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would have the practical effect of barring construction except in those areas would be manifestly unjust and unreasonable.
The bill also reduces the maximum period for loans and annual contributions from 60 to 40 years (except that 60-year loans may be made on projects not assisted by Federal annual contributions) and the maximum contribution rate is correspondingly increased. The shorter amortization period is expected to result in lower interest rates on local housing-authority bonds. The saving in total interest paid, as a result both of such lower rates and the shorter repayment period, will more than compensate for the increased contribution rate.
RURAL NONFARM AREAS
The housing needs of low-income families who live in rural nonfarm areas are as serious as those of low-income families in urban areas. Two provisions have, therefore, been written into the bill with specific reference to this problem. First, your committee has provided for a specific 3-year reservation of 10 percent of the authorizations for annual contributions contracts for rural nonfarm housing. Under this proviso, your committee expects the Public Housing Administration to undertake a program of assistance to local housing authorities in the provision of low-rent housing in rural nonfarm areas. Secondly, the bill provides for the transfer of farm labor camps administered by the Secretary of Agriculture to the Public Housing Administration for use as low-rent housing, and authorizes the reservation of all or a part of the accommodations in such camps, for migratory agricultural workers and their families. The bill requires that the rents for such accommodations as are reserved for migrating agricultural workers shall be amounts which they can afford to pay, and permits funds of the agency to be used to make up any deficits, and authorizes appropriations to reimburse agency funds for expenditures for such purposes.
RENTS ACHIEVED AND FAMILIES SERVED UNDER EXISTING LOW-RENT
PUBLIC HOUSING PROGRAM
In recommending the foregoing amendments to the United States Housing Act of 1937, and in proposing an expanded program under that act, your committee is joining the many previous congressional committees which have, over the past several years, carefully considered the problem of rehousing slum dwellers, and have repeatedly reaffirmed the conclusion that a public low-rent housing program, aided by Federal and local governments, is the best solution to the problem.
In support of this conclusion, your committee wishes to call particular attention to the low rents which it has been possible to achieve under the present program, and to the low incomes of the families living in the projects.
Rents actually charged in the original low-rent projects, as shown by the Annual Report of the Public Housing Administration for 1947, averaged only $27.24 per month, including substantially all utilities, such as heat, electricity, and gas. This was approximately $1.25 per month less than the average rent charged in substandard dwellings in urban areas, and indicates that low-rent housing was being made available at about the same prices which low-income families were accustomed to pay for slum housing.
The actual annual incomes of families in the original low-rent housing projects for the first 6 months of 1948 are shown in the following table:
Annual incomes of families in low-rent housing projects, percent distributions and
medians (Public Law 412 and PW A projects, first 6 months of 1948)
The income of the families admitted to the projects during the first half of 1948 are shown in the first column of this table. Over 52 percent of the families admitted had incomes of less than $1,500, and only 9.3 percent had incomes in excess of $2,000. The incomes of the families admitted averaged $1,481.
The incomes of all the families living in the projects in the first half of 1948 (as shown by reexaminations of income) averaged $1,884 per year. This average covers a substantial number of ineligible families then living in the projects whom it had been impossible to remove because of acute housing shortages, and because of a congressional prohibition against eviction which has since been repealed. All ineligible tenants are now being required to move from low-rent housing projects under a plan for gradual removal, pursuant to which they will all have received notice to vacate by the end of 1949.
In order to indicate how far down in the income scale public housing is actually reaching, it is interesting to compare the average incomes of tenants with the incomes of all urban families. The Bureau of the Census recently reported that in 1947 a figure of $2,630 per year marked the top of the lowest income third of city families, while the average income of such families in the lowest third was $1,789. The average income of $1,481 of families admitted to low-rent projects at about the same time was 17 percent below the average income of all families in the lowest income third, while the income of eligible families living in the projects averaged 11 percent below the same figure. In short, it is clearly apparent that the families admitted to, and the families living in, public housing not only come from the lowest income third, but from the lower segments of that income group.
Based on evidence such as the foregoing, your committee is convinced that the present low-rent program has been a successful pro
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gram, that it is meeting the housing needs of low-income families on an economical basis, and that it should be expanded in accordance with the provisions of the bill favorably reported by your committee.
VII. HOUSING RESEARCH
Research, which has made our Nation's competence in scientific development and industrial skills a subject of world-wide respect, should be more fully used on a larger scale to obtain more and better housing for all American families. In the judgment of your committee, this will require the authorization of a comprehensive Federal research program to the end that the already extensive facilities of our educational institutions, industry, foundations, private laboratories, and of government may be better coordinated and focused on the achievement of the housing objectives stated elsewhere in this bill. It is this kind of a Federal research program that is contemplated by this committee in title III of this bill.
The need for such a program has been emphasized repeatedly over the long period during which this legislation has been under consideration, and was a major recommendation of the Joint Committee on Housing. It has been supported during our recent hearings by witnesses broadly representative of the American people. Among these witnesses were several industry spokesmen who recognized the value of Government research to supplement the results of industry's own activities.
Perhaps the most persuasive argument for the type of research program authorized by the bill is the simple fact that all who have an interest in and responsibility for housing, need and will benefit from the results of such research. The homebuilder who faces the task of constructing more and better homes at lower prices to maintain his market will make better headway if he is in a position to apply the results of research into basic cost factors. Labor employed in home construction will he helped toward the goal of more stable employ. ment at good wages. Better information resulting from research will help the lending institutions in the wise selection of investments for trustee funds, and it will help the producers and distributors of building materials and equipment who have been severely handicapped by the traditional boom-and-bust behavior of construction activity in the past. Governments-local, State, and Federal-need more sound factual information on which to evaluate the actions they should take in carrying out their respective responsibilities in housing.
