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| Eichler
Homes of California is one of the most successful real estate developers in the
nation. Operating principally in the San Francisco and Los Angeles areas, the
company is noted for its architectural and community planning innovations. Eichler
is now the country's largest builder of suburban houses in the $20,000-$25,000
range. The company also has developed row housing in working-class neighborhoods,
and has built cooperative and rental apartments in association with downtown urban renewal
projects. Annual sales volume from the full range of residential development now
exceeds $19,000,000. More than ten years ago Eichler Homes quietly ruled out racial restriction on its sales. Orientals bought houses in some of the first Palo Alto subdivisions as early as 1950, and in 1954 the first sale was made to a Negro family. The open occupancy policy, voluntarily adopted well before the enactment of California's fair housing legislation, was instituted under Joseph Eichler, founder of the firm and presently board chairman. Its practical application in a variety of situations is described in this interview with Edward P. Eichler, president of Eichler Homes, which is based on a discussion recorded by Marshall Kaplan of the Federal Housing and Home Finance Agency. Mr. Eichler candidly discusses the reasoning behind the initiation of the policy, its effects on sales and profits, and the reactions of community and neighborhood to what, in most cases, was a wholly new experience. He also offers opinions on the responsibilities of the home building, industry, based upon his business experience and his observations as chairman of Governor Brown's Advisory Commission on Housing,, and as a member of the Board of the National Housing Conference. Mr. Eichler is a director of the Fund for the Republic. The interview, thirteenth in a series on the American character published by the Center, makes a companion piece to the recently issued Occasional Paper, "The Negro as an American," and to the series of six books (see inside back cover) produced by the Commission on Race and Housing, which operated under a grant from the Fund for the Republic. ____________________ One of a Series of Interviews on the ________________ AMERICAN CHARACTER _______________ Q: Eichler Homes began building in California in 1948 and now youre probably the largest home builder in the United States in the $20,000 to $25,000 price range, putting up 700 or more units a year. Did you always sell on an open occupancy basis-that is, without regard to race and so on? EICHLER: We always sold to Orientals. I think the first house we sold to an Oriental was in late 1950 or 1951 in Palo Alto. This was the first time an Oriental had ever applied. There were some people in the neighborhood who got a little upset but it was nothing of any great proportion. Q: Did you lose any sales? EICHLER: Not that I know of. In the next couple of years we sold to a considerable number of Orientals here and there. At that time we were mostly building relatively small subdivisions around Palo Alto, and the bulk of the houses sold from $13,000 to $16,000, although several were in the $19,000 to $25,000 range. I don't recall whether we sold any homes to Orientals in the higher priced subdivisions. In any case, it was such a minor issue that we didnt think about it one way or the other and we were never aware of any community reaction. Q: When did you begin to sell to Negroes? EICHLER: The first instance I personally know about was in late 1954, We had started a subdivision in Palo Alto of 243 houses, called Greenmeadow. We had a number of commitments there different from any we had ever made before. It was the first subdivision we had done (and probably the first one in the country) in which there were to be planned community facilities -- a nursery school, a swimming pool, and a park -- as an integral part of the subdivision, The second difference was that we were undertaking a greater number of higher-priced houses than we had tried before-$16,950 to $19,500. The subdivision was an enormous success. We had sold, I would guess, about two-thirds of it and had built almost a third when I had a phone call. I was working in the office one night when a woman called and asked me, "Do you discriminate in the sale of your houses?" She also asked, "Do you sell houses to minorities?" I had never had these questions before. I had done some personal selling, but for the most part I directed sales operations, so I said to her, "Well, I don't understand what you mean. Are you a member of a minority asking if you can buy a house, or are you asking this for academic reasons?" She replied that she was a Negro, and so was her husband. She said that she was renting a house across the street from our subdivision in a lower-priced subdivision. Q: Do you know what the reaction had been to this family in the subdivision in which she was renting? EICHLER: No, but I assume that if there had been any major reaction we would have heard about it. The desire to move apparently had nothing to do with the neighborhood problems. they just wanted to buy a better house. They were in a small two-bedroom house and they had two kids, as I remember. She told me she was working, I think as a nurse at a hospital. She asked me if I would pick her up and take her to her house to talk with her husband. I did this. During the conversation I learned that she was a West Indian, not an American Negro, but that her husband was an American Negro, He was a scientist who taught at Stanford and also worked in a laboratory. Q: Had they been to your subdivision? EICHLER: Yes, and they said that they liked our houses, She asked, "Will you sell us a house?" Well, frankly, I