Financing American Housing Construction in the Aftermath of War Harvard Case Solution & Analysis

At the beginning of the First World War, the United States is faced with an acute shortage of housing. Officials fear spread of the disease - and even communism - in a country of close urban centers, where the vacancy rate held near zero and familied often "doubled" in a single housing units. In the hope of provoking a surge of new construction, New York Senator William Calder called for the creation of eleven regional Federal Building loans from banks, which will serve as a new source of funds for mortgage lenders. The proposal has been controversial, however. Opponents do not like the fact that the banks of the Federal Loan building will have the authority to issue tax-free, mortgage bonds, and many argued that the private market will solve the problem of shortage of housing on their own. Supporters of the bill, however, believes that it was necessary to prevent a potentially disastrous and protracted shortage of housing, and they lead to long-term success of mortgage bonds in France and Germany as proof that their plan could succeed. Federal legislator was to assess the arguments of both sides and make a decision. "Hide
by David Moss, Cole Bolton Source: Harvard Business School 30 pages. Publication Date: January 23, 2008. Prod. #: 708032-PDF-ENG

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