Last year, Congress authorized a limited program of housing research. Under the terms of the Housing Act of 1948, the Housing and Home Finance Agency has undertaken research in the improvement and standardization of local building codes and in the standardization of the dimensions of homebuilding materials and equipment.
This program has permitted a start in long-needed research in two admittedly serious problem areas. While valuable and tangible results may be expected from the authorization for technical research in these two areas, your committee is convinced that a broader and more comprehensive research authority is needed. The answer to the housing problem will not come from limited engineering research alone. Important as it is to seek engineering and technological progress, we cannot overlook the fact that many of our housing difficulties are economic in origin. Complementary means must be found to remove these obstacles if full use is to be made of the results of technical research. In this connection, your committee is in agreement with the testimony of the Administrator of the Housing and Home Finance Agency when he stated:
The housing problem has so many facets that it would be unrealistic to place all our hopes on any one field of action. Housing research must be broad enough to disclose the possibility of constructive action in every aspect of housing, whether it be engineering, financing, management, labor, local administration or Federal.
It is my belief that the Federal Government should therefore broaden its research and assume the leadership in analyzing all of the factors that in any way impede housing production, add to costs, prevent the improvement of our housing standards, or cast doubt on the value of housing as an investment. The formula of a progressively higher volume and lower unit costs is too successful in too many other American industries not to work in home building.
The research title clearly indicates that the Housing and Home Finance Administrator is to undertake a vigorous and realistic program of research into all of the recognized obstacles to the attainment of the housing objective set forth in the bill.
In recommending this title, your committee wishes to emphasize certain underlying considerations which will guide the administration of this legislation. In the first place, it is expected that responsible leadership will be exercised by the Housing and Home Finance Administrator in formulating and carrying out a program of comprehensive housing research. At the same time the bill recognizes that other Government agencies are now engaged in studies, experiments, and investigations which bear on one or another phase of housing, either directly or incidentally. The Public Health Service of the Federal Security Agency, the Construction Division, the Burtau of the Census and the National Bureau of Standards of the Department of Commerce, the Forest Products Laboratory of the Department of Agriculture, and the Bureau of Labor Statistics of the Department of Labor are examples. The bill calls upon the Housing Administrator to consult with and make recommendations to such other departments of Government concerning action which may be necessary to overcome existing gaps and deficiencies in the field of research. In addition, the Housing Administrator is authorized to undertake studies in cooperation with industry and labor, with agencies of State and local government, and with educational and other nonprofit organizations.
The committee also expects that the research conducted under the provisions of H. R. 4009 will be directed, insofar as possible, to those problems whose solution holds the best immediate promise of wide application by industry and local governments. It will, therefore. be necessary for the Housing Administrator to give special attention to the task of disseminating the research findings, and to promote widespread acceptance and use of the practical results of such research This is extremely important, for the benefits sought to be achieved by this program cannot be fully realized unless the practical results of technical housing research are made available in usable form and are generally accepted and used.
In this connection your committee calls specific attention to the fact that the research title of the bill, like other titles of the bill, recognizes the basic local responsibility for housing. Thus, research in local building regulations, sanitary codes, etc., will be pointed toward the development of better standards and model forms for the guidance of appropriate local officials. Communities will be assisted and encouraged to develop their own market surveys, and the results of major research activities will be made vailable for practical local application.
The foregoing approach does not represent a novel departure for governmental research activities. For a great many years, the Department of Agriculture has been responsible for a broad and continuing program of agricultural research. In discharging this responsibility the Department engages in direct research activities, utilizing the resources of other Governmental agencies where feasible, and works cooperatively with universities and other public and private research groups.
In carrying out a program of housing research, all available investigative devices must be put to work to identify the precise nature of the productive process carried on by housing enterprises. In many cases, it will be necessary to develop entirely new devices, and employ them in developing better methods of financing home production, model building regulations, health, safety, and sanitation codes, adequate guides for layout and planning, and many other such aids to the builder and the local officials with whom he must work. It is obvious that many lines of inquiry must be pursued simultaneously and that many different types of talent must be employed.
The evidence as to the research now being conducted in the housing industry presented to your committee did not disclose any indication that these activities were encompassing all of these problems, or that the results were being widely disseminated. Your committee does not feel that the complex nature of the housing industry permits this kind of a result. No particular segment of the industry is large enough or can have a broad enough economic stake to do the kind of a job that needs to be done.
In this connection, it must be recognized that most of the housing in this country is built by the relatively small-scale builder. In 1938 the Bureau of Labor Statistics reported that 86 percent of our home building was carried on by builders who constructed between 1 and 5 houses in a year. While the number of large-scale builders has undoubtedly increased since that time, particularly in the large metropolitan areas, all available evidence indicates that the large majority of our building is still done by the relatively small-scale builder. Therefore, any research program, to be truly effective, must take into account the production problems of both large and small builders, and must be concerned in considerable degree with the future development of more economical and efficient building organizations. And it must be directly concerned with getting the results of that research into the hands of the builders for practical application in actual operations.
The typical small builder today cannot afford to engage in research himself, or to overcome single-handedly, for example, the obstacles of over-elaborate building codes. Yet your committee believes that every possible encouragement should be given to these small builders, who comprise a substantial part of the Nation's small business enterprises, to expand their operations, and become better able to deal with technical, financial, and management problems. The results of technical, economic, and administrative research can be very useful to these