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Mr. THOMAS. Requests have been made by the mayors, city councils, and chambers of commerce of the cities and towns. How many do you think that is? What is your best estimate?
Mr. FRANTZ. That list from the military, Mr. Chairman, incidentally, was submitted in June of this year.
Mr. Thomas. Now what is the best guess as to the cities and towns requested by the mayors, city councils, and chambers of commerce?
Mr. CARSON. I would estimate pretty close to 280, that come from responsible local sources like chambers of commerce.
Mr. THOMAS. You said that list had 275. What are you referring to now?
Mr. FITZPATRICK. He was referring to the number of cases which the present committee bas actually docketed.
Mr. THOMAS. You mean the Kaul committee?
Mr. THOMAS. And the Kaul committee has 275 cities and towns, and you think the vast majority of them stem from requests of mayors, city councils, and chambers of commerce, and other responsible local public bodies of the cities and towns. Now what part of that 275 is included in the list of 200 from the military?
Mr. FITZPATRICK. We can supply that for the record, Mr. Chairman.
LOCATIONS OF WHERRY ACT PROJECTS Mr. Thomas. Now of that request for 200 localities from the military, what part of those cities and towns have participated in what is commonly known as the Wherry Act? What is the difference between the Wherry Act and the present act under consideration, namely Public Law 139, with reference to housing?
Mr. FITZPATRICK. Again, Mr. Chairman, may we supply for the record a list of any Wherry Act projects which are being undertaken in any of the areas shown on the list which we furnished you?
(The list referred to is as follows:) Of the 326 communities listed on exhibit furnished by Department of Defense, a total of 92 (see attachment) have insurance in force on Wherry housing, or commitments are outstanding, appraisals or eligibility statements are outstanding, or requests are now in process. 1. Montgomery, Ala.
22. Aberdeen, Md. 2. Chandler, Ariz.
23. Edgewood, Md.. 3. Fairfield, Calif.
24. Fort Meade, Md. 4. Fort Ord, Calif.
25. Chicopee, Mass. 5. Merced County, Calif.
26. Westover Field, Mass. 6. Muroc, Calif.
27. Selfridge, Mich. 7. Mather Field, Calif.
28. Biloxi, Miss. 8. McClellan, Calif.
29. St. Louis, Mo. 9. Victorville, Calif.
30. Great Falls, Mont. 10. Eglin, Flá.
31. Offut Air Force Base, Nebr. 11. Tyndall Air Force Base, Fla. 32. Las Vegas, Nev. 12. Cocoa, Fla.
33. Pemberton, N. J. 13. Tampa, Fla.
34. Albuquerque, N. Mex. 14. Fort Benning, Ga.
35. El Paso, Tex. 15. Chicago, Ill.
36. Brooklyn, N. Y. 16. Belleville, Ill.
37. Hempstead, N. Y. 17. Rantoul, Ill.
38. Camp LeJeune, N. C. 18. Fort Leavenworth, Kans.
39. Fort Bragg, N. c. 19. Fort Riley, Kans.
40. Fort Worth, Tex. 20. Fort Campbell, Ky.
41. Fort Sam Houston, Tex. 21. Fort Knox, Ky.
42. San Antonio, Tex.
43. Fort Bliss, Tex.
68. Tucson, Ariz.
PROVISIONS OF THE WHERRY ACT COMPARED WITH DEFENSE HOUSING
ACT Mr. FITZPATRICK. The essential difference between title VIII of the Wherry Act and the new title IX is that title VIII applies only in the case of projects of the military Title IX applies to any housing which is required for defense workers, whether they be military personnel or whether they be civilian personnel.
Mr. THOMAS. That is the new act?
Mr. THOMAS. What is the difference between the title VIII and title IX of the new act and the Wherry Act?
Mr. FITZPATRICK. Title IX is on the basis of value as against current cost which obtains under the old title VIII, Wherry Act. The maximum mortgage amounts are the same.
Mr. THOMAS. What is the difference in the function of the two acts, the old Wherry Act and Public Law 139, with reference to titles VIII and IX?
Mr. RICHARDS. As you know, the Wherry bill, so-called, was extended for 2 years under this new law so that we now have both the title VIII, or the Wherry bill, and also title IX. Now title VIII, or the Wherry bill, is limited to projects that are certified by the military—or under the new bill it includes the Atomic Energy Commission
Mr. THOMAS. Title VIII of Public Law 139 is nothing but the old Wherry Act carried forward?
Mr. RICHARDS. That is correct. Mr. THOMAS. Go ahead. Mr. RICHARDS. That housing is limited to projects that are certified to the Federal Housing Administration by the Military Establishment or by the Atomic Energy Commission. The use is for military people or atomic energy people.
Mr. THOMAS. In just what regard does the title VIII or the Wherry Act depart from the old FHA? This is all built from private funds?
Mr. RICHARDS. Correct.
Mr. RICHARDS. As Mr. Fitzpatrick indicated, from a standpoint of appraisal and ratio of loans to either cost or value. Under the Wherry bill we can insure loans up to 90 percent of cost, with an $8,100 mortgage permissible subject to certain increases with the approval of the Secretary of Defense and the FHA. It resembles very closely the old title VI rental housing, whereas the new title IX, although it does not contain the economic soundness clause, requires us to limit our maximum mortgage insurance to 90 percent of value rather than cost.
