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To show what the effect of interest rates on rentals is, the cost of housing of sound, permanent construction as built by the speculator in the northeastern part of the United States to-day may be taken at $1200 a room. A reduction of one per cent on the interest rate on this housing equals exactly one dollar a room a month. The effect of interest rates on housing was shown in an exhaustive study of tenement house finance by Andrew J. Thomas, in a pamphlet, "Garden Apartments to Replace Slums" (1924). Similar figures are published in the 1925 report of the New York State Commission of Housing and Regional Planning.

Another factor in the cost of producing housing is the effect of the gradual rise in the standard of living of the American people since the Civil War. The claim has been made, especially