Mr. THOMAS. As far as you can tell from a material basis, manpower and credit regulation, the industry will turn out that same number, between 800,000 and 850,000 or slightly more during the calendar year 1952. Is that a correct summary of it?

Mr. RICHARDS. That is right.

Mr. FITZPATRICK. With reference to the Wherry Act, may I indicate there are two other principal differences: One is that the Wherry Act is applicable only in those areas where the military is able to certify that the base is regarded as a permanent establishment.

Second, it applies only to military and civilian personnel employed in the three military services. Finally, it applies only in the case of rental housing.

RELATIONSHIP BETWEEN HOUSING AND COMMUNITY FACILITIES

Mr. THOMAS. One thing the committee has in its mind is that community facilities and housing go hand in hand. In the final analysis, it ought to be a one-package proposition. That statement no one can seriously question. Yet it is divided between the Housing and Home Finance Agency and Public Health people.

Then comes the question of deciding where these standards are going to be relaxed, where these houses are going to be built. Just how much red tape is going to be involved? How much credence are you going to put on the thinking of the responsible public bodies in the communities? They certainly ought to be in a better position to know than any agency sitting in Washington. What is your plan and thinking along that line?

Mr. FITZPATRICK. Mr. Chairman, that is perfectly true, and that is the purpose of the locality survey contemplated, to assemble from the local people the necessary information whereby a housing program may be made up.

Mr. THOMAS. I saw a figure here some place in the justification. How much is it going to cost you to make an average locality survey? Mr. FITZPATRICK. I think that figure, Mr. Chairman, referred to the special occupancy surveys for which $100,000 is requested, with an estimate that 20 such localities would be surveyed.

Mr. THOMAS. Of course, that is a separate and distinct item. Certainly the times do not warrant it at this particular point, do they? If it was all-out war, that is something else; but, regarding this division and multiplication of old housing, keeping them up for 5 years or 10 years and then the landlord gets them back, and even though "you spent $10,000 on my property, you damaged it $15,000," and so forth and so on, just because the act gives you authority to do it, I certainly hope you do not embark on that program at this particular time.

Mr. FITZPATRICK. Mr. Chairman, as a rough figure on the cost of locality survey, I think I can say about $2,000. I would like to go back to our experience in World War II and find our actual cost if

we can.

HOMES-CONVERSION PROGRAM

Mr. THOMAS. Did not Mr. Egan divide and subdivide every big house in this country he could get his hands on in World War II? Have the times changed in 5 years that we have to go back and redivide them?

Mr. FITZPATRICK. If you are speaking of the veterans' reuse program, I certainly think we will not get into that type of operation. Public Law 139 does not authorize a homes-conversion program. Mr. THOMAS. What is this $110,000 item, if it is not the same thing? Mr. FITZPATRICK. The $110,000 item in the estimate is for the prefabricated-housing loan program.

Mr. THOMAS. There is an item in here for that?

Mr. FITZPATRICK. Yes sir; $110,000.

Mr. THOMAS. I am talking about cutting up and dividing these old houses again.

Mr. FITZPATRICK. That is not permitted under title III. We are under a direction there that, where temporary housing needs are to be met through public construction, the housing which is to be provided must be operated

Mr. THOMAS. That is a survey, though. Are there funds in here for a survey for that purpose? What was the survey money you mentioned awhile ago?

VACANCY-OCCUPANCY SURVEYS

Mr. FRANTZ. That is correct, Mr. Chairman. That is an estimate of $100,000 for the cost of making specific locality surveys of existing vacancy-occupancy ratios and the availability of housing in the locality. It is for the purpose of measuring the housing situation and not for the purpose of locating vacant units to convert.

Mr. THOMAS. We can spend 50 times, 100 times, a thousand times that money. What are you going to come up with? You can go into any sizable town today. The chambers of commerce-and they usually have a local housing committee and 15 other committees can give you every vacant house in town, give you the location of it. The Post Office Department even has made that survey in a good many towns. What I am trying to caution you against is not to have an enaborate set-up here in Washington or in the field to duplicate some work where the local people know more than you know or will know. If you use the local agency, you can use that information and then arrive at your own decision. Putting people in the field or putting people in the District of Columbia, letting this man do a little traveling around and around, you are just delaying, and you are not going to get any more information than the cities and towns can give you right now.

Mr. FRANTZ. In that connection, with respect to the specific item of $100,000 for surveys, that does not contemplate setting up any organization or hiring any people in the Housing Agency. Those surveys would be made for us primarily through the Bureau of the Census on a reimbursable basis.

Mr. THOMAS. Or course, that Bureau took that census 16 or 17 months ago. Every city and town has a copy of their report, and they have added to it, supplemented it, so forth and so on.

We will put the table on page 15 in the record.

Mr. PHILLIPS. You have already put page 15 in the record.

FEDERAL HOUSING ADMINISTRATION

Mr. THOMAS. Mr. Richards, what about your administrative cost of $51,000 for the Washington office and $2,500,000 in field? Tell us something about that.

Mr. RICHARDS. I would like to have the privilege, Mr. Chairman, of filing a statement here. May I read just a paragraph out of it to possibly answer that question?

Mr. THOMAS. You are a privileged character in this committee. You can do whatever you like.

