type used to buy

before a deal isclosed. Points andfee closings will bediscussed later inthe module.

. The average consumeris bewildered by thenumber of differentways of computingcosts. The best wayto compare them isto ask a number ofbanks and otherleading institutionswhat the net cost isfor a specific sumover a stated period ofyears; for example,what is the netcost to brrow $30,000for a period of 30 years?

SOURCE

unnecessary and over-blown charges whenpurchasing a house.It is his contentionthat this preventslow and moderateincome families frompurchasing a home.Congress is lookinginto some bills thatwill control thesecosts.

Bettr housing is in sight for many

. Invite staff membersor parents who haverecently obtainedmortgage loans tovisit the class todiscuss theirexperience whileshopping for theloan.

53

4-;

. The chart belowshows how muchinterest is b.ingpaid for a $20,000mortgage over a 25year period atvarying interest

rates.

UNDERSTANDING

and build homesand is the easiestto obtain.

- Conventional loans

usually run for aperiod of up to30 years.

- The borrower canusually obtain asmuch as 80 percentof the value ofthe propertyincluding thehouse and theland.

- Larger down paymentsare usuallyrequired with thistype of loan.

- Interest rates

for conventionalloans vary, dependingupon the amount ofthe down payment,area in which thehouse is located,credit rating ofthe party .raking

the loan, andeconomic conditionsat the time ofsigning.

Banks use totalincome earned asa major basis indeciding how muchof a mortage togrant.


. Invite a localbank officerto visit theclass to discusshis bank'spolicy withrespect tomortgages.Is mortgagemoney avail-able? Arebanks offeringdiscounts tothose with older-type, low-interestrate mortgages toencourage borrowersto pay up thebalaoce due?Why would this be so?

SOURCE

Interest Total InterestOver 25 Years

6%

7%

$18,00022,390

7 1/2% 24,3308% 26,280

8 1/2% 28,2009% 30,220

9 1/L, 32,37010% 34,460

. Point out that banksrequire the largerdown payment becausethere is no agencyor firm thatguarantees paymentof the loan. Alsoindicate thateconomic conditionswill dictate thesize of the downpayment required.In tight moneymarkets, banks havebeen known to askfor a down paymentas high as 40 to 50percent beforegranting a mortgage.Discuss how thisaffects the chancesof low and middleincome families inthe mortgage market.

. Indicate that underterms of the 1974Federal Housing lawlenders must includeall of a working

54

62

. "Mortgage 'Bargains,'"National Observer,September 28, 1974,p. 8

. Mortgage loans at thetime this is beingwritten are very hardto obtain becauseof the tight moneymarket. In addition,where mortgaaes areavailable, interestbeing charged is veryhigh. Interest rates,as you know, vary andare dependent oneconomic conditions.Therefore, check withlocal lendinginstitutions todetermine the currentinterest rates beingcharaed at the timeyou are discussingmortgages with yourclass.


. FHA loans are madeby private lenders

and insured by theFederal HousingAdministration

- With FHA insuredloans the borrowercan obtain up to97 percent of theproperty value.

- There is a maximumamount that will beinsured by the FHA.

- To pay expenses andcover possiblelosses the FHAcharges an insurancepremium of 1/2 percentper year on theunpaid balance ofthe loan. This

charge is includedin the borrower'smonthly payment.

- Since the FHA willinsure loans up to97 percent of thevalue of the property,the borrower canusually purchase ahome with a smallerdown payment.

- Interest rates thatcan be charged fora FHA insured loanare regulated by theFHA,

wife's income whenthey calculate howmuch a working couplecan borrow to financea house purchase.

. Make it clear to theclass that the FHAdoes not make loans.The FHA only agreesto insure the lenderagainst loss if theborrower fails torepay the loan.

. Discuss why lendinginstitutions will lendmore money when theFHA insures a 'oan.

. Indicate thatFederal law setsa ceiling on howmuch of a mortgagethe FHA will insure.Point out the ceilingvaries with the typeof house.

. Make it clear thatbecause the ceilingshave been increasedon mortgages theprospective buyerneed not make verylarge down payments.Set up some examplesshowing how downpayments differ.Point out that thefact lenders willaccept smaller downpayments with FHAinsured loans has

made it possiblefor low-income andmoderate incomefamilies to purchasehomes.

55

63

SOURCE

. The 1974 FederalHousing Law underSection 203 has setthe following ceilingon mortgage loans.

Size Old NewCeiling_ Ceiling

Onefamily $33,000 $45,000

Twofamily 35,000 48,750

Threefamily 35,750 8,750

. Example: On a $48,000single family home,the down payment underthe old law wouldcome to $15,000. (The

maximum FHA insuredmortgage was $33,000.)Under the new law thedown payment needonly be $3000.


. Before agreeing toinsure a loan, the

FHA appraises eachhome to determineits value and todetermine that itis structurallysound and doesnot present conditionsthat endanger thehealth, safety,and well-being ofthe occupant

. Where owners cannotmake mortgagepayment on FHAinsured mortgages,the FHA takes overownership of thehouse and offers itfor sale to interest-ed home buyers.

- For help in findingFHA owned houses,contact any realestate broker.

. VA guaranteed loans

are made to eligibleveterans by privatelenders.

. Check with the FHA todetermine the maximuminterest rate theywill allow with anFHA insured loan.

. Check with local

'real estate

brokers to get alisting of FHAhomes in thecommunity that arefor -ale. Havestuuents visit thehouses and reportback to the classon the conditionof the property.

56

SOURCE

. The present maximumrate on loans insuredby the Federal HousingAdministration andguaranteed by theVeterans Administrationis 9 1/2%. The ratecan change frequently(during 1974 it changedfour times) so tofind out the currentmaximum rate allowablecontact the FederalHousing Administrationand the VeteransAdministration.

. "Anyone Can Buy an

FHA-Owned House,"a pamphlet put outby the U.S. Departmentof Housing and UrbanDevelopment. Avail-able from the Super-intendent of Documents,

U.S. GovernmentPrinting Office,Washington, D.C. 20402.Price, 5 cents.

. "To The Home BuyingVeteran," VA pamphlet26-6, Revised. Avail-

able from the VeteransAdministration,


. Before insuring aloan the VA willinspect the hometo be purchased todetermine value.

. The borrower makeshis own arrangementsfor the loan throughthe usual financialchannels, and the VAthen guarantees thelender against lossup to 60 percent ofthe loan.

. There is no charge toWW II and Korean veteransfor guaranteeing a loan;Vietnam veterans arerequired to pay a smallfee, 1/2 of one percentof the amount of the loan.

. The Farmers HomeAdministration offershousing loans torural families whoare able to obtaincredit.

WHAT ARE SOME MORTGAGETERMS YOU SHOULD KNOW?

. Open end mortgage -gives the homeownerthe right to request,at a future date,additional moneyfrom the lender forimprovements ormodernization ofthe home.

SOURCE

Washington, D.020420

. "Pointers for theVeteran 4omeowner,"VA pamphlet 26-5Revised. May 1971.Available fremVeterans Administra-tion. See address

above.

. Loans made by theFarmers Home Administra-tion can be used to buyan existing house,buy a lot and builda home or build orrepair a home on landalready owned. Writeto the Farmers HomeAdministration for moreinformation on theseloans.

Discuss theadvantages of theopen-end mortgageto the borrower.

57

. "Consumer in theMarketplace." Ibid,

pp. 238-39

. "A Mortgage BankerSpeaks to The HomeBuyer." American Home,Summer, 1966. pp 44-5

UNDERSTANDING

. Package mortgagepermits the borrowerto include cost ofappliances, furnish-ings, and otherequipment foundin the house in themortgage loan.

. Prepayment privilege -a feature that allowsthe homeowner to makelarger payments thanrequired by the termsof the contract. By

paying off the mortgagesooner, the borrower

saves on the amountof interest to be paid.

. Deed -

a legal paper trans-ferring title ofproperty from sellerto buyer.

. Warranty deed -gives title to thebuyer, and the seller

warrants that he willdefend title to the


. Explain that this . "An FHA Guideline of

allows the borrower Home Mortgage Payments,"to pay for the cost Federal Housing

of appliances over the Authority, Washington,

life of the loan. To D.0

determine the cost offurnishing a new househave students shop forthe following items to

determine the additionalcost over and above thecost of the house:Refrigerator, freezer,three 10,000 BTU airconditioners, washingmachine, dryer, 50square ycrds ofcarpeting, and garbagedisposal unit. Is it

wise to include the costof such items whichnormally might beexpected to last 15years on a 30 or moreyear mortgage?

. Some banks may chargea premium if you wantto pay off the mortgagesooner. Discuss whybanks might want tocharge a person forpaying off his debtssooner than he isrequi red.