said, the issue had never come up and I would like to talk to my father about it, When I did, his reaction was along the lines of "Why are you bothering me about this? I haven't got time for these little problems," I went back to the people and said, "O,K., pick a house, make a deposit, and we will put it through the regular procedures." The house they selected was one that had just been started. It was on a cul-de-sac, and I believe all the rest of the houses on that cul-de-sac had been sold. I know that the houses on either side had already been sold. The people went through the usual procedures, processing the loan, picking the colors, asking for changes -- the usual things that buyers do. They also went out to the house while it was being built, and they were seen by various people. But there was very, very little reaction that came back to us. A few people called; a few talked to me with a bit of hostility. They were disturbed about property values, but they were a bit defensive in disclaiming prejudice. I said to most of them that we felt that when we sold a federally insured and financed unit, even though the law was not being enforced, we were required to sell to any qualified buyer. I also added that we recognized most builders were not doing this. Q: What law did you use? This was still 1954. EICHLER: We just took the basic position that the Supreme Court of California took. Q: Even before they took it? EICHLER: Yes. I never hid behind the law though. I admitted that it was questionable whether it was or wasn't the law and that others were violating it in any event, But I said that this was what we were going to do, and I believed that if everybody calmed down, there would be no problem. There was one little incident with the people who had bought the house next door. The husband came to see me and said that he didn't think they could move into the house, although by this time it was finished and he had closed on it. He said that his wife was very disturbed about living next door to Negroes. Her concerns were not economic but social, He wasn't trying to talk me or Eichler Homes out of what we were doing because he thought it was the right thing to do, but his wife would be very unhappy and would we buy the house back or do something to help him? We bought it back. We resold it, shortly thereafter, to someone who knew there was a Negro next door. It happened that he knew the Negro, but this was pure accident; he had inspected the model home in the usual fashion and had decided to buy before he knew the identity of the Negro family. The Negro family incidentally lived in the subdivision for about five or six years, maybe more. They moved when the husband got transferred to Chicago. Q: There was no overt community reactions? No ostracism? EICHLER: The most interesting thing about it was that there was flat out nothing. Everything went smoothly. Q: What about the kids? EICHLER: Their kids swam in the swimming pool and so on . . . . I must admit that their houses, particularly in those days in Palo Alto, were attracting a somewhat special kind of person. There were a number of college professors, for example. Yet even in our other subdivisions it seemed that we had people who would be more likely to be tolerant just because their educational level was higher. I don't want to put this on the grounds of political liberalism, because I imagine there were about as many conservatives in our subdivision as in any other. I'm sure that the Negro was accepted on the basis of just general tolerance. Perhaps it was made easier because the subdivision was so successful in terms of design and reputation. Anyway, Negro occupancy proved no barrier to future sales or resales. Q: One general conclusion you are apparently making is that the people were concerned more with the quality of housing than with the Negro occupants. EICHLER: Right, There may have been some luck in this because the market was strong. Our own market was especially strong. We were a very dominant force in Palo Alto. Q: Was there any loss of sales time because potential customers were scared off when they heard or saw that you sold to Negroes? EICHLER: I don't think so. This subdivision was nearly all sold out by the time the Negroes moved in. I can tell you that it turned out to be one of the most fantastic subdivisions ever built. the prices went up over $10,000 in seven or eight years. Of course, prices of all houses went up, but in this subdivision they went up much more. Q: When did the next Negro buyer come to you? EICHLER: He came up in a different way the next time. We still had not developed any special techniques or, for that matter, any philosophy. We did it once, it turned out all right, and everybody forgot it. About a year later, that is around late 1955, a couple of doctors, who had bought houses in our subdivision in San Rafael in Marin County, came to see me. The doctors asked if we would sell a house to a Negro. They had a friend with whom they had both gone to Harvard Medical School, a Negro, who was in the Air Force at Hamilton Field. He was going to get out of the service in a few months, wanted to use his GI eligibility for a house loan, and planned to be a radiologist in a local hospital. I said that certainly I would sell him a house. Tell him to go out and pick one out. He chose a finished house, but he was not to be eligible for the loan until he got out of the service three or four months from then and didn't particularly want to move until that time. We didn't like holding the house that long, but we did do it for other customers who seemed to have valid reasons. He certainly seemed to have a valid reason, and so we made a contract for him to close the deal after he was discharged. Q: Was this pending