Postwar. Laura McEnaney
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Another in Lincoln Park said “he would not let a bunch of Communist dictators run his affairs, [and] that he would close up his property and give us a taste of [a] housing shortage.”41 In both brushes with the OPA/OHE in 1945 and 1947, the La Dolces were unrepentant and defiant. Even with their inventive accounting fully exposed before the Cook County Circuit Court in 1945, they lodged a counteraccusation, their vitriol for controls fully unleashed: “all of the tenants … have illegally conspired together to bring whatever harm and trouble they can,” they claimed. They then challenged rent control itself, arguing it was patently “illegal, invalid and unconstitutional.” Rent laws “were enacted as wartime emergencies,” they conceded, but “since this nation is no longer in armed conflict, the original purpose of the regulations have [sic] ceased to exist and therefore … all the people of the United States should not be bound” by such legislation.42
They had a point. World War II was over. But its effects continued. In a 1948 case about the detention of a German citizen, the Supreme Court laid the rhetorical groundwork for what Chicago tenants knew already from experience—that “war does not cease with a cease-fire order.” That same year, in a rent control case that went all the way to the Supreme Court, a landlord argued that “wartime” should be more narrowly defined, otherwise a nation’s war powers could reach too far and last too long. The court disagreed, holding that war legislation “does not necessarily end with the cessation of hostilities,” citing the housing crisis as an example of how “the evils which have arisen from [war’s] rise and progress” could far outlast the war itself.43
But Chicago landlords lived by a different clock: the war was plainly over and any extension of controls was government overreach. As they saw controls on food, tires, and cars disappear, they began to wonder why they were the only ones sacrificing. As one OPA administrator observed, “there is a growing feeling of bitterness that they are being discriminated against.”44 This may help us understand why Le Pierres, Mertke, Brugger, and the La Dolces were not only repeated but self-righteous offenders. After all, what was the patriotic rationale for self-sacrifice now that the war was over? Why should they “hold the line on prices!” as the slogan went, when other sellers were jacking them up—and profiting nicely from it?
Owners and managers were far from powerless, however. In fact, in making their claims, they drew on several years of organized and influential resistance to rent control from coalitions of landlords, real estate agents, and builders. At the start of the war, the Chicago Real Estate Board told OPA officials that controls were “unwarranted and will be resisted.” Rents were already “at an unreasonably low level” during the Depression, they griped, and wartime controls would introduce yet another disincentive to build new properties. At the end of the war, the National Association of Real Estate Boards (NAREB), by now a powerful organization of real estate professionals, spread this message nationwide, dispatching speakers to decry rent control’s continuation. This organizing effort increased NAREB’s membership, as landlords and real estate agents around the country formed local NAREB affiliates to strengthen the organization’s lobbying muscle. In the spring of 1949, as Congress once again debated rent control’s extension, seven hundred Chicago landlords gathered to plan a protest march on Washington. At yet another meeting, Joseph Dixon, president of the National Home and Property Owners Foundation, called rent control “a scheme of Communists and Socialists” who were operating “behind the scenes,” according to the Chicago Daily Tribune. “We are tired of begging [for] crumbs from our own table. We want a fair deal, too,” he said. Dixon’s foundation also published an open letter to Congress, calling the OHE director a “Housing Dictator” whose agency “creates and continues shortages, instead of promoting more housing.”45
Such charges were inflammatory but not baseless. In fact, rent control did have a dampening effect on the construction of urban housing because it encouraged developers to look outside city limits for more favorable investment opportunities. World War II had been an industrial boom but a construction bust. Continued shortages of materials and labor, investment in suburban development versus urban renewal, and the devotion to single-family housing kept most working people in the overheated rental market for years after the war—in Chicago and across the nation. The demand nationwide was for low- and middle-cost urban housing, but the low profit margin in this sector did not attract private developers, who were already eyeing more lucrative opportunities in the suburbs. And yet, during the war, rent control did not contract the market for home buying as much as real estate agents and builders had claimed, because home sales were not subject to price control.46 We see a rise in homeownership in the forties, then, not because of new construction—the raw materials were simply not there—but because of what the Department of Labor identified as a “drastic shift” of properties from the controlled rental market to the unencumbered home sales market. Homebuilders thus joined real estate officials and landlords to zealously condemn rent control, because if people could remain in affordable rental housing, their profitable postwar building boom was threatened. Chicago’s OPA rent director, John Joseph Ryan, encountered this collective hostility when he attended a 1945 meeting with the Chicago Metropolitan Home Builders Association. Appearing with a host of other federal officials, he alone was “roundly ‘booed’” by the audience.47
As much as owners liked to complain about rent control as “big government,” they knew there were perfectly legal ways to collect more money from their tenants. After all, the OPA/OHE was proconsumer, not anticapitalist, and Congress’s rent laws represented limits on, not eviscerations of, the sanctity of property ownership. A few examples from the law make the point. If there was a spike in property taxes or operating costs, or if owners made structural improvements or increased services (such as janitorial), they could claim “substantial hardship” and ask for and receive a rent increase. Landlords or managers could incontestably raise the rent if they discovered more tenants had moved into the apartment than originally agreed upon. To make these or any other cases, though, one had to fill out a petition, submit receipts, and then wait—sometimes for weeks, often for a few months. And if landlords felt columns and boxes could not convey their plight, they had space to write, to frame their balance sheet as a postwar survival narrative.48 Thousands of landlords did this in an attempt to grow their income the legal way. In the first five chaotic months of the peace, landlords’ petitions for increases held steady at about 2,300 per month, and thousands more telephoned with questions. In that same five-month period, the OPA tallied an average of 24,565 phone calls per month and administrators calculated that just over half of these came from landlords.49
A more sinister read of these calls might suggest that owners sought guidance about the law not to follow it but to flout it. From the start of the war, price control evasion was a serious problem in every category, and it grew worse as the war came to a close. The paradox of evasion for owners was that the more they tried to outsmart the law, the more the government adapted and extended the reach of the despised regulations. As one economist has found, “to suppress evasion the OPA was forced to seek more and more control over the market place,” which was exactly what owners did not want. The OPA/OHE staffs kept trying, though, because they were “frequently frustrated” as they tried to reign in violators. In part, this was due to small staffs having to chase more and more offenders. Enforcement was the bedrock of rent control, as the Roosevelt administration had already learned from the failure of voluntary fair rent committees. Local branches of the OPA/OHE had their own compliance and enforcement units; they were the only muscle to ensure a judgment rendered was carried out. But declining congressional appropriations weakened that muscle. Throughout rent control’s existence, local offices were understaffed and incredibly backlogged. This was especially true in the final stages of the war, as controls lifted on certain commodities and it looked as if all regulation would disappear.50
Without enforcement, OPA/OHE staff feared, it would be a market free-for-all in cities across the country. Chicago’s office is but one example. At the start of 1947, chief attorney Milton Gordon told his director that budget cuts and staff resignations now threatened a near collapse of its enforcement operation at a time when the housing crisis seemed to be getting worse. “The word has already gone around in this town,” he said, “that landlords can violate with impunity,” for his tiny legal staff could only bring so many