-----------------------------------------------------------------------▪▪▪▪▪▪▪---------HOUSING UNITS PER YEAR, ASSUMING STRAIGHT LINE INCREASE TO MEET TOTAL GOAL OF 26 MILLION UNITS IN TEN YEARS

250 M

OF 452,000 PLUMBERS,
259,000 ASSUMED WILL
BE IN RESIDENTL.WORK

1976 1977 1978

205,000 PLUMBERS

Let's consider this chart, which is concerned with plumbers but which would be similar for any of the building trades. Let's assume that (1) Half of our plumbers are engaged in residential work; (2) The anticipated annual 1.7% increase in our work force will apply to plumbers; (3) All these additional plumbers will become occupied in residential work; and (4) We will expand housing production on a straight line basis to meet our housing goals by 1978. Then we will suffer a shortage of 205,000 plumbers nine years from now!

Factory built housing permits semi-skilled workers, with the use of wall framing machines, pre-fabricated plumbing systems, pre-assembled utility cores, and other structural and technical components, to build and complete housing units in a controlled environment under optimum conditions. Consequently, the labor time in a factory-built dwelling unit is only a fraction of what is required to construct a similar unit on-site.

That's why we must look at factory-built housing. That's why factory-built housing must succeed, or we will never be able to produce the homes and apartments needed to house our expanding population and our underprivileged citizens in a comfortable, dignified, decent way.

It is not clear today whether factory housing and industrialized processes are less costly than our present methods, but it is certain that we must work at it today, and begin to develop it today, so that tomorrow we will have a different production method that will result in economies over our anticipated site-built costs of tomorrow.

▪▪▪▪▪▪▪▪▪▪ Indicates $11,000 Direct Cost including $4,400 for Field Labor, Compounded at 10% Annually.
Indicates $11,000 Direct Cost including $1,200 for Field Labor, Compounded at 10% Annually
and $1,400 for Shop Labor Compounded at 5% Annually.

Let's look at what we anticipate may happen to costs as we transfer labor from the field to the factory. Let's assume direct construction costs of $11,000 for both site-built and factory-built houses. The lower labor input in total man-hours required by manufactured housing, the lower hourly wages for factory labor, and the smaller annual increase in these wages compared to anticipated increases in field labor rates, result in direct increases by 1975 of $4,175 for site-built houses and only $1,709 for manufactured houses.

Here, then, is our foreseeable economy in industrialized housing—a reduction of total labor time, a smaller requirement for skilled craftsmen, and a lower rate of annual adjustment.

We foresee other building costs as being constant. A bathtub, or a sheet of plywood, or a roof shingle will cost X and Y and Z dollars in 1975, regardless of whether they are installed on-site or in the factory. However, factory-installed material is less vulnerable to loss, theft, and damage than the materials which today lie around a building site for days or even weeks. While difficult to measure the total cost effect, we know it is substantial.

If we continue our present course, we may outprice our markets. As the real need for adequate housing increases, the housing market may decrease because of the inability of our people to buy higher and higher priced homes. Our prices— Levitt's prices-have risen approximately 50% in the last five years. Our potential customers, the people to whom we sell our houses, have not enjoyed anywhere near a similar appreciation in their incomes. So the base of our market has become smaller. And it will continue to shrink unless we can contain our costs. Certainly, at least in so far as the house structure is concerned, we can better contain and control and limit production costs in an industrial environment.

The present constraints and burdens-zoning restrictions, building codes, union featherbedding, increasing land costs, and tight money-also frustrate production of tasteful, safe, comfortable, yet economical housing units. These problem areas have been investigated and reviewed and discussed and considered ad nauseum, but they are still huge obstacles to the housing goals we want to achieve. It is time-past time-that local and state authorities and even our Federal Government acted effectively to remove these blocks! Industrialized housing is in its infancy and needs the assistance of a new sensitivity to housing production in place of the hindrances of our present archaic land planning, unrealistic building specifications, and needless yielding to special interest groups. Industrialized housing needs the commitment of research and development funds to an extent beyond the resources of any private enterprise. We need the means to discover and uncover what is acceptable to a mass market in order to justify mass production. Then only then-can we design and produce housing to meet those standards. We recommend that the following specific actions be taken now: First, we ask that the Congress support the concept of performance standards for residential construction rather than the arbitrary and often outdated material specifications in many local building codes. We suggest legislation establishing a National Institute of Building Sciences, the effect of which will be to encourage American municipalities to evaluate new products and techniques quickly and fairly as provided for in the successful Agrément and D.I.M. systems in Europe.