Mr. YATES. Value after construction?
Mr. RICHARDS. Well, we appraise or value the proposed projects prior to the commencement of construction. Of course, it is assumed that that will be the value when completed—when the structure is placed on the site.
One feature about the military housing or Wherry bill housing is. that a very substantial portion of it is built on military-owned land and leased to the sponsors or private builders on a long-term lease.
PROVISIONS OF NEW TITLE IX
Now under title IX we cannot insure any loans except in areas that have been declared critical areas by the President, and certain housing has been programed—that is, we are told by the Housing and Home Finance Administrator that we can insure X number of mortgages in the area, that they must be on houses that meet certain criteria as to room size, rental, sales, price, and provisions for preference in occupancy, and so forth.
When that program has been set up in the area and people apply for permission to build under that program and come to us, we can insure up to that number under title IX.
ESTIMATED NUMBER OF HOUSING UNITS TO BE STARTED
Mr. THOMAS. What is the estimated number you are going to build under that?
Mr. RICHARDS. We are estimating from the information given us by the Office of the Administrator that we will receive 160,000 applications.
Mr. THOMAS. How many units now?
Mr. RICHARDS. One hundred and sixty thousand-one hundred thousand of them in section 903 and sixty thousand in section 908.
Mr. FRANTZ. Mr. Thomas, let me explain the discrepancy in the figures you are looking at. The program assumptions are that 175,000 units of the private defense housing will ultimately start with FHA insurance. Mr. Richards' figure of 160,000 is applications to be received this year. It is assumed that 15,000 will be late enough in
the year that the applications will not be actually received until next year.
Mr. THOMAS. At this point in the record, Mr. Reporter, will you insert the table on page 4.
(The table referred to is as follows:)
Provision of defense housing and community facilities and services, summary of
1 Excludes Wherry Act, title VIII of National Housing Act, estimated at 55,000 units for military installations.
* Excludes an estimated $3,750,000 of local funds supplementing appropriation.
Mr. Thomas. But how do you arrive at that figure of 160,000 or 175,000, either figure you want to use?
Mr. RICHARDS. They have indicated that they will program 225,000 units. .
Mr. Thomas. Who is “they”?
Mr. Thomas. Two hundred and twenty-five thousand units all together: 175,000 under title IX; 42,125, other private; and 7,875, public defense housing. How do you arrive at those figures? .
Mr. FITZPATRICK. They are arrived at on the basis of an average program in localities certified in the neighborhood of 500-550 units.
Mr. Thomas. You have only 40 localities certified so far.
Mr. FITZPATRICK. At this point that is correct, Mr. Chairman. But our estimate is that there will be 400 localities in total, and the program is actually made up for that number of areas.
Mr. Thomas. That gets us back to our original question: How are you going to arrive, what sources of information are you going to use, in declaring these 400 localities critical?
PROCEDURE FOR DEVELOPMENT OF LOCAL HOUSING PROGRAMS Mr. FITZPATRICK. Mr. Chairman, what you have to do-once the indication of the area having a problem is there-is, first, from what figures are available in Washington, determine whether there is some indication that it really is a problem area. If it is not, you do not certify. If the indications are that it may be a critical area the matter is then referred under our proposed procedure to the field offices, where a rather cursory check will confirm whether the area. does or does not appear to have such a problem. If the indications are supported by reasonable factual information that such is the case,.. then the area will be declared.
It is at this point that you then need detailed survey information, which will indicate how many units they really need. Now as to that, you have to get information from the various plants in the locality as to what their labor supply requirements are that must be brought in from other areas; what the incomes of those workers are; and then translate that into a specific program of housing or community facilities to meet the needs for that locality. Under the law that must be set up as a specific program as to number, types, rentals, and general. locations where that housing should go..
Then there must be a period of not less than 90 days in which builders have the opportunity to come in and apply for FHA insurance on other private financing to produce that housing. The period is not less than 90 days, because there are obviously some areas where a rather substantial program will be required, in which case you will need longer than a 90-day waiting period.
VOLUME OF NEW HOME BUILDING Mr. THOMAS. How many houses do you think will be constructed in the calendar year 1951, Mr. Richards? I notice here in the statement it says under existing material allocation it is estimated that between 800,000 and 850,000 new housing starts as an annual rate can be supported without undue call on available manpower and material and without excessive inflationary pressure on the economy. To what year does that statement apply, 1952, 1951, or what year? . Mr. FITZPATRICK. That refers to the calendar year 1952.
Mr. THOMAS. How many starts and completions did the industry make in 1951? What is your best estimate?
Mr. FITZPATRICK. I think the indications at this point are, Mr. Chairman, that the rate of construction for 1951 will exceed the 850,000 which it was indicated earlier in the year we hoped to hold to. There is substantial prospect that it might reach as high as 1 million.
Mr. THOMAS. I saw some article to that effect in one of the magazines the other day, and it seems that it was quite surprising to all the home builders as well as FHA. What was that figure for 1950? That was the peak year of construction.
Mr. RICHARDS. One million three hundred and fifty thousand approximately.
Mr. THOMAS. And your plan for 1951 was in the neighborhood of 800,000 to 850,000; is that correct?
Mr. RICHARDS. Yes, sir.