. Obtain a copy of adeed. Use an opaqueprojector to showthe deed to theclass and discussthe items coveredin the deed.

58

fiki


property against anyoutside claims. If

at a later date itbecomes clear theseller did not haveclear . le thebuyer may sue forbreach of warranty.

. Quitclaim deed -gives the buyerwhatever titlethe seller mayhave had and thebuyer assumes anyrisks.

. Title search -a method of checkingthe safety of titleof a piece of property.It traces the historyof ownership of apiece of property.

. Title insurance -an insurance policythat usually protectslenders against lossof their interest inproperty due toquestions as towho has legal titleto the property.

. Equity -a buyer's initial andincreasing ownershiprights in a house ashe pays off themortgage

. Earnest money -the deposit moneygiven to the seller bythe potential buyer toshow that he is seriousabout buying the house.

. Why is the warrantydeed preferable tothe quitclaim deed?

. Discuss why a titlesearch should alwaysbe undertaken whenproperty is beingpurchased.

Check with a localinsurance company todetermine the costof title insurance.Also point out thatthe borrower paysfor the titlEinsurance.

. Explain that whenthe borrower pays offthe mortgage he has100% equity in thehouse; that is tosay that if the houseis sold for $50,000the entire sum belongsto the homeowner.

. Why must some moneybe transferred beforean agreement topurchase a home isbinding? Why mustthe agreement be inwriting?

(0?

SOURCE

. "Wise Home Buying."U.S. Department ofHousing and UrbanDevelopment, Washing-ton, D.C.

. Until some moneychanges hands frombuyer to seller noArrangement for saleis binding. The amountof earnest money may


. Escrow funds -money, or papersrepresenting

financial trans-actions, which aregiven to a thirdparty to holduntil the conditionsof a contract arefulfilled.

. Mortgagor -the person whomortgages hisproperty (theborrower)

. Mortgagee -the person to whommortgage is given(the institutionlending the money)

. Closing costs -sometimes calledsettlement costs. Theyrepresent costs inaddition to the priceof the house.

. Why did consumersobject to banksholding funds inescrow withoutinterest? Banks

must now pay 2percent intereston such accounts.Should the interestbe higher?

. The terms mortgagee andmortgagor are oftenmisleading to thepublic. The mortgageeis the lender, theperson who is receiv-ing the mortgage. The

mortgagor is theperson who owns theproperty and isgiving the mortgage.

. A discussion ofclosing costs will bemade later on in themodule.

. Closing day -the date nn whichthe title for theproperty passes fromthe seller to thebuyer

. Mortgage discount . "Points" will be

"Points" - discussed in the

AIL

SOURCE

be as little as $1but normally is 10percent of thepurchase price.

. "Home-loan escrowaccounts: Service orSwindle?" ChangingTimes, July 1972

. Payments for taxesdue are normally placedin escrow by the lend-ing institution. They

are paid in monthlyinstallments to thebank, for example,which then pays thetax as it falls dueannually.

UNDERSTANDING

a one time chargeassessed by thelender to increasethe yield from themortgage.

WHAT ARE THE CLOSING COSTSYOU CAN EXPECT TO PAYWHEN YOU PURCHASE A HOUSE?

. Closing csts areadditional expensespaid by the buyer onthe day the sale isfinalized.

. Closing costs areall the charges andfees incurred intransferring owner-ship of the house,in processing theloan papers, P ' in

taking the stnecessary to irethe lender is protected.

. Charges that areusually found on thesettlement statementinclude

- title search

- title insurahce

- attorney's fees

- survey fees


section on Closing.

Make it very clearthat closing costscannot be avoided andthe prospective home-buyer should be madeaware that closingcosts can range to$1000 and more andthis money must bepaid, s a lump sum,by the buyer on theday the deal isclosed.

. Refer to page 59for the meaningsof these terms.

. Indicate that

attorney fees are amatter to be discussedbetween the buyer andh4s attorney and theseller and hisattorney. It is bestto discuss theseat time the attorneyis retained.

. Indicate that asurvey is ilportantas it gives you theexact boundaries of

61

SOURCE

. "Buying a Home Don'tForget Those ClosingCosts," pamphletavailable from U.S.Department of Housingand Urban Developmeit.The pamphlet may beobtained I,'om any HUDarea office or HUD-FHAinsuring office.

. "How Do You Save onClosing Costs?"Mechanics Illustrated,June, 1973, pages 60-61

. In In article in"U.S. News and WrIrld

Report," March 6,1972, it is reportedthat many personsbuying a home for thefirst time are shockedat the "extra" cashpayments they haveto make when they getready to "settle."In addition to theprice of the houseand the sales commis-sion, fees are leviedon buyer and seller,or both, for thingssuch as title search,title i,isurance,

legal services,transfer of property,preparation ofdocument notaryservices, transfertaxes, recording cost,


- fees for thepreparation of thedocuments such asdeed, mortgage, andother papers pertinentto the sale

- closing fee

- credit reports

- termite inspection

- origination fee -a service fee chargedfor origination ofthe loan. It is

usually a smallpercent of theface value of themortgage.

the property. The

cost of a survey iswell worth it whenyou consider theheadaches that canbe avoided whenyou know exactlywhere your propertybegins and ends.

. Point out this is acharge made forhandling thesettlementtransaction.

. Lenders usuallyobtain creditreports on peoplelooking formortage money.The cost of,this is usuallyborne by theperson who wantsto borrow themoney.

Many lendersrequest thatproperty be checkedfor harmful pestsbefore grantinga loan.

. Point out that inFHA and VAguaranteed loansthe service fee canbe no more than onepercent of themort9age amount.For example, if

62

71

SOURCE

and escrow charges.

. A survey made by theDepartment of Housingand Urban Developmentand the Veterans Ad-ministration revealedthat closing costsvary widely acrossthe country. Theyaverage about $558and can run muchhigher, particularlyfor expensiveproperties. Thesurvey was based onlyon sales involvingfederally insured orguaranteed mortgages,but it reflectstrends in the con-ventional mortgagemarket as well. Somef47ures cited in the';Ivey showed:

Average ClosingCost For

State Seller Buyers

New York $240 $645

New Jersey $169 $592Connecticut $ 80 $373

Calif lnia $425 $252

Texas $377 $105Massachusetts $ 76 $288

Virginia $317 $480

Alaska $328 $491

. "All The Costs YouFace in Buying a Rome,"Good Housekeeping,February, 1973,page 170

. "Some Breaks ForHome Evers,"

SUGGESTED PUPIL AND

UNDERSTANDING TEACHER ACTIVITIES SOURCE

- Mortgage discount - .

"Points" - a onetime charge made bythe lender thatenables him torealize a greateryield from themortgage

the mortgage is for$15,000 the servicefee on an FHA loanor VA loan willamount to $150.

It should ')e made clearthat charging "points"is nothing more than amethod used by the lenderto get a greater yield ona mortgage loan. In tightmoney markets lenders willattempt to get more"points" so they can makemore money. The buyershould be made aware, aswas indicated previously,that he, in many instances,is in a position to shopfor a mortgage. When

economic conditions makeit a "buyer's" marketthen the buyer shouldlook around for a loanwhere it is not requiredto pay "points." FHAand VA guaranteed loansforbid the home buyerfrom paying points.This should show why itmay be difficult toobtain FHA and VAguaranteed loans. To

explain how points arepaid use this example.A mortgage is for $20,000and the lender is chargingthree points. Each pointis equivalent to one per-centage point, so the buyeris paying 3 percent or$600 to secure the loan.The $600 is discounted,or deducted, from themortgage amount s,'; tLa

borrower only receive:$19,400 but he pays backthe full $20,000 overthe life of the mortgage.

63

7

U.S. News and WorldReport, February 4,

1974, page 30-31


. An appraisal fee

. A recording fee -charged by the localgovernment to recorddocuments

. State and localtransfer taxes

. Mortgage insurancepremiums

. Indicate an appraisalis designed to determinethe value of the property.fn FHA and VA loans thefee is established bygovernment regulation.

. Check with a localappraisal firm todetermine the chargefor an appraisal inyour community.

. Investigate the costof recording fees inyour community.

. What is the localtransfer tax?

. Make it clear thatmortgage insurancepremiums pay forinsurance thatguarantees thelender againstloss if the borrowerfails to make hispayments. This

type of policy shouldnot be confused withmortgage life ordisability insurancepolicies designed topay off the mortgagein behalf of theborrower should he

die or becomephysically disabled.

. There may also bea number of miscellaneovsfees to cover notary v.sts,inspection fees, chargesfor photographs of theproperty, a schedule ofmortgage payments, andother incidental expensespayable by either thebuyer or the seller.

64


HOW DO YOU GO ABOUTSELLING A HOUSE?

. The seller canattempt to sellthe house by him-self or he can employthe services of areal estate agent.

