Mr. WEAVER. In the case of FHA, a number of rather major innovations or changes have been made or are underway to avoid manpower increases which otherwise would be necessary to control a constantly growing insurance system. The most conspicuous of these, probably, is the expanded use of the most modern high-speed electronic computer equipment for accounting, statistical, and other applications. There are other significant changes in methods of operation which I will not take time to enumerate now, but which Commissioner Brownstein is prepared to discuss with you at your convenience.

FNMA ACTIVITIES

At the present time, FNMA is playing a relatively passive role in the general secondary market, being very active neither in purchasing nor in selling mortgages. This is normal and appropriate to FNMA's function in the present state of the market. It can change at any time, however, and indeed we do project some moderate increase in both sales and purchase activity above current levels in the budget year. However, no increase in employment is proposed.

PROGRESS IN SECTION 221 (D) (3)

A key factor in FNMA's present activity is its backstop role for the program under FHA section 221 (d) (3). This program has already proved to be a successful way to provide rental housing at reasonable prices for families of moderate income. More recently, it shows real promise as a means of making some headway in the vexatious and obstinate problems of rehabilitation-a field where everyone has long been agreed that something should be done, but where most things which have been attempted have shown meager results. The budget projects a substantial increase in activity under 221 (d) (3) in 1965, both in general and for this specific item of rehabilitation of existing properties.

LOW RENT PUBLIC HOUSING PROGRAM

In public housing, we expect to exhaust this year the remaining authorizations for new units. The budget contemplates continuing the present program at the level of recent years; that is, about 35,000 new units per year. Authority for these units is provided in the pending housing bill. In addition, the bill would authorize certain new and supplementary approaches to the problem of housing low-income families. However, these are new things rather than the continuation of an existing program, so they are not covered in the budget before you. The administrative budget thus provides for an increase of only 30-odd positions. If allowed, these would provide the first increase in employment in nearly 5 years, to handle a management program now approaching the 600,000 unit mark.

For the programs and activities administered in my office and by Community Facilities Administration and Urban Renewal Administration, we have some problems again this year resulting from the timing of legislation in relation to appropriation action. In connection with public works advance planning, all authority for new appropriations will have been exhausted this year-assuming the Congress acts favorably on the pending supplemental request for $4 million to restore to the revolving fund advances lost by reason of forgiveness under the accelerated works program. Additional appropriations for the fiscal year 1965, therefore, must await new authorizing legislation. The same is true in other areas. We shall place the material in the record.

(The information referred to follows:)

LEGISLATIVE SITUATION OF VARIOUS AREAS

The same thing is true in varying degrees for four other programs: urban planning grants, open space land grants, low-income housing demonstration grants, and the housing for the elderly fund. The following table shows the appropriations requested in the 1965 budget for these programs, the amounts currently authorized, and the additional legislative authorizations required:

INCREASE FOR GENERAL AGENCY SUPERVISION

In only three programs are we requesting any administrative increases worth mentioning here. The first of these is the activity which is called in the budget "General agency supervision," which, very briefly, includes the staff which assists me in supervising and coordinating the Agency's activities in an overall way, and performing those functions which fall upon the head of an agency. The 25 additional positions proposed are pinpointed to meet one of two kinds of needs: Specific jobs that need to be done, for which we are not now staffed; or areas where I am convinced that some additional investment of effort will yield large returns in better planning and management of our programs. An example of the former is the task of codifying existing Federal statutes dealing with housing and related community development programs. The need for such a codification is widely recognized, both in and out of Government. It is a long, detailed, and technical job, which we estimate will require about three people for 2 to 3 years, but we think it is well worth the effort. An example of the latter category is the proposal to add one additional professional in each region to strengthen our approach to comprehensive market analysis, especially in communities where several Agency programs are operating in the same market. To avoid overlapping, conflicting judgments, and just plain mistakes, they should operate from the same data, the same assumptions, and the same evaluations of market conditions.

