Up and away. . . from page 6 California, which is where the industry keeps threatening to go with Texans’ savings if SB 134 fails, turns out not to be the lucrative market they thought it was, and the reason it’s not is that their high interest rates have depressed the home construction industry. As interest rates in California rose above 10 percent in 1978, the number of housing starts there fell by half, with most of the slump occurring in the last six months, and there are many more homes on the market now than there are people looking for them. “High interest ratesbetween 10.5% and 11% for home mortgages in most areasare the biggest drag on the [California] market,” reported the Wall Street Journal in a January 19 article. The newspaper quoted an executive of California Federal S&L as saying, “Qualifying for a mortgage loan is becoming a major barrier,” and he predicted “declining sales over the next several months.” The reason for the decline is obviousas an attorney who has been shopping for a home in San Francisco told the Journal, “Unless I can get a very good deal on the home, there’s no way that I’m going to lock myself into an 11% interest rate.” Texas consumers are at least as bright as Californians, and the S&Ls’ contention that consumers are going to shell out whatever rate they demand is Wishful thinking on their part. Clyde Johnson, the president of the Savings and Loan League, pulled at the heartstrings when he said that the Texas usury ceiling hurts “the families who need homes, the thousands of people employed in the construction industry and many related industries from carpets to grass seed, and especially the realtor and the builder.” But the California experienceand common sensesuggest that Johnson and his fellow S&L owners are trading here in blue smoke. If Senate and House members really think consumers and workers might applaud a vote to raise mortgage rates, all they have to do is ask a few of them what they think of the idea. The loan lobby might fool some legislators about the intent of SB 134, but ultimately they will not fool the public. This is a banker’s billit is going to take money and housing opportunity from the average Texan and enrich large lending organizations that already are doing better than the rest of us. The lenders don’t need it, and neither does Texas. the legendary RAW DEAL Steaks, Chops, Chicken Mon.-Fri. 11:30-2:30, Sat. 4:30-12:00 605 Sabine No Reservations J.H. WHAT OTHERS SAY “A tradition of honesty, accuracy, fairness, and tireless investigation has enabled the Texas Observer to occupy a unique place in Texas journalism.” the Adversaries: Politics and The Press, Bill Rivers, ed. \(Beacon Press, “The Observer is the one indispensable publication for anyone wanting to know what’s going on in Texas.” Les Whitten, July 8, 1977 “It casts a much longer and more substantial shadow than you know. Editors read it. It is a conscience to us.” Ben Bradlee, March 16, 1978 The. Observer provides “. . the sharpest political comment of any regional magazine in the country.” Anthony Astrachan, The New Republic, July 16, 1976 “One voice has spoken out consistently for the rights of working people, for unions, and for progressive politics: The Texas Observer, published without interruption since 1954, is a beacon of enlightened reporting . . .” Harry Hubbard, President, Texas AFL-CIO, May 1977 “The Observer uncovers stories that more wealthy newspapers overlook, twits erring politicians, lambasts wrong-headed legislators, and generally turns the state topsy-turvy.” Texas by Joe B. Frantz “The Texas Observer, the biweekly champion of the neglected and voiceless in the state, the bur under the establishment’s saddle, the scourge of the lobbyists .. . often offers readers the only critical reporting in the state on political and economic issues.” The Texans by James Conaway “Though inclined to philosophic aberration, the Observer is unquestionably the best written political journal in Texas.” Sen. John Tower, June 7, 1978 22 FEBRUARY 16, 1979
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