. When you undertakethe selling of a houseby yourself,you arein a position to savethe commission thatwould have to bepaid to a broker.

. When an owner decidesto sell his ownhouse, he must be

ready to

- reduce the pricebecause the buyerknows you are notpaying a commission

- accept curiosityseekers walkingthrough your house

- spend time onnegotiating andshowing prospectivebuyers the house

. Invite parents orothers who have soldhouses themselves todescribe theirexpeilences. If

they were to do itagain,would theyemploy real

estate Agent?

. Indicate that a buyerusually exerts pressurefor a lower price whena real estate brokeris not involved in thesale. The buyer'srationale is "if abroker handled thesale you would haveto give him a commis-sion, so why not turnpart of the commissionover to me by lower-ing the price?"

65

SOURCE

. "Buying and SellingReal Estate," New

York State BarAssociation, 1 Elk

Street, Albany, NewYork 12207

. Watkins, Arthur Martin,"The Homeowner'sSurvival Kit,"Hawthorn Books, Inc.,New York City 1971.242 pages $6.95

. "You can sell yourHouse yourself if..."Changing Times,June 1972

UNDERSTANDING

- spend time andmoney onadvertising.

. When you t. e theservices of a realestate broker you paya percentage of theselling price as afee. The usual feecharge is 6 to 7percent.

. The advantages ofusing brokers are

- they are expertsin the field andthey usually sellhouses faster

- being familiarwith the marketthey might be ableto get the bestprice possiblefor the house

- brokers advertisethe house at theirown expense

- they take care ofshowing interestedpeople the property

- they will handle

all negotiations forthe sale of thehouse

SUGGESTED pupil. AND

TEACHER ACTIVITIES SOURCE

. Have students preparea classified advertisementfor a house for sale.Take the advertisementto the local newspaperand determine the costof running the ad forfour Sundays in sucession.

. Arrange for a localreal estate brokerto visit the class.Have him discuss thereasons a brokershould be used tosell a house. Havehim outline theservices offeredby his firm and thecommission chargedfor his services.

. Invite a staff memberwho has recently solda house to visit theclass to report onhis house sellingactivity. If he usedthe services of abroker have the staffmember speak to theclass following thereal estate broker sothe students can makea comparision betweenwhat a broker says hedoes and what heactually did for thestaff member.

. Indicate that brokersare in a position toscreen people so theywill only show thehouse to chose peoplewhom they feel arein the market for ahouse.

66

. "Dealing with a RealEstate Broker,"Changing Times, April,1959

Real estate brokersreport that one oftheir big problems inthe person who is notready to buy but wholikes to spend hisSundays "looking."Since this takesmuch of their


- they may be in aposition to helpthe buyer get amortgage.

. If a realtor doesnot sell th househe receives no fee.

. Sellers can arrangefor multiple listingfor his house.Multiple listingmeans more thanone agent will beattempting to sellyour house.

. Another method ofselling is to give

a realtor an"exclusive" for aset period of time.

. It should be pointedout that banks willgive mortgages morereadily when someonespeaks up on behalfof the mortgagor.Since real estateagents can bringbusiness to a bankthey may be in aposition to ask thebank to give amortgage to a personwho might not havebeen given amortgage if he walk-ed into the bank onhis own.

HOW DO YOU CHOOSE A BROKER?

. Contact a local realtorand determine how thecommission is paidif more than oneagent was attemptingto sell the house.

. Point out that anexclusive means thatonly one agent willbe trying to sellthe house. An

"exclusive" usuallyruns 30 to 90 days.Discuss with theclass which methodthey feel is the best -Using multiple listingor giving an agent an"exclusive."

SOURCE

valuable time brokersattempt to screenpeople so that theyonly take aroundpeople who are reallyinterested in buying.

. Choose a broker who is . "Realtor" is a term

a member of the local registered with the

67


real estate board andwho is licensed as areal estate broker.

. Licensed realtorsare bound by acode of ethicsdesigned to maintainhonest dealings withthe public.

. Information on reliablebrokers can be obtainedfrom the local bank,builders, relatives,and friends who haveused the services ofa realtor.

WHAT SHOULD YOU DOIF YOU DECIDE TO SELLTHE HOUSE YOURSELF?

. Do not overpricethe house

- the services ofa professionalappraiser canbe used todetermine thevalue of theproperty.

over-pricedhouses that remainon the market for anextended period aredifficult to sell.

. Contact a local firmthat appraises homesto determine thecriteria used inmaking an appraisal.

68

SOURCE

U.S. Patent Office.A realtor is a memberof the local real?state board and theNational Associationof Real Estate Boards.

. "Want To Sell YourHouse in a Hurry?"Readers Digest,October, 1965

. The president of alarge Philadelphiarealty firm stated,"The value of yourhouse is not whatyou think it is, orthe buyer thinks. It

is determinedchiefly bj thelocation, the neigh-borhood, and thecurrent market."

UNDERSTANDING

. Prepare a factsheet about thehoLse, giving

vital statisticsthat include

- size of house

- size of lot

- annual taxes

- heating bills

- location of nearbyschools, shoppingcenters, houses of

worship

- special features ofthe house such ascopper plumbing,insulation, etc.

. The fact sheet shouldalso include minordrawbacks and flaws,especially if theyare obvious.

. Advertise the housein the best localpaper for real estateadvertising.

. Prepare the house forprospective buyers oymaking repairs whereneeded and paintingas needed.

Getting the hous.!

ready allows you toshow it to the bestadvantage.


. Have ,tudents wholive in privatehouses prepare afact sheet ontheir home. From

the fact sheetscull all thevital statisticsand facts andprepare a modelfact sheet thatcould be used bystudents and theirfamilies at somefuture date.

. Discuss why it isgood psychology tolist flaws, as wellas the good points,in a fact sheetdescribing the house.

. Indicate that peoplewho live in smallertowns and villagesshould advertise inthe newspapers ofthe nearest largecity or town, as wellas the local newspaper.

. Discuss why it isa good sellingtechnique to investin repairs andpainting when youare getting a houseready for sale.

SOURCE

. According to T.R.Kivett, a realtor ofYucaipa, California,"there are lots ofthings you can do tosell a house. Paintit, if possible.Replace loose shinglesor tiles. Fix the

fence and trelliswork,the leaking faucets,


. Sell for the bestoffer.

SHOULD YOU HIRE A LAWYERWHEN YOU BUY OR SELLA HOUSE?

. Real estate trans-actions can be verycomplicated and thehiring of an expert,in this case alawyer, versed inreal estate trans-actions, willserve to protect

your interests.

. Indicate that the askingprice for a house shouldcome pretty close to theselling price if theappraisal was realistic.This means that when the"right offer" comes youhave to be prepared tomove and accept. The"right" offer may bethe first offer andif it is turned down,there may not be anotheras good.

. Invite a lawyer tovisit the classto discuss theservices he canprovide to aclient involvedin a real estatetransaction.

70

SOURCE

creaking floors andloose knobs. Mow thelawn, cultivate theflower beds, prune thebushes, give your placethe well-cared-forlook. Remember yourkitchen is the heartof the home, so keepit spotless; no dirtydishes. Women are alsosensitive about bath-rooms; keep them cleanand orderly. Clearout the clutter in theclosets, basementstairs. And if youhave pets, clear themout, too."

. "Home Buyers Guide,"American Bar Asso-iation, 1155 East60th Street, Chicago,Illinois 60637

UNDERSTANDING

. Some of the servicesrendered by a lawyerare these:

- he interpretslegal phrasing sothat rights andobligations areunderstood by allparties to thetransaction

- conducts a titlesearch to see thatthe title is clear

- checks on anyback taxes andassessments theremay be against theproperty

handles all agreementsregardi,g costs.

WHAT CAN YOU DO TO PROTECTYOUR HOME INVESTMENT?

. Protection for yourhome and personalproperty is availablethrough various kindsof insurance policies.The types of policiesavailable to thehomeowner are

- Standard fireinsuranceprotects againstlosses from damagecaused by fireand lightning.


. Find out the normalfees charged by locallawyers for handlingthe selling or buy-

ing of a home.

TITLE

.ASSESSMENTS

SEARCH0

SOURCE

BACK

TAXES

Uell II a :TO 1 Oil[0:1

,_- -';',i, ice/" (

/!,;:.7.....0, i w .

----.

V!

e--,

, ,....,,v ......_)

(

An attorney may save more than his fees cost.

. Interview parents andfriends to gatherinformation onhome losses thatwere covered byinsurance and thosethat were not.What conclusion doyou draw from thesecase studies?