sale known in the area? EICHLER: Yes. He went out on a Sunday with his wife and child-his wife was a teacher, I think-to look at the house and the landscaping after we took the deposit. A month or so went by and I forgot about the whole thing. Then I got a phone call from a man who lived in the subdivision. He was very disturbed. He said things like, "What are you doing to me? I have all my life's savings in my house." The house the Negro was buying, incidentally, was as far away from his house as it could be. I grant that there were only fifty or sixty houses up at that point, but it was way on the other side. Q: How did you you answer? EICHLER: I explained that I didn't think there was any problem. Besides, I said that I didn't think it was any of his business, and he was getting himself upset about nothing. I was a little surprised because I didn't think he was the kind of man to do this. I assumed that someone must have frightened him. Q: What type of man was he? EICHLER: He was an artist, and my "prejudices" were that it was unlikely for an artist to have this kind of reaction. Also, he had a very small investment in the house, and I thought that this would limit his concern. I learned from this experience-and a lot of others-that the size of the down-payment that people make has nothing to do with their reactions to this issue or any other issue. People with a no-down-payment GI deal will feel they have just as big a stake as somebody who pays cash. Q: Was there any other community reaction? EICHLER: Well, from that point on, I began to get rumblings from the salesman. It seems there were some ringleaders who were trying to foment feeling in the community and little groups were forming. The salesman was personally committed to open occupancy, to the principle of integration; he was also a man whose judgment I relied on more than I would on most salesmen; and he lived in the community (in fact, he had lived in the county all his life). He finally said to me, "This is getting serious. There are about twenty people up here who are very upset. There are meetings. There are two or three major leaders. There's going to be trouble." Q: What did you do? EICHLER: I told the salesman to get together the group of people so I could talk to them. Before I talked with them, I visited four or five of the people immediately around the house that the Negro family had selected. Almost everybody had moved in by then but the Negro. They were all aware of the purchase. They said that some people in the neighborhood were bothering them about it and there was a lot of discussion. I asked them how they felt. One of the four was one of the Negro's doctor friends and obviously his reaction was favorable. The reactions of the other three were: "I'm too busy," "I'm landscaping my house," "I'm trying to pay for the furniture and the kids are running around," "I haven't got time for this sort of thing," "I don't care." None of them said they thought it was wonderful, and I think that if I had said to them, "Here's an absolute choice, you won't be hurt by preventing them from buying a house, we'll have a vote here and if you vote not to have them buy a house, they won't," they probably would have voted against it, on the grounds that it was foreign to them. But as it was, most didn't care. I then met with the group of dissidents. The ringleader was a definite psychopath. He threatened me physically and with all sorts of other actions. One of his threats was that he would put in front of his house, which was located strategically in that you had to turn by his house to get to the model house, a big sign that would read, "Eichler Homes Sells to Negroes." Again, I tried to explain that I thought our actions conformed to the law, but that this was not the principal reason we were doing it. I said that if they felt it was going to hurt their property values we would consider buying their houses back from them. Furthermore, we had an enormous investment in additional land and if we had thought it was going to hurt property values, we would not be doing this kind of thing. I said that we weren't telling them what to do and they were not in a position to tell us what to do. I tried to make clear that there was no action they could possibly take that would change anything. All they could do was to hurt themselves, no matter what their view of this situation was. The second ringleader was an Army officer, either a Major or a Colonel, and I was somewhat more direct with him on the grounds that he was a military officer. I told him he should not participate in such an activity no matter what his views were. I suspect that some people in the group got out after this conversation, but some of the talk kept up and was frightening more and more people who otherwise would not have been aroused. Q: Was there any outside influence behind this? EICHLER: No, except that real estate brokers began to use it against us in a competitive sense. It was easy, since Marin County had had relatively little experience with Negroes. Prospective buyers would talk with us, and then they would talk to a broker. He would say, "You don't want to live there, there are Negroes buying there." We had several people, who finally did buy houses from us, who informed us of this. Some brokers even called to advise us against the policy because we were hurting the county. We finally decided - I don't remember exactly under what pressures-to have another meeting with the group, and my father spoke to them this time. There were maybe twenty or twenty-five people. I wasn't there, but I understand my father told them, in substance, that he was damned if they were going to tell him what to do. He put it on a very personal basis: He had a bigger investment than they