Mr. RICHARDS. Mr. Chairman and members of the committee, I am appearing before you today to discuss the supplemental authorization of $2,551,000 carried in House Document 242 for the current fiscal year. These additional expenses of $2,551,000 will be paid from the estimated $6,854,000 additional fees and premiums which will be received this year by reason of the new legislation.

This supplemental authorization is required solely by reason of the Defense Housing and Community Facilities and Services Act, 1951, which was approved September 1. This act extended and broadened the military housing program under title VIII, created a new title, title IX, for defense housing, and liberalized existing credit restrictions. The Independent Offices Appropriation Act for this year makes no provision for the expenses resulting from this new legislation.

Of the $2,551,000 requested, $51,000 is for administrative expenses. This $51,000 represents the net additional amount required, together with the $4,949,000 already authorized, to carry on the existing program and the additional activities created by the Defense Housing Act, including setting up the new program and the increased accunting work in establishing and maintaining the new insurance fund.

Of the $2,551,000 requested, $2,500,000 is for nonadministrative expenses. This $2,500,000 is the net additional amount needed, together with the $23,300,000 already authorized, to carry on both the new and the existing programs, including the processing of the additional insurance applications, compliance inspections and related work resulting from the new legislation.

In approving the new Defense Housing Act, Congress has placed strong reliance on FHA programs for meeting the housing needs of in-migrant workers in defense areas and for meeting the unsatisfied need for housing at military and atomic-energy installations. The military housing program, which the act extends until June 30, 1953, has proved successful in providing a substantial volume of military housing. As of August 31, about 28,000 units had been started under the program and about 36,000 more are scheduled to start during the current fiscal year.

Title IX will be used only in defense areas designated by the President and within the limits of housing programed by the Housing and Home Finance Administrator. FHA is required to find that the mortgages insured under this title represent "an acceptable risk in view of the needs of national defense." This, of course, is a more liberal criterion than the requirement for "economic soundness" under the permanent title II program. Having in mind that the needs of inmigrant defense workers will be primarily for rental housing, a high percentage of the housing built under title IX will be held for rental. The new act also calls for some liberalization of the credit restrictions established last year under the Defense Production Act. Cor

responding adjustments have been made in FHA credit terms which should result in some increase in the volume of operations under some of our permanent insurance programs.

I believe the estimate of $2,551,000 is reasonable in the light of the new responsibilities Congress has placed on us. Thank you. I will be happy to answer any questions you may have.

ADMINISTRATIVE EXPENSE

Of the $2,551,000 requested, $51,000 is for administrative expenses. This $51,000 represents the net additional amount required, together with the $4,949,000 already authorized, to carry on the existing program and the additional activities created by the Defense Housing Act, including setting up the new program and the increased accounting work in establishing and maintaining the new insurance fund. Mr. THOMAS. Mr. Reporter, at this point insert page 13 of the justification.

(The page referred to is as follows:)

Direction and supervision of title IX operations and liaison with the Department of Defense and Atomic Energy Commission on title VIII housing is estimated to require 4.5 man-years. Additional IBM cards must be punched and tabulating records established for the additional new cases, and records must be established for the new insurance on the basis of which future billings and collections can be made. In addition, personnel services and payroll, leave, and retirement work in connection with the additional employment have been provided at the approved ratios for these classes of work.

Administration of new programs and supervision over military housing operations are expected to require 100 travel days at $15 per day, and communications expense of $1,000. Printing and supplies have been computed at the prevailing man-year costs of $84 and $65, respectively.

Mr. RICHARDS. Of the $2,551,000 requested, $2,500,000 is for nonadministrative expenses.

Mr. THOMAS. On what page of your justification is that broken down?

Mr. BURROWs. It starts on page 10, sir.

Mr. RICHARDS. This $2,500,000 is the net additional amount needed, together with the $23,300,000 already authorized, to carry on

both the new and the existing programs, including the processing of the additional insurance applications, compliance inspections and related work resulting from the new legislation.

Mr. THOMAS. Mr. Reporter, insert page 10 of the FHA justification in the record at this point.

(The page referred to is as follows:)

EXPENSE ESTIMATES

Expenses will be incurred mainly in connection with the processing of the additional insurance applications. This will require 564 man-years of employment with salaries and other expenses totaling $2.5 million under the nonadministrative budget. Central administrative and fiscal staff totaling 14.5 man-years, with salaries and other expenses of $51,000, will be required in the central office under the administrative budget. These requirements are summarized below:

Mr. THOMAS. Go ahead, Mr. Richards.

Mr. RICHARDS. The $51,000 for administrative expenses is a net figure that is, the $2,500,000 is a net figure, because with the passage of the new title there is added additional work, and certain work has decreased from our regular program.

Mr. THOMAS. How many applications do you think you will examine under this new act, Public Law 139?

Mr. RICHARDS. Under title IX, 160,000. We figure on receiving 175,000 out of a program of 225,000 and 55,000 out of the Wherry bill, or 802 of title VIII. We are reducing sections 203, 207, 213, 611, 701, by 100,000. That is on page 8.

Mr. THOMAS. I find here a net increase of 135,000 unit applications this year resulting from examination by FHA of 122,000 unit applications. What is the total of unit applications? I mean what is the total number of units you expect to build under Public Law 139?

Mr. RICHARDS. The 364,000 starts was a net increase of 54,600 because of this legislation. It reduced our existing program

Mr. THOMAS. What was that figure again by virtue of Public Law 139?

Mr. RICHARDS. A net increase of 54,600 unit starts.