A government housing official predicts that future buyers of new homes may have to depend on a lottery system to purchase housing.
Laurence Simons, assistant secretary of Housing and Urban Development, told a housing seminar sponsored by the New York Society of Security Analysts this week that there is a severe shortage of available housing supply for people of all income levels.
He said the California lottery system is spreading to the rest of the country and it "bodes ill for all." In some areas of California, would-be homeowners participate in drawings for the right to buy houses.
Simon said a speculative fever has gripped the industry and sales prices are escalating at an incredible rate. He said "perhaps as few as 35 per cent of our population can afford a new home without some form of government aid in today's market."
Nathan Shapell, chairman of Shapell Industries Inc., a housing builder and community developer in Beverly Hills, Calif., told the seminar that demand for new housing in California could not be met by home builders in the traditional business manner, leading to the lottery system.
In the company's 1976 annual report, Shapell noted that buyer demand has brought pressure on the price of new homes with increases reported to be reaching 30 per cent a year.
He said in the report that the average price for new single family homes in California has increased more repidly than throughout the rest of the nation by 40 per cent.
However, Arron Sabjhir, a Commerce Department spokesman, was not as pessimistic as Simons about the housing shortage, nor did he see the likelihood of the California lottery system in housing spreading very far.
"Demand for new housing across the nation is strong, but like in California," Sabjhir said.