On Oct. 3 and 4 the Council on Wage and Price Stability will hold hearings to determine why the prices of building materials are rising so rapidly and how the increases affect the home-building industry.
The council's concern arises not only from the fact that gypsum, cement, asphalt roofing and lumber products have gone up more rapidly than prices over all during the past few years but that they continue to do so in a period when construction is relatively stable.
For the first seven months of 1978, the Wholesale Price Index for construction materials rose at an annual rate of 13.2 percent, compare with 8.9 last year. The biggest increases were recorded in gypsum products, which went up 25.6 percent, and in lumber products. The price of millwork increased 38 percent between December of last year and July. In the same period, the council reports, Douglas fir rose 22.5 percent, hardwood lumber 26.7 percent and hardwood plywood 14.1 percent. These were almost double the average increases recorded during 1976 and 1977.
Last spring President Carter, nothing that lumber accounts for one fourth of the totol cost of a new house, called for increased timber harvests from federal, state and private lands. He ordered his advisors to develop a plan within 30 days on the best means of doing so that would be both economically and environmentally acceptable.
Five months later there is still no report to the president, as the various agencies and departments involved have been unable to come to agreement.
About a quarter of the nation's scoftwood sawtimber or 10.5 billion board feet annaully, comes from national forests. In 1976 environmentalists helped push through the National Forest Management Art which limits the amount of timber from federal land to the amount that can be removed annaully "in perpetuity on a sustained yield basis." In other words, the tree supply cannot be used faster than it can be replaced.
Yet some experts contend that public forest lands contain a substantial amount of old growth, tress that have reached ideal cutting size. Under existing law these mature trees cannot be cut without exceeding the harvest limits. But they need to be felled, the experts say, to make room for a regulated forest consisting of new trees that can in future be cut on a sustained yield basis.
The actual yield from those roadless acres projected for next year by the Forest Service is about 3 billion board feet. (That is intended to raise the yield on national forests to 12.2 billion, up from the current 10.5 billion board feet annually.) The National Forest Products Association, a trade group, has calculated what the removal of those 3 billion feet or nay part of it as the result of those now roadless lands becoming wildness would mean to the housing industry.
Were production cut by 3 million feet - the worst and most improbable case - the prices of plywood would go up $43 per thousand square feet and Douglas fir, $39 per unit. This would increase the price of an average single family home would rise nearly 3 percent or $1,789 over the next two years. (To result in a one billion board feet drop, 8 million acres would have to become wilderness.)
If, on the other hand, production were increase by one billion board feet, the price of softwood lumber would go down by an estimte $13 per thousand board feet, and softwood plywood, by $14. Such an increase in supply would mean a corresponding drop of $600 in the cost of a median-priced house, according to the National Forest Products Association.