INCREASE FOR URBAN RENEWAL PROGRAMS

We are also requesting an increase of 104 positions for the urban renewal programs. As the committee knows, new urban renewal projects under title I have been coming into the program at a rate of $600 to $700 million in Federal grant reservations each year for the last several years. Rather than summarize the increased workload this scale of activities has produced, let me refer you to the table in the justifications which appears on page 0-50, where the principal items are detailed. I would like to note in passing, however, that these figures show a considerable acceleration of activity in the later stages which represent actual urban renewal accomplishment-relocation, land dispostion, and redevelopment.

URBAN RENEWAL STAFFING REQUIREMENTS

Senator PASTORE. I have a chart here that goes with this 0-50, and if there is no objection, I would like to have it in the record. (The chart referred to follows:)

Comparison of staffing and indicators of program growth, fiscal year 1961 with 1965 [Dollar amounts in millions]

Mr. WEAVER. An increase is also proposed in connection with the program of direct loans for housing for the elderly, where we expect greater activity next year.

Mr. Chairman and gentlemen, with these introductory remarks I commend our budget to your consideration and invite your further questions. My associates and I will try to be as helpful as we can in connection with any matters you may wish to develop.

HOUSING FOR THE ELDERLY

Senator PASTORE. I am very much interested in this program for the housing of the elderly. I would hope you could elaborate on this. Mr. WEAVER. Well, sir, as you know, we have three programs of housing for our senior citizens.

If I may start at the bottom and work to the top-because, obviously, the one at the bottom for lower income is the largest, as it should be the program in public housing. Even before we began to build houses specifically designed for senior citizens, we did have older people living in public housing. In recent years, we have looked at this as a special type of housing which should be designed to meet special requirements. So that of the housing that has been provided, public housing, under the provisions of the Housing Act of 1961, the first one of this administration, about 50 percent of the units have been designed for elderly persons.

At the present time we have some 130,000 senior citizens in residence in public housing. That is persons 62 years and over.

Senator PASTORE. What is that în proportion to the demand?

Mr. WEAVER. I would say it doesn't approach the demand. It is very difficult to say what the demand is, except that it is much, much larger than our resources provide for.

The reason I say this is there are several variables here.

We know, for example, that there is an extremely large proportion, particularly of the low-income elderly families, who are now living in substandard housing. In addition, some of them are living in housing which may be decent housing, but it is ill adapted to their needs.

On the other hand, it is fallacious to assume that because this is true all these people are in the market for other housing.

Now, there is a great attachment to a house. I know that from my own experience. It is very difficult to say quantitatively what the demand is.

We have been doing some studies to get better estimates. But we do know it is much, much greater than anything we have been able to satisfy.

DEXTER MANOR PROJECT, PROVIDENCE, R.I.

Senator PASTORE. I am referring to the Dexter Manor up there on Broad Street in Providence. Does a project of that kind really pay for itself?

Mrs. MCGUIRE. It doesn't pay for itself in terms of rent income being sufficient to pay all the expenses. The rent income does pay the operating cost. But, generally speaking, the income of these older people is quite low. Across the Nation, the average is $1,437, the average income.

Senator PASTORE. So the original investment is a matter to be written off?

Mrs. MCGUIRE. In additon, you may recall, Senator, in 1961 Congress made available funds to the extent of $120 a year per unit occupied by the elderly, because so often their income is so low they cannot even defer the operating costs. We are paying now about $109 per unit per year. This permits the housing authorities to keep the rent scale low enough.

Senator PASTORE. The reason I raised the question is that I get letters about this every day. It is really fully occupied, isn't it?

Mrs. MCGUIRE. Yes. And there is a long waiting list. We calculate that for many of the occupied projects like Dexter Manor, the waiting list is approximately 6 years.

Mr. WEAVER. I think the argument I made would apply more to some of the other programs than to the low rent public housing program. They are the middle income direct loan programs, where the rents are higher. And then under the FHA, which is the nonsubsidized, both for nonprofit and profit. I might add for the record under our public housing porgram, and under our direct loan program, there are income limitations.