. Ask students to .

contact a localinsurance companyfor information onfire insurance coverageprovided by thecompany. Have themdetermine rates tosee if rates varyfrom company tocompany. In makingcomparisons among

71

7'1

"A Family Guide toProperty and LiabilityInsurance," EducationalDivision of theInsurance InformationInstitute, 110 WilliamsStreet, New York, N.Y.10038. Free

"Fire-Safety andPrevention; Disasters;Burglary and You; AreYou Protected?"National ResearchBureau, Inc., EmployeesRelations Bureau Corp.,221 N. LaSalle Street,Chicago, Illinois60601

SUGGESTED PUPIL AND


- Fire insurancecan be extended toprotect againstlosses caused bystorms, explosion,riot, aircraftdamage, etc. This

type of coverageis called "extendedcoverage."

- Personal liabilityinsurance protectsyou when someone isinjured on yourproperty. Thepolicy also coversinjuries or damageresulting fromactivities of yourfamily.

- Theft insuranceprotects yourpersonal propertyagainst robbery,burglary andlarceny.

rates be surethat pricesquoted are forthe same type ofcoverage.

SOURCE

. Filmstrip: "Patterns

for Protection."Insurance InformationInstitute, 110

Williams Street,New York, New York10038. 15 minutes.

Color

. When checking thecosts of standard fireinsurance have studentsdetermine the additionalpremium charged forextended coverage.Also determine exactlywhat is covered inextended coverage.

. Invite an insuranceagent to visit theclass to discuss thevarious types ofpolicies availableto the homeowner.Obtain information onwhat is consideredsufficient coverage,and how the companyarrives at the amountto be paid in case ofloss or injury.

. There are neighborhoodswithin communitieswhere it is notpossible to obtaintheft insurance.Have students determinewhether or not theylive in such aneighborhood. If theydo, have them contactthe local insurancecompany to find outwhy this type ofinsurance will not beprovided.

72

SUGGESTED PUPIL AND

UNDERSTANDING TEACHER ACTIVITTES

. A homeowner's insurance

policy is a packagepolicy offering allrisk coverage underone premium.Homeowner policiesinclude coverage forfire, liability, andtheft insurance, plus

cow., age againstdamage from storms,water, and vandalism.

WHAT IS A CONDOMINIUM?

. A condominium may beone building or morethan one building inthe form of a groupof row apartments,high rise buildings,attached singlefamily structures,or a combination ofany of the above.

. In a condominium theindividual ownsseparately his unitin the development.

. Besides owning his

own apartment, theindividual and ownersof other units havean undivided interestin the common areasand facilities inthe project.

. Contact an insurancecompany to find outthe cost of ahomeowner's policyand tne coverageoffered by the

policy. Determinethe cost if eachtype of coveragesupplied in thehomeowner's policy

were purchasedseparately.

. Pcint out to the classthat people who residein apartments may beable to purchase ahomeowner's policyto cover theirapartment.

. Check the realestate section ofthe newspaper forcondominiums forsale. How do pricesof condominiumscompare with pricesof homes having thesame number ofbedrooms?

SOURCE

. "All-in-one Insurancefor Householders,"Changing Times,April 1969

. "FinancingCondominium Housing,"U.S. Department ofHousing and UrbanDevelopment.Washington, D.C.20005

. Explain that individualsare responsible fortaking care of andmaintaining theirown apartments. All

common areas andfacilities aremaintainedemployee; of thecondominium development.For example the

73

8«

SUGGESTED PUPIL AND

UNDERSTANDING TEACHER ACTIVITIES SOURCE

. The common areas in acondominium include

- land upon whichthe developmentis built

roof of thebuilding

- hallways

- lobbies

- parking areas

- community facilities

commercial facilities.

. Condominiums offerspecial advantages tocertain groups.

individual owners ofa unit need not cutgrass or cleancommon hallways,although they areassessed for theseservices.

. Point out inaddition to hismortgage paymentsthe owner of acondominium unitmust pay a monthlymaintenance chargethat goes for allcommon maintenancework (grass mowing,snow shoveling),upkeep of the interiorand exterior commonareas, upkeep ofrecreationalfacilities, trashremoval and otherservices.

. "Condos," Everybody'sMoney, Credit UnionNational Association,Madison, Wisconsin,Summer, 1974

. Write to variousdevelopers ofcondominium projectsand ask for literature.Prepare a chart listingthe various condominiums,their location,purchasing costs, andmaintenance charges,and the facilitiesoffered. Determinewhich appears to bPthe best condominiumbuy.

. Indicate that anincreasingly popularhousing choice bythe elderly is thecondominium. Twofactors, freedom frommaintenance and thepresence of

74

A survey taken by theUrban Land Institute(ULI) showed thenumber one reasongiven for buying acondominium wasbeing tired of payingrent. Close behindwere main- 'enance

freedom and lowercost. Other attractivefeatures were betterenvironment, recre-ational facilitiesand more security.

SUGGESTED PUPIL AND


HOW DOES THECONDOMINIUM OPERATE?

. The individual takestitle to his unit.

Each owner of a unit

has a vote in theassociation thatadministers the affairsof the condominiumafter the developerrelinquishes control,The number of votesyou have depends onhow much yo"" have

invested fo, the

purchase of yourcondominium unit.

. Each owner paystaxes for his unitonly

Each owner may or maynot have a mortgage onhis own unit, dependingon his wishes and hisability to finance thepurchase of his unit,

recreational fa-cilities, are themajor reasons theelderly are

purchasingcondominium units.

:., Make it clear thatthe individual ownsthe unit he livesin the same assomeone owns ahouse they ::ave

purchased.

. Point out that theprices forcondominium unitswill vary withinthe same develop-ment. The price ofa unit will dependon size, location ofthe unit, and otherfactors that wouldmake one unit moredesirable than

another. The personwho pays more for hisunit will have morevotes in the associ-ation that administersthe affairs of theproject.

. Point out that realestate taxes andmortgage interestcharges are fullydeductible tax items.

75

SOURCE

. Provisions for jointownership date backto ancient Roman law;the term condominiumis from the Latinwords meaning"exercising domain

with others."Federal condominiumlegislation wasapproved in 1961.

SUGGESTED PUPIL AND


WHAT FACTORS MIGHT BECONSIDERED WHEN SHOPPINGFOR A CONDOMINIUM?

. When shopping for a:ondominium in a newIwoject the followingire some questionsiou might ask beforeyou buy:

- Can the developergive you a firmcompletion date?

- Is there a sufficientwarranty on thebuilding?

- Do all the recre-ation facilitiespromised inadvertising appearin the contract?

- Is the developerleasing back therecreational facil-ities to the owners,

. Indicate this isa vital question toask, especially ina period of tightmoney and rapidlyincreasingconstruction costs.Both factors can

lead to substantialdelays in completiondates.

. It must be rememberedthe individual ownshis own unit. If

something goes wrongin the apartmentsoon after he movesin,he will want tobe sure the builderwill remedy any andall problems.

. Point out a majorselling point forthe condominium isthe recreationalfacilities offeredas part of thedevelopment. You

would want to besure that thefacilities beingadvertised were infact going to be built.

SOURCE

. Karr, James

"The CondominiumBuyer's Guide: What

to Look for-and LookOut for-In Resort,Residential ,andCommercial

Condominiums ,"

Frederick FellPublishers, Inc.,386 Park AvenueSouth, New York,New York 10016 $9.95

. Look for articlesdealing with theproblems of condominiumbuying. Among the

76

Si.

UNDERSTANDING

making people payrent for whatthey thoughtthey owned?

- Does the developmentmeet with all state andexchange regulations?

- Are there restrictive .

child and petprovisions?

WHAT :S THE HOUSINGCOOPERATIVE?

. The housing cooperativeis a corporation thatis owned and operated 1;,

by its members (calledstockholders).

. The corporation ownsthe property and allbuildings on the

property.


problems arethese:- developmentspromised may notin fact be present

- fees for managementmay escalate rapidly

- the character of thedevelopment maychange rapidly.

It should be emphasizedthat a great ma-ycondominiums aredeveloped for olderpeople. Many ofthese condominiumsprohibit children.Indicate this doesnot mean childrencan't visit andstay with relatives;they just can't livethere permanently.Determine howstudents feel aboutrestrictions on

children.

. Write to a localhousing cooperativeand obtain a copyof its "Articles ofIncorporation." Go

over these with theclass.

. Compare cooperativemembership withcondominium owner-ship. Can you seewhy condominiumownership has hadsuch popularity?

77

SOURCE

. "Let's ConsiderCooperatives," U.S.Department of Housingand Urban DevelopmentWashington, D.C. 20005

. "Coming Together theCooperative Way,"The New Leader, April17, 1972


. Purchasing a stock ina housing cooperativeentitles you to adwelling unit inthe cooperative.

. A stockholder in acooperative does notown the apartment helives in. The apartmentis owned by thehousing cooperative.

. A cooperative'saffairs are handledby an elected Boardof Directors, usuallyresidents of thecooperative.