Second, we request that Congress exert its influence so that sense and order replace the jumble of zoning restrictions we must now contend with and which inhibit intelligent use of our land.

Third, we believe that Operation Breakthrough, a brand new HUD program designed to encourage and facilitate development of useful innovative building techniques, should be helped by the enthusiastic and constant support of the Congress.

Fourth, we suggest increased funding for housing under Sections 235 and 236 of the National Housing Act so that private enterprise may invest in the design and development of products satisfying these special requirements without the fear that the programs may be aborted.

Fifth, we urge authorization for variable rate mortgages so that housing can attract its fair share of available financing by being able to assure lenders an equitable return regardless of prevailing interest rates.

Sixth, we ask for favorable consideration of inclining rate mortgages so that home owners may repay their loans incrementally as their personal income increases.

Seventh, we believe that pension funds and insurance companies as well as financial institutions should be required to invest specified minimum percentages of their resources in residential mortgages.

Eighth, we advocate that the Congress allocate substantial funds solely for the research efforts required to develop satisfactory and economical techniques for industrialized housing. An investment of only one-tenth of one percent of our annual budget is suggested.

We have likened our dream of future housing production to the industrialization of our automobile industry, but we have not yet created comparable conditions so that the functions of highly mechanized, extremely efficient, tremendously economical assembly lines in Detroit can be utilized to provide a clean and comfortable home for all Americans.

Hammering sticks together by hand under a factory roof instead of hammering sticks together by hand in an open field is not an answer to our problem, but only a first step towards its solution. As we develop satisfactory production techniques, we must also work towards market receptivity of industrialized housing.

Until and unless government at all levels acts to clear the way for industrialized housing, we foresee no breakthrough, we foresee no low-cost housing method, we foresee no real answer to the increasingly critical housing inadequacy of today. We can foresee and we do anticipate gradual technological development and a partial containment of rapidly escalating costs. Unfortunately, we also foresee failure to meet even a major portion of our announced housing goals during the forthcoming decade.

With government help, with the effective action required to overcome and eliminate today's housing obstacles, industrialized housing could provide a decent home for every American.

Chairman BOLLING. Thank you very much, Mr. Biederman. I would like to get unanimous consent to include the various charts and additional materials provided by both the witnesses. Without objection they will be included. The charts will appear with Mr. Biederman's prepared statement (see pp. 15, 17). The publication "Breakthrough" and "Request for Proposal No. H-55-69, supplied by Mr. Finger will be included at the end of today's proceedings (see pp. 53-202).

I would like to say that this subcommittee does not operate under the time limitation of members that our full committee and other subcommittees do. We count on the individual member restraining his length of questioning himself, rather than having a 10-minute rule.

Then I would like to welcome to the subcommittee our new member, who is the son of a very distinguished member who served here many years, and a very distinguished member himself in his own right. I am particularly glad he is on this subcommittee, because I think he will be a Member of the House who will appreciate the way the subcommittee works, which is to try to get very little publicity and try to find out some new ideas which might be helpful over the long run. So I am delighted to have Representative Clarence Brown with us.

You now have the floor, Mr. Brown.

Representative BROWN. Thank you very much. I am sorry to say that I could not get here for my first meeting on time. That is a bad precedent to set, I suppose, but not an unusual one.

I thank you, Mr. Chairman, for the words of welcome and for including in the comments recognition of my service as distinct from that of my predecessor. That is the sort of courtesy that I do not encounter frequently.

I am pleased to be on this subcommittee and I am interested in the comment that you are after solutions, not publicity. That also is somewhat unique.

I have but one question on the testimony which Mr. Biederman and Mr. Finger have given. I perhaps am asking a question that has al