did; it was his property and his decision. They had a right to take whatever legal or other action they wanted to take about moving and selling their houses. He offered to buy the houses back. He made this offer very specifically to the two ringleaders. They immediately refused, saying that their houses were worth much more money than when they had bought them. Why should they sell out? Why should they give them up? Well, apparently, this straight talk knocked off most of the opposition, except for the prime ringleader, who did put up a sign for a few weeks. But the minute the Negro moved in everything stopped, and it was the last word we ever heard. This case proved a point that has been with me ever since: The only control I see as being useful is that if you are going to sell a house to a Negro you should try to get him moved in as quickly as possible. There will be a large number of people who are apathetic, a small body of people who are violently in favor, and another small body violently opposed. The ones who are opposed will probably be able to add to their ranks through fear or through action. But once the family is in, people are faced with a fait accompli.-Only the fringe will react. Q: What about publicity? Since you were the first and are still one of the few builders to operate on an open occupancy policy in California, did the radio, TV, or press react? EICHLER: We tried consciously to minimize all publicity and carry on the policy as a normal way of doing business. Q: In your over-all operation up to this, how vulnerable were you to delay because of possible resistance of the market to Negro occupancies? How much programming in Eichler Homes per year did you need to carry delays? EICHLER: We have always been an under-capitalized company, as almost every builder is. We had to keep up volume because we had a big investment in the land and payments to make on it, as well as overhead. If the open occupancy policy had had a serious effect in slowing down our projected sales, it would have been disastrous. We did not assume, however, that this was going to happen, and I suppose, even beyond this, we just thought that this was a chance we had to take. But from that point on we knew we would have to face the question again and again, and we finally made the conscious decision that we would continue to sell on an open-occupancy basis and that we would now talk to the people in our organization about it. We would try to establish a clear policy that everybody in the company understood but we would seek the least amount of publicity possible outside the organization. We would treat it as a business decision, not as a solution of social problems. Therefore, every aspect of our operations would reflect the policy simply of treating Negroes like any other potential buyers. This position, of course, wasn't developed all in a day; in fact, it grew over at least the next six months. Q: You now have a reputation in California for being an open-occupancy developer. You have gone as far south as Orange County, which is considered a very conservative area and, one might think, would produce more outside pressures than in the San Francisco area, say. Have you run into any obstacles from the residents or the local government there? EICHLER: No. We are now on our third subdivision in Orange. We have had a very close relationship with the city government because of some complicated problems that required their cooperation. I would say we got it. Q: Were any obstacles thrown in your way with the purchase of land? EICHLER: The people who sell land are only interested in the money. Q: I believe you had a project in which the first nine or ten buyers were Negro and the overall sales were slow. EICHLER: This was a subdivision in which a variety of special sales and physical characteristics raised some problems. One was that the only way of getting in and out of the subdivision was by a long street and the model homes were at the end of this street. The sales were slow for reasons that had nothing to do with the Negro issue. The location did not live up to expectations and the design was unique to the area. We probably got the same number of Negroes that we would ordinarily get in that period of time. In the first year of selling we sold to five Negroes, I think. In the first year anywhere we would ordinarily sell a hundred to a hundred and fifty houses and this would mean a Negro occupancy of 3, 4, or 5 per cent. However, since we only sold about sixty houses in the first year in this subdivision, the percentage of Negro occupancy was higher. This may have had some adverse effect. The Negro buyers were located close to one another and were clearly visible. I might point out, incidentally, that in the last six months the sales picked up dramatically. Q: With the Negroes living there? EICHLER: Yes. We even sold some more houses to Negroes. The higher than average percentage at the beginning might have caused us a little more trouble than we would have had otherwise, but the net effect wasn't harmful. Q: Did you try to delay sales to Negroes, or, once you sold, did you try to avoid grouping? EICHLER: We did very little except to try to prevent bunching in a couple of instances. Q: How, did you go about it? EICHLER: Me just asked people to select house one instead of house two. We played it straight and told them why. Q: What reaction did you get? EICHLER: One man was a little upset but he did it. The other man saw the problem immediately. We did not demand this in any way.My general conclusion is that the rather rapid pick-up in sales later indicates that, again, the Negro occupancy was not the major cause of the earlier slowness. Q: What is the percentage of Negro occupancy now? EICHLER: About eight Negroes