Each member of acooperative hasm ly one vote

. Cooperative projectsusually containrecreational andcomridnity facilities

for use of allmembers.

HOW DOES A COOPERATIVEOPERATE?

, The Board of Directorsdecides otters thatconcern maintenanceof the project.,

. Attend a meeting ofthe Board of Directorsof a local cooperative.Report on the meetingto the class.

SOURCE

. "A New Look AtCooperatives," PublicAffairs PamphletNo. 487, 301 ParkAvenue, South, NewYork 10016

. For additional infor-mation on cooperativeswrite to The UnitedHousing Foundation,465 Grand Street,New York 10002.

. Visit a localcooperative housingproject and make alist of the recre-ational and communityfacilities that arepart of the cooperative.How do these comparewith similar facilitiesavailable to peoplewho live. in rentalapartments and privatehomes?

. Invite a member ofthe Board of Directorsof a local cooperativeto visit the class todiscuss the role ofthe Board in operatingthe cooperative.

UNDERSTANDING

. The cost of stock toan individual dependsupon the total costof the project, andthe size, location,and type of livingunit desired.

. Each member stockholdersigns an occupancyagreement in which heagrees to pay thecooperative a monthly.carrying charge equalto his share of thesum required by thecooperative to meet

expenses,

. As operating costsvary, the monthly chargesmay be aajusted up ordown to reflect changes.


Obtain pricinginformation from alocal cooperativehousing project andshow how prices varydepending upon size,location and typeof living unitchosen,

. %riff, the discussiona distinctionbetween cooperativesin the private andpublic sector mustbe made. Be sureco point out thatprices for cooperativesin the private sectorare determined by thelaw of supply and

demand. In thepublic. sector prices

are determined bywho built the projectand how it wasfinanced, and there

are income limitsfor people who wishto become members ofthe cooperative.

. It should be pointedout that as conditionsexist it is notlikely that operatingcosts will be goingdown, but they -arelygo up as high as

SOURCE

In cooperativesbuilt with publicassistance in the

form of funds and/ortax abatementspeople earning morethan a specifiedamount of money(amount depends onmonthly carryingcharges and size offamily) cannot becomemembers of the

cooperative. If you

are already a memberof a cooperative andyour income exceedsthe legal limit foryour apartment vouwill be required topay a surcharge. A

surcharge is anextra amount you willbe required to payabove and beyondyour monthly carryingcharges.

. Tne Urban Institute,

a Washington-basedresearch firm, foundthat cooperativeoperating expensesran from 15 to 35percent lower per


. If a stockholderdecides to withdraw,the cooperative hasa 30 day option topurchase the stockfrom the withdrawingmember. If the

cooperative does notact on the optionthe withdrawing membermay sell on the openmarket.

. Subletting may beallowed in somecooperatives.

costs in rentalapartments.

. It should be pointedout that publiccooperatives alwaysexercise theiroption to purchasethe stock of awithdrawing member.

. Explain what ismeant by subletting.Check with localcooperatives todetermine theirpolicy onsubletting.

HOW DOES THE COOPERATIVEDIFFER FROM THE CONDOMINIUM?

. In a cooperative themortgagor is thecorporation; in thecondominium themortgagor is eachindividual owner.

. The monthly carryingcharge in thecooperative is aproportionate share

of all costs includingthe mortgage on thecooperative; in thecondominium the monthlymaintenance charge isa percentage of thecommJn estate costs.Mortage payments onthe individually ownedunit are paid separatelyby the mortgagor.

SOURCE

unit than rentalapartments.

. HUD-FHA Comparison ofCooperatives andCondominium Housing,available from theU.S. Department ofHousing and UrbanDevelopment, Washing-ton D.C. 20005

UNDERSTANDING

. Real estate taxes forthe cooperative areassessed on theproperty of thecooperative corporation;in the condominium onthe individual unit.

. A cooperative memberhas one vote; thecondominium memberhas the number ofvotes representingthe percentage ofvalue of his unitto the total ofall units.

WHAT ARE THE HOMEOWNERSHIPADVANTAGES TO MEMBERS OFCONDOMINIUMS ANDCOOPERATIVES?

. There is no land-lord profit to be

Paid.

. Both cooperative andcondominiums offer taxadvantages to residents.Real estate andmortgage interest canbe deducted from taxreturns.

There is an equityaccr,al where thecooperative or


. Determine howstudents feel

about the votingpolicies ofcooperatives and

condominiums.

. Point out that sincepeople who live incooperatives andcondominiums arein effect "owners,"their monthly costsdo not includelandlord profits.

. Contact localcooperatives andcondominiums to findout the averageyearly amount theirmembers deduct forreal estate taxesand mortgageinterest Obtain

the same informationfrom people who owntheir um homes., How

do the amounts compare?

81

SOURCE

. Studies made by theU.S. Department ofHousing and UrbanDevelopment show thatnot having to pay alandlord's profitresults in a reductionof 10 percent ormore in monthlyhousing costs.


condominium is success-fully operated.

. There are reducedmaintenance costssince owners takebetter care of theoverall property.

WHAT IS A MOBILE HOME?

. A mobile home is acomplete home designedfor year round livingwhich is shipped infinished form on astructural frame, withwheels and brakessimilar to a traveltrailer.

. It can be transportedto a homesite whereit is connected the

necessary utilities.

. A mobile home isdesigned and builtfor use as a permanentresidence. It cannot

. Ask students tovisit a localrental housingdevelopment anda local cooperativeand/or condominium.Have them report onthe physical appear-ance of each projectvisited. Whatconclusions can bedrawn from theirvisits?

Check the localdirectory forlistings of mobilehome dealers.Write to a dealerrequesting infor-mation on the homesavailable.

SOURCE

. "Mobile Homes," aPamphlet prepared bythe Council of Better-Business Bureaus, Inc.,in cooperation withthe Mobile HomesManufacturing Associ-ation. For a copywrite to Council ofBetter BusinessBureaus, 1150 17thStreet N.W., Washing-

ton, D.C., 60631.

. Visit a mobile home . "Mobile homes have apark, if there is one reputation for beingin your community, poorly constructed,and obtain first and horlly. A recenthand impressions as report prepared byto the desirability the Taliesin Associ-of living in a mobile ated Architects ofhome from residents of the Frank ilovdthe park. Determine r'oundation

the feelings of the describes the mobilestudents based on their hoce as a 'jarringown observations. intrusion on the

. It must be made clearthat while a mobilehome can be moved fromone site to another

82

landscape, still a

'Fox' in spite ofiTprovements."Everybody's Money,Credit Union, NationalAssociation, Madison,Wisconsin

UNDERSTANDING

be pulled by anautomobile,


it is not designedto be towed behinda car as is aregular trailer.When a mobile homeis to be transported,it is transported bya specially con-structed truck.

There's no place like home.

WHAT ARE THE SIZES ANDTYPES OF MOBILE HOMES?

. Mobile homes areavailable in a number

of lengths. Due to thefact that they must betransported over thehighways, widths areusually restricted to12 feet.

Point out that manystates have lawsregulating lengthas well as widthof mobile homesthat can be movedon highways. For

this reason the

SOURCE

Everybody's Moneyhas received lettersfrom readers tellingof walls that havepopped out in transitand of deadly flashfires started inmobile homes.

'A Nader-related group,The Center for AutoSafety, is publishinga report on mobilehomes later thisspring. The grouptook up the studybecause of complaints

from owners. The

most frequent gripe,according to directorLowell Dodge, con-cerned poor construc-tion, and in partic-ular, leaky roofs.One woman, he said,had logged how manygallons of water shecollected during eachrainstorm. Anotherconsumer complainedof wind leaks: 'A

Kleenex held in frontof the electricaloutlet would blowhorizontally.''Everybody's Money,Spring 1974, CreditUnion NationalAssociation, MadisonWisconsin

. Buying and Financinga Mobile Home," U.S.Department of Housingand Urban Development.Can be ordered fromConsumer Information,Public DocumentsDistribution Center.


single wide A singleunit 12' wide by 65'long having 744 squarefeet of living spaceis a popular size.

- expandable - have"additions" whichtelescope insidethe home during hiway movement."Additions" can addup to 100 square feetof additional livingspace.

double wides Twosingle units built andtowed separately tothe site and therejoined together tomake one living unit.The two parts can beseparated if towingto a new locationbecomes necessary.

WHAT IS INCLUDED IN THEBASIC PRICE OF A TYPICALMOBILE HOME?

. A typical mobile homecontains

- a living room

- complete kitchenwith appliances

- a dinette

- one or two bathrooms

- one, two, or th-ee

bedrooms

3 -foot towing hitch

is usually quotedin the overall

dimensions of thehome. The 3 feetshould be excludedwhen measuringactual living space.

