Postwar. Laura McEnaney

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      Figure 2. 400 West Elm Street, shown in 1966, illustrates the kind of multifamily housing typical of the area during World War II. The Brugger–La Dolce building, located just across the street, was similar but had two storefronts that had been converted to apartments during the war. This apartment building style emerged in Chicago in the 1880s, and the La Dolces’ commercial-residential structure became more common in the early twentieth century. Courtesy Chicago History Museum, ICHi-039051, Sigmund J. Osty.

       Price Controls in the Postwar City

      The story of how Brugger, the La Dolces, and their disgruntled tenants locked horns over the bread and butter issues of demobilization starts in Washington, DC, at the Office of Price Administration (OPA). The paper trail begins here because World War II effectively put the federal government in the business of apartment management. The need to forge what one historian calls a “connection between the city and the sword” brought the national state deeply into municipal affairs.¹⁸ Well before U.S. forces fired a shot, defense planners pondered how to harness the resources and capacities of American cities for military production. They understood that housing had to be part of their careful calibration of production and consumption. Apartment housing was of particular concern given the potential for rent inflation, a destabilizing factor in any wartime economy. Rising rents would pressure employers to raise wages, and workers would simply hop to the next city if they could not earn enough. Price controls had been tried before in the United States, in a haphazard and decentralized way during the American Revolution, and to a lesser extent during the Civil War. By the outbreak of World War I, a more centralized state was able to administer controls nationally, but the Woodrow Wilson administration kept a small operation, focusing on the production side, as that could be managed with a minimal staff.¹⁹

      Familiar with the small state template of World War I, President Franklin D. Roosevelt’s planners experimented first with voluntary “fair rent committees,” appointed boards of real estate, labor, civic, and military representatives who were to simply steer landlords’ pricing toward market fairness. Formed in the months before Pearl Harbor, over two hundred committees in thirty-four states tried to contain rent hikes as the country ramped up for war. But they failed to cajole, harass, or even shame owners into voluntary compliance. “Appeals to patriotism, reason, civic pride, and a sense of fair play had their limits,” says one historian, and even with “pressure techniques reminiscent of political machines” (which Chicagoans would have certainly been familiar with), the fair rent committees could not persuade landlords in American cities to hold prices steady.²⁰

      After Pearl Harbor, however, what was voluntary became regulatory. “War, that prolific parent of legislation,” as one legal scholar put it, spurred Congress to pass the Emergency Price Control Act in January 1942, vesting the federal government with the power to first stabilize and then regulate prices, including rent.²¹ The act empowered the OPA to set rents at levels before any defense-related stimulus might have artificially inflated them. So, for example, an OPA number cruncher would go to Baltimore to determine a date before which the mobilization started to affect prices in that city and then set a price ceiling pegged to that date. In effect, prewar rates would determine wartime prices. To implement what it called this “maximum rent date,” the OPA created the “defense rental area,” a county (or cluster of counties) where it was evident that war production would have a deep impact on the economic landscape. If a building fell within that boundary, its landlords had sixty days to bring rents into line with rates set on the maximum rent date.

      OPA officials hoped for early and easy compliance, but the Emergency Price Control Act ensured they would get it. To monitor landlords’ behavior, the OPA sent them a fairly detailed form that required them to record the size, features, amenities, and pricing history of each unit in a building—even if currently vacant. The landlord had to complete this registration form in triplicate, mail or bring the copies to the local rent control office, and then share a copy with the current tenant. Anytime an apartment changed hands, the law required the landlord to reregister it, show the new tenant the form, and get the new tenant’s signature in two places. This whole process was separate from a regular lease. It may not surprise us, then, that landlords and building managers got crabby. Rent control meant paperwork and more legal accountability, not just to extant city codes but also now to federal law. The number of buildings affected by rent control—and thus the OPA’s own paperwork—mushroomed in the months after Pearl Harbor. In March 1942, the OPA designated 20 defense rental areas in thirteen states, and by the next month, 302 were added to the list. Each “area” included several adjacent counties, so by 1946, a total of 1,232 counties had been placed under rent control, which meant that fully three-quarters of Americans lived in places where rent was controlled. The OPA estimated that rent control had covered more than 85 million people during the war, and even more, the OPA continued to add new defense rental areas as the war ended, eventually exceeding 600 in 1947, two years after VJ Day. This reach is astonishing, but the rationale was simple: to prevent what the OPA called an “inflationary bonfire” on rents and all other consumer prices.²² Sensible controls meant defense contracts fulfilled, owners compensated, workers appeased, and loaded bombers flying east and west.

      The OPA itself did not survive past 1947, however, and as we will see, its political demise was embroiled in a larger debate that will sound familiar to today’s readers: how big should government be and what should it do? Rent control, the OPA’s most interventionist program, did endure, partly because everyone across the political spectrum recognized that the housing crisis had outlived the war. It remained, too, because of a desire among all constituencies—whatever their partisan leanings—to cushion the veterans’ reintegration. In fact, it was this concern for veterans’ needs that spawned a new agency that would ultimately absorb the OPA’s rent control service. In May 1946, Congress charged the new Office of the Housing Expediter (OHE) with coordinating reconversion housing programs, especially mortgage assistance for returning GIs. This was, of course, part of the famed GI Bill, the veteran assistance program that helped the (mostly white) “greatest generation” go to school, find jobs, and move to the suburbs.

      As the OPA gradually dissolved from 1946 through 1947, the OHE picked up its busy rent control business, effectively lifting a wartime regulation and dropping it into a postwar housing agency. This transfer of functions put rent control back on life support, but now under the auspices of the federal Housing Expediter. The Housing and Rent Act of 1947 (and its yearly renewal) acknowledged that although the war was over, there was still “a housing emergency” that required “certain restrictions on rents” to continue. Thus, the OPA, and then the OHE, stayed on the job from August 1945 to as late as the spring of 1953, charged with determining and enforcing a “fair price” for urban tenants.²³

      With rent control the law by mid-1942, the OPA had to set up shop in every defense rental area to fulfill its mandate. In large cities, from Los Angeles to New York, and in smaller outposts, like Fargo, North Dakota, or Peoria, Illinois, the area OPA (and then OHE) remained as the contact point between federal law and local experience. They were the branch offices of regulatory governance, the place where owners, building managers, and tenants would negotiate their conflict. Chicago proved to be one of the OPA/OHE’s most important locations. Although it did not have the sizable ports of East or West Coast cities, Chicago was still the “crossroads city,” a busy national and international interchange where products moved in and out all hours of the day by water, truck, and rail. This commercial bustle was largely due to the efforts of Mayor Edward J. Kelly and Chicago industrialists, who, early in the war, traveled to Washington, DC, to ensure Chicago got its share of defense contracts. Kelly (and the Democratic political machine he built) was a strong supporter of President Roosevelt and his New Deal, and he was valuable to Roosevelt because he had managed to fold more African American voters into the Democratic Party.²⁴ Still, he could not count on easy СКАЧАТЬ