out of one hundred and fifty. Six per cent. Q: Is that the highest Negro occupancy in any of your subdivisions? EICHLER: Probably. But this kind of thing stated in percentages is unrealistic. If we went from 6 per cent at one point to 8 per cent at another, this would be a one third rise, but, of course, in actual numbers this wouldn't mean much. Q: Did you ever have your salesmen try to delay sales to Negroes or delay their moving in until you got a larger percentage of whites? EICHLER: No. We talked about this, but decided not to. In the first place, we felt we were nowhere near any kind of really severe situation. Secondly, we didn't know how to do it even if we had wanted to. I suppose there might be a point in some subdivision, under certain conditions, when a builder might have to face that question. I think it is safe to say as a generalization that, despite the public awareness of our policy, we haven't had, anywhere, the rapid influx of Negroes that many people predicted we would have because of our policy. Q: Could this be attributed to the price scale of your homes? EICHLER: Yes, in part, although the average house in California is going at $18,500 and we have done some subdivisions since 1959 in the low twenties-$19,500 to $21,000. These are only slightly above state average so that, if the traditional view were correct, we should have had a more rapid influx than has actually occurred. I never expected a massive Negro market. Even in a lower price range around most metropolitan areas and suburban communities, if a major builder decided that he would sell to Negroes, I don't think there would be any great influx. Even if all or most of the major builders did it, accompanied by a great public announcement about it, I still don't think there would be any great surge. Q: What effect has your open occupancy policy had on total sales? EICHLER: It probably varies. There are more Negroes in some subdivisions than others. I would say that the policy has kept some people away. At the same time, in some areas, it has had some good effects. Over-all, it has not hurt our business. I can't think of anywhere that it has brought us more sales, although we have had some people who have said, "I understand you sell houses on an integrated basis. I want my kids living in that kind of community." This happened to me recently in Los Angeles. A man who had never seen an Eichler home, didn't even know what one looked like, bought one just because of our open occupancy policy. I think that where a buyer or prospective buyer, either before or after he has made a deposit, signifies openly to a salesman that he is uneasy about our policy, we would probably win - if you want to call it that - most of the arguments nine times out of ten. I suppose the tenth should be considered a lost sale, but we might have lost it any way. There probably must be people who never come around at all because they have learned that Eichler sells to Negroes, whether Negroes are in a particular tract or not. But how could you ever know who those people are? Others come and don't buy, but if they never say anything to the salesman about their reasons for not buying, you never know whether race is an issue. We think we have a responsibility to the industry and to the community. This includes producing a good product in a well designed community. There is a right way and a wrong way to do things. I think it is this basic philosophy that is bringing us economic success. We have carved out a very important niche in the market. Q: Have you developed any special sales techniques to meet market resistance? EICHLER: First of all, we decided that we would not mention our open occupancy policy unless the customer brought it up himself. If he specifically asked whether we sold houses on an open occupancy basis, we would answer, "Yes, we sell houses to any qualified buyer." If he went on to ask, "Does that mean you sell houses to Negroes?" our answer would be yes. If he then asked, "Are there any Negroes in this subdivision?" we would answer yes or no depending on the fact. If he asked, "Is there a Negro on this particular block?" the answer would be yes or no depending on the fact. If he asked, "Are there Negroes living in that particular house?" the answer would be according to the facts. We would not answer any more than the specific questions themselves. In other words, if he asked whether there was a Negro in the subdivision, we would not interpret this as asking whether a Negro lived next door to the house he was interested in. This may sound like a rather artificial system. But if you came to us and didn't ask if there were Catholics, Jews, etc. in the subdivision, there wouldn't be any reason for us to tell you. If you asked, "Are there some around?" we probably wouldn't run around with you in a car and point them out. We would probably say, "Yes, there are some around,"or "No, there aren't any around," depending on the fact. Q: What is your answer to the perennial question about the Negro in relation to property values? EICHLER: The salesman has all the usual responses ranging from the legal requirements to "It's the right thing to do," to our own experience in the resale market. He points out that all our houses have gone up in value at least as much as other houses of comparable price. He might also use what I think is a very successful argument, which is that the only time the presence of a minority group, particularly Negroes, leads to devaluation is when there is panic selling by whites. Therefore, because it is rather well known that Eichler Homes sells on an open occupancy basis, there is not likely to be panic selling if a Negro should buy a house in one of our developments. This is because the whites already know about