. Measure the dimensionsof every room in yourhome or apartment,and get the totalsquare footage ofliving space. Howdoes this compare tothe living space in asingle unit? expandable,or double wide unit?

SOURCE

Pueblo, Colorado81009

It should be made clearthat local zoningregulations have muchto do with the typesand sizes of mobilehomes available in anyspecific place.Contact a local mobilehome dealer and askhim to outline thelocal zoning regulationsdealing with mobile homes.

. Visit or write to adealer of mobile homesand obtain pricesand descriptiveliterature for themodels available.How do the pricescompare with theprices for regularhouses?

84

9 2

. "Mobile Homes,"

Family Economic Review.Consumer and FoodEconomics Institute,Agricultural ResearchService, U.S. Depart-ment of Agriculture,December, 1972

UNDERSTANDING

- cabinets and closets

- heating system

- water heater.

. Most mobile homes are

sold completelyfurnished anddecorated.

Optional equipmentthat can be purchasedincludes air-condition-ing, laundry equipment,dishwasher, garbagedisposal unit, andcentral vacuum cleaningsystems.

. Mobile homes can beobtained for gas orelectric operation.

. Other extras thatcould be purchasedinclude

- steps with handrails

- skirting to conceal

wheels

- supports to provide

a foundation thatwill hold the homestable and level.

WHERE CAN YOU PUTA MOBILE HOME?

. Mobile home parks


. Obtain informationon the cost ofthe optionalequipment listedand determine howmuch would beadded to the costof the home ifeverything listedwas purchased.

. Indicate that the

use of extras isdesigned to makethe mobile homelook less a mobilehome and more a

permanent structure.For example, manymobile home parksrequire 'Arting

around the base ofthe mobile home.

Point out there aremore than 15,000mobile home parksin the United States.Check with a mobile

33

SOURCE

. Most mobile homes arebuilt to establishednational standards.The standards weredeveloped by tree

American NationalStandards Institute(ASNI) and are calledASNI Standard A119.1for mobile homes. ASNIA119.1 has been de-signed to protect thesafety and health ofthe mobile home owner.Mobile homes financedthrough the FHA or theVA must be built ac-cording t A$N1Standard A119.1.

. "Even though you caneasily buy a coff_epot or electric knifewith a one-yearwarranty, the generalpolicy of the mobilehome industry is towarrant their productsfor only 90 days after

delivery. Some

companies have one-year warranties, whichare required if you

finance the home witha VA or FHA loan.

.1711e appliances in the

home are under thewarranty of eachmanufacturer. Terms

may run to five years."Everybody's Money,Spring 1974

New York State haspassed a statuteaffecting the rightmobile park ownershave to evict park

SUGQESTED PUPIL AND


- Mobile home parks have

available to tenantshook-ups for water,gas, electricity,and waste systems.

. A mobile home can beplaced on your ownlot, When it isplaced on your ownlot it is necessaryto provide for gasor electricity,sewage, and water

systems.

CAN YOU FINANCE THEPURCHASE OF A MOBILE HOME?

. Financing a mobilehome can be done inthe same manner asfinancing anautomobile,

park in your areaand obtain infor-mation as to rentfor a site forthe different typesof mobile homes.Also determine whetherthe park has rulesdealing with theappearance of themobile home.

. Check with a mobilehome dealer for thecost involved intransporting amobile home,

. It should beemphasized that itis vital to checklocal zoningregulations beforea mobile home isplaced on yourown lot. Manycommunities forbidthe use of mobilehomes in any areaother than a mobilehome park, Check

:to see what thezoning regulationfor mobile homes isin your community.

, Check with local

banks or savingsand loan associationsto determine theirpolicy towardsmaking mobile homeloans, If they do

86

9,i

SOURCE

residents. Underthe law the ownermust show cause andthe statute restrictseviction to case:where the tenantdefaults in his rent,goes bankrupt, usesthe premises forillegal business,

breaks the terms ofthe lease, orpersistently violatespark rules. From

Consumer Reports,October, 1973

. "Because of anegative publicattitude towardmobile homes, findinga good park is oftendifficult. Strict

zoning laws andbuilding codesrestrict parks tocertain areas. And

local laws may prohibityou from placing yourhome on your own land.As a result, mobilehome families areoften forced to livein overcrowded,rundown, poorlylocated and poorlykept locations."Everybody's Money,Spring 1974

. "Your initial outlayfor a mobile homewill no doubt be alot less than ifyou buy a conventionalhome. A mobile homecosts as li'tle as

UNDERSTANDING

. Financing can beobtained from local

lending institutions.

The U.S. Departmentof Housing andUrban Development(HUD) will insure

loans made formobile homes ifcertain conditionsare met

the maximum dollaramount insured is

$10,000 for singleunits and $15,000for double units

maximum term ofloan Is twelveyears for asingle unit;fifteen yearsfor two or moreunits.

WHAT ARE THE ADVANTAGES ANDDISADVANTAGES OF MOBILEHOMES.

. The most significantadvantage of themobile home is itsprice.

- mobile homes canbe purchased forless than $10,000for a single unit.

SUGGESTED PUPIL AND

TEACHER ACTIVITIES

make mobile homeloans, get infor-

mation as to theconditions underwhich a loan wouldbe granted.

. Price is such asignificant factorthat more than 20%of all new housingunits built are

mobile homes.

. Compare the priceof a fully equippedsingle unit mobilehome with the priceof a two bedroomone family housein your community.

. Point out the totalcost of a mobilehome is lower because

87

SOURCE

$6,000 to $7,000 oras much as $20,000or more.

"But initial priceisn't the onlyconsideration. It's

a commonly acceptedfact that whereas aconventional homeappreciates in value,largely because ofthe land it sits on,

a mobile homedepreciates. Eventu-ally, the buyer of aconventional homeusually ends up withconsiderable assets,while the mobile homebuyer does not." Ibid

. "Mobile Home FinancingThrouah HUD," avail-able from U.S. Depart-ment of Housing andUrban Development,Washington, D.C.

The 1970 Census ofHousing showed thattwice as many mobileho es were locatedin rural areas asopposed to urbanareas; most of themobile homes werelocated in thesouthern and westernparts of the country;30 percent of themobile homes wereowned by people 25years, of age and less;only 2 percent of themob,--,2 homes housed

families of four or

SUGGESTED PUPIL ANDUNDERSTANDING TEACHER ACTI"ITIES

. Mobile Homes can betransported to anew site should theowner decide torelocate.

. A disadvantage ofthe mobile home isthat it tends todepreciate rapidly.

This results inlower resale value.

. Many communities,particularly thosein metropolitan areas,prohibit mobile homesor they are severelyrestricted.

. Mobile homes tend tobe less satisfactoryfor large familiesthan apartments orhouses designed forthe same size family.

WHAT ROLE ONES GOVERNMENTPLAY IN PROVIDING HOUSING?

. Housing help bygovernment (Federal,state, and local)ranges from "publichousing" for 'the

working poor and welfarefamilies to rent-subsidiz.kg housing for"moderate" and "middleincome" families.,

the mobile generallyhas a smaller floorarea and becausethe sales price doesnot include theprice of the lot.

. Discuss what type ofperson is likely topurchase a mobilehome. Have studentsgive their reactionto mobile homes asa permanent livingarrangement.

. Check with a mobilehome dealer and makecomparisions betweenthe price of a newhome and a usedhome.

88

(1 r...i h

r'.

SOURCE

more and only 1percent of the homeswere owned by peopleearning more than$15,000 a year.

. "For a lot of familiesa mobile home is theanswer to the highprice of housing.

"It's estimated that

the industry nowaccounts for 67percent of all newsingle family dwell-ings selling forunder $25,000 andalmost all the marketbelow $15,000."Everybody's Money,Spring 1974, CreditUnion NationalAssociation, Madison,Wisconsin

"A mobile home vs. a,house: How the CostsCompare," Changing

Times, January 1971

. "Housing is Everyone'sProblem." Ibid

UNDERSTANDING

. To be eligible forPublic nousing helpore us t be belowthe povcrty level.


. Check with localhousing agencies tofind out how eligibilityfor public housing is

determined.

To be eligible formoderate income projects,earninas cannot be more:Par 35: ir excess of what

a person in publichousing earns.

. To be eligible formiddle-income 'ousing,total irco7e cannotbe r-ore than six orseven tines tne rentor carrying chargesof the apartment.

Vt'AT SOLE "NE -E CEDE

GOV=PAYE7 PAYED?

. The Federal governmenthas a continuinc programof public housingfinancing, construction,and :-.?naoe7ent.

. Prepare a list of allpublic, moderate incomeand middle-incomedevelopments in the

community. Include inthis listij location,rental or carryingcharges (if it is acooperative), and howto go about makingapplioat'on. This

listing could beduplicated anddistributed.

