The Federal Trade Commission is gradually but deliberately increasing the resources behind its overall investigation into the housing and real estate industries.
The number of people and the amount of money committed to various commission studies of the housing business is growing, according to FTC sources. They say that those investigations are being run out of several offices and may lead to several enforcement actions.
In what it considers one of the most important activities in the housing area, the FTC has called for a national hoimeowner warranty program to help diffuse the soaring number of housing defects reported and to make it easier for consumers to get their complaints addressed.
But FTC efforts span a broad spectrum of regulatory possibilities.
There are, for example, separate investigations on restraint of trade in the area of building materials, false energy conservation claims by builders and unfair credit practices.
And there are several types of enforcement policies that can come out of these investigations. The commission can commence rulemaking in several area. Injunctions can be brought, reports can be made to Congress requesting legislation, the agency can work with individual states to help form local rules and it can intervene before the Department and other federal agencies in their regulatory proceedings over housing issues.
A recent FTC housing policy session report calls the home "the largest single purchase most consumers ever make," accounting for about 30 percent of the average consumer's disposable income.
In 1977, the report noted, "counsumers purchased 820,000 newly constructed and 3.6 million previously occupied homes at an average cost of $54,000 for a new home and $47,900 for a used home."
But, the study adds, inflation is hitting particularly hard int the housing sector. "For the last eight years," the report notes, "housing costs increased at an annual rate of 11 percent, significantly higher than the rate of increase for the Consumer Price Index as a whole."
According to the report, the FTC is now devoting 6 percent of its entire attorney staff to housing-related consumer protection and competition matters.
"Consumers need protection against substantial defects in the quality of their homes and apartments, against high costs due to anti-competitive practices among constructiion industry suppliers, and against unfair and deceptive practices in the real estate transaction itself," the report states.
The focus of FTC activity is in three areas: housing quality, housing cost and housing access issues.
In the housing quality area, the commission is conducting a traditional kind of investigation-of defects.
"In the wake of the housing construction boom of the past two years," the report states, "housing defects have become especially noticeable for their incidence."
In the area of rental housing, the report states that "the commission could play a significant role in reforming unfair lease clauses by submitting information to state attorneys general on how such clauses can be attacked under 'Little FTC' Acts. Thous would have the additional benefit of strengthening ties between the FTC and the state attorneys general."
As for housing costs, the commission is devoting special attention to the interrelationships among providers of real estate settlement services. That means looking into commissions charged by real estate brokers.
As part of the overall Carter administration move toward federal deregulation in general, the FTC is also looking at the elimination of many restrictive building codes.
The issue of access to housing is one of the most innovative and difficult areas on inquiry. The report states that the commission "may want to intervene before the bank regulatory agencies and Congress with regard to the Community Reinvestment Act and new mortgage instruments."
The Community Reinvestment Act requires bank regulators to consider the extent to which a financial institution meets its community' credit needs when they are considering that institution's request for additional offices, insurance, or approval for a merger or acquisition.
"Commission interventions in bank regulatory proceedings could assure that regulations...adequately protect consumers in affected communities from disinvestment by the banks in which they place their deposits," the report suggests.
Further intervention by the FTC before Congress and bank regulators could also help lead to informing consumers of the actual long-term costs of certain proposed mortgage instruments, which might, for example, carry graduated payments and variable interest rates overtime.