our policy when they buy. The whole neighborhood knows it. It is no longer anything to panic about. The policy has succeeded, it is continuing, and so why should anyone get panicky about one Negro buyer more or less. We found that this has been a powerful argument. What we are really saying is, that our policy is almost protective. If a man moves into a neighborhood where houses are sold on an all-white basis, the chances are that this segregation cannot hold up forever. When a Negro does acquire a house here by one means or another, there might be panic selling in that neighborhood, because the Negro purchase would be an unfamiliar and unexpected event. With us there will be no such sudden shock. Let's admit the probability that the basic reason why whites are concerned about living in a community with Negroes is not a monetary reason. Putting it on a financial basis is the easy way. After all, it's fashionable to be concerned about your money. Nobody can blame you if you say, "Well, I really don't care myself but I'm afraid of losing my money. It's all the money I have saved in my lifetime." But it may be that the real reasons have to do with social relationships, particularly the relationships among children. Adults think they can control their own relationships. They think that if they don't like the Negro they won't have to have anything to do with him. On the other hand, they know that kids don't work that way; kids don't see color. I think that this is what worries people. The experience is foreign to them and so they fear it would be bad. Q: How do you explain the difference between your cases, in which there was no obstruction by civic leaders or other citizens, and the situation in Milpitas, California, where there was an overt attempt to throw obstacles in the way of the organization that was trying to develop a tract there? EICHLER: I think this illustrates a basic point. We have been as successful as we have because we impose the policy on an otherwise normal and going business operation. We are a company operating to make money and trying to deliver the best. Our company was pretty big by the time we sold a house to a Negro. We could absorb this into our regular operations because of our size and reputation, and because we never sought any publicity about it. We were not identified as builders who were trying to solve the race problem first and build houses second. In Milpitas, and in the case of other groups like Modern Community Developers, the main purpose of the builders is integrated housing. They are not established builders in the community, with connections and relationships with most of the people there. They go in for the overt specific purpose of building integrated housing. The real question is whether the large or fairly large suburban builder who is doing most of the home building in the United States cannot superimpose the open occupancy policy upon his operations so that we will no longer have special cases. Every effort ought to be made to try to get the bigger suburban builders committed to this policy first, for they are the ones who can handle most easily any problems that might arise. The small builder might not be able to withstand the initial setbacks. The big fellows can. They are the ones who should be enlisted to adopt open occupancy. I am convinced that there is never going to be any big rush of Negroes to the suburbs anyway. The cultural, economic, psychological, and social forces working on Negroes are such that they are not likely to push out of the central city ghetto into outlying areas. Eichler Homes has been selling homes to Negroes for ten years. Our policy has been common knowledge for at least five of those ten years. And, as I've already said, we have never had any large rush. The number of Negroes we have sold to is probably 3 to 4 per cent of our total number of units. Q: You conclude, then, that the big builder must take the lead? EICHLER: Yes. After all, if the small builder is asked to do it initially and the big builder doesn't, the one who is probably at a competitive disadvantage already could well be put at a greater disadvantage. Take what has happened in Palo Alto, where Eichler Homes has been an enormous factor in the market since 1951. By 1956 or so we were probably building over 80 per cent of the housing in that city. I grant you that it is a college city, with a pretty high level of education and income, and, of course, this has something to do with the attitude of people toward the question. Still, when it became common knowledge that Eichler Homes was selling on an open occupancy basis some of the real estate brokers said they thought this would be a bad influence on the city. This kind of talk died down quickly, and now almost the whole market has opened up. Resales in our subdivisions are occasionally being made to Negroes. Negroes are able to buy houses in nonEichler subdivisions. The brokers have seen it work in a large part of the market and they have become used to it. So have the citizens of Palo Alto. This has been a living demonstration--the only form of education that I think can the truly useful. Here, in a sense, Eichler Homes has been in a position to be able to pass its own local fair housing law because we could affect enough of the market. The function of a fair housing law is to cover the market, so that builders are not put in a competitive situation on this particular issue. Men being what they are, the temptation is very great for a builder who is not operating on an open occupancy basis, in a situation where the market is competitive, to use this as a weapon against someone who is selling on an open occupancy basis. Buying a house is a terribly emotional business. People usually put a major part of their