. Government insured loansenable low and moderateincome families to purchasetheir pwm homes.

. Pent subsidies allowingIcw income people tolease apartments inprivate buildings areavailable tnroughlocal government.

SOURCE

. "The Housing ProblemSymbolized," Citizens'

Housing and PlanningCouncil of New York,Inc.,20 West 40thStreet, New York,

New York 10018

Contact the local housingauthority to find outif your communityoperates a program ofleased housing inprivately ownedbuildings that is

89

97

SUGGESTED PUPIL AND


- Subsidies under thisprogram are alsoavailable to low-income familieswho want topurchase theirown home.

paid for with asubsidy from theFederal government.

. Have pupils inquirewhether theirparents nr friends

have receivedgovernment help topurchase homes. If

so, what were theirexperiences withthis help?

. Under a program calledthe Hope Plan, amortgage-assistanceprogram is availableto middle-income families.

Under the program the

Federal governmentpays a portion ofthe monthly mortgagepayment for five years.

This help is provided .

only with mortgagesobtained from localsavings and loansassociations.

. In addition to providingvarious forms of finan-cial assistance, the

Federal government, underthe terms of the FairHousing Law of 1968,assures equal opportunity

Contact a local

savings and loinassociation to findout if assistancein this program isoffered in yourarea.

90

98

SOURCE

. Information about

subsidy programscan be obtained fromthe Service Center,Room B-258, Depart-ment of Housing andUrban Development,Washington, D.C.?0410. For people

!ri small towns andrural areas informa-tion can be obtainedfrom the nearestoffice of the FarmersHome Administrationor by writing to theDepartment ofAgriculture, Wash-ington, D.C. 20250.

. Information on the

Hope Plan can beobtained from theFederal Home LoanBank, Washington,D.C. 2052.

. The following pamphletsdealing with equalopportunity are avail-able from the Depart-ment of Housing andUrban Development,Washington, D.C.

SUGGESTED PUPIL AND

UNDPRSTA.NDING TEACHER ACTIVITIES

for all in hou,3ino

. The Fair Housing LawProvides prote:Aionagainst the followingacts, if they arebased on race, colreligion, ornational origin:

- refusing to sell orrent to, deal, ornegotiate with anyperson

- discriminating interms or conditionsfor buying orrenti.ic houses

- discriminatilo byadvertising thathousing is availableonly to persons ofa certain race, color,religion, ornational origin

- denying that housingis available forinspection, sale, orrent when it reallyis available

Persuading owners tosell or rent housingby telling them thatminority groups aremoving into aneighborhood,

- denying or makingDifferent terms orconditions for homeloans by commercialfencers such as Panks,savings and loan

. It should be pointedout that the existenceof a law does notnecessarily meanthat all discrim-iration in housinghas been eliminated.Determine studentreaction to theeffect of the FairHousing Law. Haveany of them hadProblems of discrim-ination? If so,

from whom were theyable to obtain help?

. Point out that theterm used todescribe thisaction iscalled "block-bustino." Explainhow blockbustinqcan be used tomake huge profits.

91

99

SOURCE

. "Fair Housing Lawsand Other FederalCivil Rights Lawsand Executive OrdersRelating to thePrograms of the U.S.Department of housingand Urban Development."

. "Fair Housing: WhatIt Means To You."

. "Fair-Housing - U.S.A."

. "Your Housing Rights:Live Where You Wantto Live."

SUGGESTED PUPIL AND


associations, andinsurance companies

- denying to anyone theuse of or participa-tion in any realestate services suchas brokers' organiza-tions, multiple list-ing services, or otherfacilities related tothe selling or rentingof a house.

. Complaints, under thelaw, can be made in anyof three ways.

- The complaint can bemade directly to HUD.

- The individual cantake court action bytaking the complaintdirectly to the U.S.District Court, orstate, or local court

- Complaints may alsobe made to theoffice of theAttorney General.

. Discuss how multiplelisting services canhelp in the selling orrenting of a house orapartment. Havestudents visit a local

real estate office tosecure copies ofmultiple listingofferings available.

When making acomplaint to HUDit should be addressedto Fair Housing c/oof the nearest HUDregional office orto Washington, D.C.

. Emphasize thatcomplaints takendirectly to courtmust be made within180 days of the

. alleged discriminatoryact.

SOURCE

. The regional officefor HUD dealing withNew YorK State islocated at 26 FederalPlaza, New York, NewYork 10007. Areaoffices are locatedin New York City andBuffalo. For theaddress of the areaoffice look in thetelephone directoryunder Federal Housing,Administration.

. Invite a representativeof local HUD office tovisit the class todiscuss the Fair HousingLaw.

WHAT IS NEW YORK STATEDOING IN THE FIELD OF HOUSING?

. The New York StateDivision of Housing andCommunity Renewaladministers a comprehensive

92

SUGGESTED PUPIL ANDUNDERSTANDING TEACHER ACTI'iiTIES

program of technicaland financial assistancefor community developmentof housing.

. Any municipalitydesiring assistanceunder a programadministered by theDivision of Housingand Community Develop-ment must do so at itsown initiative.

. Middle-income housingin the state isdeveloped under theLimited Profit sousingCompanies Law and theLimited DividendHousing Companies Lad.

- The Limited ProfitHousing CompaniesLaw, popularly knownas the Mitchell-Lamalaw, enables sponsorsof rental andcooperative housingto receive long -termlow interest mortgageloans of up to 95percent of a project'cost.

Have students checkwith the localhousing authorityto deterTine whathousing programsrave beer or arebeing built withstate aid.

SOURCE

. "New York State Housingand Community Develop-ment Programs,"pamphlet availablefrom the Division ofHousing and CommunityRenewal, Two WorldTrade Center, NewYork, New York 10047

. Make it clear that thestate does not buildthe nousing but theterms of the lawprovide incentive toprivate sponsors andnon-profit organizationsto build middle-incomehousing.

Have students preparea listing of theMitchell-Lama develop-ments in your community.Make a crimparison of

the rentals or carryingcharges in Mitchell-Lama housing orojectswith the charges forsimilar housing in theprivate sector.

- The Limited DividendHousing Companies Law

grants privatebuilders taxexemptions andcondemnation

Discuss w'ny the power

of conder-ration isimportant wnen abuilder is trying toout together a parcelof land upon which topuild.

. This program, whilestill on the booksas law, has not beenused in recent years,having been super-seded by the LimitedProfit Housing Program.


power to encouragethe building ofmiddle-incomehousing. In

return thebuilder agreesto limit theprofit on hisinvestment.

. The Capital GrantLow Rent Assistanceprogram provideslow-income familieswith housing inregulated middle-income housing

developments.

- Under the programthe state HousingFinance Agency subletsapartments, in middleincome developments,which it rents tolow-income familiesat rentals approximat-ing prevailing publichousing rents in thesame community.

Under the programfamilies must pay atleast 20 percent oftheir income for rent.

As a family's incomeincreases, the amount

of the rent supple-ment being paid

by the statedecreases.

Presently, under thelaw, Vietnam veteransreceive preference.

. Indicate that anyMitchell-Lama projectbuilt since January 1,1965, is required,

as a condition oftheir Mitchell-Lamaassistance, toaccept Capital Grantfamilies if thecommissioner ofHousing and CommunityRenewal asks them to.

. Almost all of thefamilies receivingassistance under theprogram reside inprojects in New YorkCity. Have studentscheck with the localhousing authority todetermine how manysuch families thereare in your community.If the answer is "none"attempt to find outthe reason why.

SOURCE

Powledge, Fred,"New York State'sCapital GrantProgram - Low IncomeFamilies in Middle-Income Housing,"available fromCitizens' Housingand Planning Councilof New York, Inc.,20 West 40th Street,New York 10018

. In an article in theJournal of Housing,January, 1974, it is

reported that a totalestimated value ofmore than half abillion dollars inlow- and middle-incomehousing constructionwas begun, continued,or completed throughstate-administeredprograms during 1973.

. Have students check withthe Housing FinanceAgency to find out whatchance a low-income

94

1(12

SUGGESTED PUPIL AND


family has ofreceiving CapitalGrant Low RentAssistance if ncmember of thefamily is aVietnam veteran.

. The Housing DevelopmentFund encourages theconstruction of lowincome housing bygranting interest-freeloans to qualifiednonprofit housingcorporations to coverarchitectural, legal,and other preliminarydevelopment costsincurred prior to theavailability ofmortgage funds.

. The state sells voter-approved public housingbonds to finance lowrent public housingprograms.

- The state grants localhousing authorities anannual cash subsidy tomake up the differencebetween the rents collectedand the cost of operatingthe project and debtretirement. The communitymatches the state's subsidythrough real estate taxexemption and with cash,if necessary.