financial resources into it, and they are also committing a lot of their psychological resources. They are more easily frightened in this kind of transaction than in any other. Q: Is open occupancy good business? EICHLER: I haven't ever said that it is good business. I have said that I don't think it's bad business. In various talks I've pointed out that Eichler Homes was the first home builder to adopt the open occupancy policy -we were also the first to offer our stock to the public and become a public company - and that the open occupancy policy has never seemed to bother supposedly highly conservative brokers or buyers. Furthermore, almost every kind of lending institution in the country is aware of our policy and we have never had any problem financially. We have also never had any problems-at least any that we could put a finger on-with local officials. It is safe to say that it is not a dangerous policy to adopt, particularly for a reasonably competent large builder-and by large I don't mean 700 houses a year like us but maybe as low as 100 houses a year. Q: One of the criticisms of those who say that Negro entry into an all-white area has not caused property devaluation is that analyses have been based on examples in only a tight-money or hard market. Therefore, the conclusion that Negro occupancy didn't aftect the market may have been because of the good market situation. Eichler Homes has operated through two recessions. Did you notice a change in your competitive status with other builders then? Did the resale value of Eichler Homes hold up? EICHLER: In general, our competitive position has been better in a tough market than in a seller's market. This doesn't mean that I like recessions because, of course, our actual position was not better. But we have continued to attract people even in a soft market. Our success certainly cannot be ascribed to our open occupancy policy, but it seems to me that by being reasonably good about the other things we haven't been hurt in a highly competitive situation. Furthermore, resales of our units have always been good. Q: If you had to sum up your personal views about open occupancy, what would they be? EICHLER: There are some risks in selling on an open occupancy basis, and there will be arguments about the precise nature of these risks and how much of a risk there will be in one market as opposed to another and one builder as opposed to another. But I believe that builders really don't have any choice. They are in a position that they have denied for too long; that is, when they build a lot of houses or apartments, they create communities. They create a lot of things in those communities which are going to be there a long time after they leave them. The whole question of how people will live with each other, all kinds of psychological, emotional, and aesthetic considerations, are involved. In the area of race relations the government has to use every weapon at its command: leadership, law, the carrot and stick with money, programs, insurance and subsidy programs. The government must use all its strength to improve the situation even where the operators don't want it. We would be better off with a comprehensive fair housing law. I am convinced that the race question is the
single biggest block to advancemient in this society. On all levels of personal
relationships, education, and the other "goods" that our society should be
creating and developing, we seem to be paralyzed,, and yet we have vast, unused resources.
Every time the government or private industry -either one- considers trying to meet these needs, they hit head on the
question of integration. The builders cannot evade the realization that what they do has a
deep and lasting impact on the whole community, even on the whole country. They cannot
simply say, "Well, I'm just a businessman, I'm here to make a buck." They are
businessmen in business to make money, but in the decisions they make they are also
determining very heavily what kinds of communities, what kinds of environments, people are
going to live in. Builders would be much better off if they faced up to this
responsibility. POSTSCRIPT As I have gone over this interview, it has occurred to me that it overstates my role in Eichler Homes' policy of selling on a nondiscriminatory basis and in fact in the whole spirit of the organization. In 1948 my father, Joseph Eichler, founded the company. From the beginning he accepted, and even relished, the idea that he had a responsibility to himself and to society to be a creative innovator. The attempt to force constructive change in any field of endeavor can sap the will of even a very strong man. In the home-building industry, which is shackled with institutional and historical constraints, the effort is rarely made. Eichler Homes has fought these obstacles with considerable success and also with some failures. The restless, searching atmosphere under which all of us at Eichler Homes have worked must be attributed not to some vague ideal but to the driving force of one man, my father. Any policy to discriminate in the sale of our houses because of race would have been inconsistent with his values and personality. Whatever role I or others have played in carrying out such policies must be viewed in this light. The Center for the Study of Democratic Institutions has been trying to measure change in the world to ascertain what alterations in our attitudes and institutions will be necessary to make democracy work. It is clear that the rapid progress required cannot be made by committees or institutions but only by individuals who are willing to take great personal risks because they know their goals are worthwhile. EDWARD P. EICHLER |
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