. The state is alsoinvolved in the Urban

Renewal program underthe Federal Title IProgram.

- The Federal govern-ment pays three-quarters of an urbanrenewal project cost

. Check with localhousing boards todetermine whaturban renewalprojects are beingdeveloped in the

community. Find outhow a family can becomeeligible for an apart-ment in an urban

95

SOURCE

"Programs for UrbanGrowth." New YorkState Division ofHousing and CommunityRenewal. Availablefrom the Research andInf,rmation Bureau,New York StateDivision of Housingand Community Renewal,

UNDERSTANDING

and the state paysup to one-half thebalance. Local fundspay for the balance.The local, stateand Federal contri-butions make up thedifference betweenthe cost ofacquiring and clear-ing an area's slumproperties and thelower price forwhen the clearedsite is resold todevelopers.

. Under the New YorkState HOPE (Home OwnersPurchase Endorsement)program loans are madeto people who do nothave the money topurchase stock incooperative housingdevelopments.

. In addition to theprograms providingassistance for thebuilding of housing,the state has a numberof codes designed toinsure the utilizationof sound constructionthat will make housingsafe and comfortablefor the occupant.

. The State BuildingConstruction Code setsstandards of whatbuilding constructionmaterials should meetand allows the use ofany materials that meetsthese standards.


renewal project.

. The planning of anurban renewal projectusually generatesmuch debate. If a

community is involvedin such a debate,invite a proponentand opponent of theproject to visit theclass to discusstheir viewpoints.

SOURCE

393 Seventh Avenue,New York 10001

. For detailed infor-mation on the HOPEprogram contact theNew York State HousingFinance Agency. Check

local telephonedirectory for address.

. The State BuildingConstruction Code isaccepted voluntarily bymunicipalities. Check

to see if your communityrequires builders toabide by the code. If

so, obtain a copy ofthe code and go overits provisions in class.

96

SUGGESTED PUPIL AND


. The State Model HousingCode is a guide tomunicipalities inmeeting the housingregulations under theFederal and State urbanrenewal and hcusingprograms. The codesets standards for themaintenance andoccupancy of homes andapartments, hotels andmotels, mobile andrecreational homes andhome parks, and migranthousing premises.

. The Mobile Homes Codegoverns the constructionand installation ofmobile homes andestablishes statestandards similar tothose that protectresidents of conventionalhousing under the StateBuilding ConstructionCode. not subject to the

regulations.

. Obtain a copy of theModel Housing Codeand go over theprovisions with theclass. Discuss howthe code affectseach individual.

. The Mobile Home Codebecame effective in1974. It applies tonew mobile homessold, offered for sale,or moved into New YorkState. Mobile homespurchased prior to1974 and located inNew York State are

. The New York StateDivision of Housingand Community Renewal isresponsible for theadministration of theState's residential rentcontrol laws outside ofNew York City.

WHAT IS BEING DONE TOPROVIDE ADEQUATEHOUSING FOR ELDERLY?

. Many of the nation'selderly live in less thanadequate housing.

97

1.41fi

SOURCE

. Refer to page 31for discussion onrent control

. A report by theDepartment of Housingand Urban Developmentindicates that "Over1.6 million elderlylive in housing thatlacks basic plumbingfacilities. They pay

SUGGESTED PUPIL AND


. Federal programs to

insure adequatehousing for theelderly include

- liberal mortgageinsurance for

privately-financedhousing

- help to localhousing authoritiesto provide for theelderly in publichousing projects

- subsidies to bringdown mortgageinterest rates

- rent supplements.

. The Federal governmentoffers loan guaranteesto provide for thebuilding of nursinghomes.

. Determine if yourcommunity has anyprograms to helpthe elderly secureadequate housing.If such programs arein effect find out

how a person canbecome eligible forthe program.

. Invite a seniorcitizen to the classto discuss theproblems the elderlyface in sect inq

adequate housing.

SOURCE

a disproportionatepercent of theirfixed incomes forrent or homeownershipcosts."

. "A Report to OlderAmericans," U.S.Department of Housingand Urban Development,Washington, D.C.

. Retirement homes andhotels," ChangingTimes, March 1973

. Under Section 232(Nursing HomeInsurance Program)of the NationalHousing Act theFederal governmentwill guaranteemortgage loans, upto 90 percent, forthe building of newnursing homes or forrehabilitationprojects involvingexisting nursing homes.


. New York State, underthe provisions of theEmergency TenantProtection Act of 1974,allows cities, towns,and villages to grantexemptions from rentincreases to peopleover the age of 62where the annualincome is $6,500 orless a year.

. The Empire HousingFoundation, establishedby the state in 1967,is designed to stimulateparticipation by non-profit sponsors instate programs toprovide housing forthe aged.

. Government on thelocal level is also

involved in providingadequate housing forthe elderly.

. New York City hasspecially designedapartments for theelderly. Specialfeatures of theseapartments includenon-skid tile floors inbathrooms, automaticshut-off devices on gasranges, grab-bars overbathtubs, windows whichcan be raised or loweredeasily, electric outletslocated 24 inches abovethe floor, and extralarge radiators toprovide more heat inwinter.

Contact the office ofthe State HousingCommissioner to findout how successfulthe Empire HousingFoundation has beenin promoting thebuilding of housingfor the elderly.

. Emphasize that thedemand for speciallydesigned apartmentsin New York City farexceeds the supply.If specially designedunits are not avail-able, the elderly

who qualify will

be housed instandard apartments.

99

SOURCE

. Information on housingfor the elderly inyour community can beobtained from thelocal housina

authority.

. For detailed infor-mation on housina forthe elderly in NewYork City write tothe New York CityHousing Authority,5 Park Place, NewYork, N.Y. 10007

SUGGESTED PUPIL AND


WHAT SHOULD YOU KNOWABOUT BUYING AVACATION HOME?

. More than 2 millionAmericans own avacation home inaddition to theiryear-round residence.

. The turning of rurallaid into vacationcomunities hasbecome a multibilliondollar business.

. Most vacation homesare sold through salesPresentations in yourhome community.

. The sales techniquesmost used to promotevacation home salesinvolves the offering

of free dinners andfree trips to thevacation home sitefor the prospectivebuyer

According to theU.S. Office of Inter-state Land Sales,some unfair tacticsused by uncrupulousland developers include

- misrepresenting thepresent and futureva.lue of a piece ofproperty

- exaggerated promisesof refunds to un-satisfied customers

. Discuss the dangersinvolved in buyinga vacation homehundreds, and insome cases toousands,of miles from youryear-round residence.

. Discuss the psychologyof giving someonesomething for nothingas a selling technique.Have students indicatehow they would feelabout making a purchaseif the seller providedhim with a free tripto the vacation homesite.

. Indicate that manydevelopers require youto come to the vacation

100

SOURCE

. "Vacation HomesA Boom With Pitfalls,"U.S. News and World

Report, August 14,

1972

. Buying vacationland-nine ways notto get stung,"Changing Times,August 1973

Buy a vacation placeall your own?"Changing Times,August 1971

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home site to obtaina refund. In someinstances the site

7ipht be so far fromyour home it wouldcost you as much toget there as youleft for a deposit.

. Emphasize the importanceof having everythingtnat is offered orpromised written inany contract that issigned.

Explain how "baitand switch" operates.

it should be madeclear that a buyershould never waivehis or her rightswhen making apurchase. The

cooling-off period,which is reouiredby law, is designedto give a persontime to think over~is actions sway

from the pressurebeing exerted by anoverzealous salesman.

. Check the real estatesection for leads on

vacation home

101

SOURCE

. HUD reports that the48-hour cooling offwaiver may be writteninto a contract; soit is very importantto read the contractbefore it is signed.

. The head of theFederal Office ofInterstate Land Sales

UNDERSTANDING

pertinent documentsand take them hometo read.

. Don't make anyhasty decisions.


oimmunities. Write

to thF! developer

in a copy

o PropertyReo.rt" and otherpe, i:inent documents.

Go over this infor-mation with the class.

SOURCE

Registration reportedthat "thousands arecheated... only thetip of the icebergis just now beginningto be seen. Thousandsof people every weekare being misled orcheated when buyinglotq for recreational,retirement or invest-ment purposes."

. Indicate that onepressure tactic usedis to indicate thatthe home you areinterested in mightnot be available tomorrow.

. Check HUD's Office .

of Interstate LandSales for furtherinformation abouta development.

. Get legal advice ifthe investment. issizeable

. Don't waive or cancelthe 48-hour "coolingoff" period.

Make a list of vacationhome developments fromthe real estate sectionand write to the Inter-state Land Sales officefor information on thedevelopments.

. It should be madeclear that because adeveloper is registeredwith HUD, it shouldnot be assumed thatthe government hasinspected or approvedthe project. It

has not.

102

I in