ready been answered by your testimony, and again I am sorry if that is so. Regarding the use of industrialized housing in the company operation that you represent-has this been undertaken outside this country? I know that Levitt has operations in various parts of the world.

Mr. BIEDERMAN. No, we have not been involved in industrialized methods save an assembly line technique for on-site construction as opposed to factory production of housing. We have been in competitive situations in France, for example, where we have a project, against industrialized system. We really can't compete on high-rise construction with site-built construction.

In France we are presently in the process of finishing our feasibility study for the future of our own company relative to industrialized housing and we expect in the fall of this year to be finalizing our thinking and making the firm decision one way or the other as to what approach to take relative to industrialized housing.

Representative BROWN. In your foreign experience, has there been a good deal of labor opposition or have you found that this is not as significant a factor abroad as it is here?

Mr. BIEDERMAN. We have not seen evidence of any labor opposition in other countries to industrialized housing. If anything, it opens up the construction industry to a need for more labor rather than less, because the volume increase is so dramatic.

Representative BROWN. In your French experience, have you picked up information or patterns which will benefit you in future operations elsewhere, here or abroad?

Mr. BIEDERMAN. Well, personally, I have gotten to enjoy the 2hour lunch hour which I picked up there.

Representative BROWN. I did not have that kind of French experience in mind.

Mr. BIEDERMAN. From a company standpoint, however, we have been exposed in France to what they call the agrément system, which translated rather loosely into English is the "agreement" system of building code, which seriously affects, by the way, coding. What that amounts to is a quasi-governmental agency which is financed partly by the French Government and partly by the sale of publications and charges for the service they perform. It is very interesting in the way that it works.

There is a national agency called the CSTB, Centre Scientifique Technique du Batiment, which is basically a center for scientific and technical development of building. If anyone has an innovative technique that they think makes good sense, or a building product, they go to the CSTB, they pay a fee relative to the magnitude of what they are substituting. The CSTB approves tests, approves, or rejects the process. If they approved, the process is granted an agrément. Now, no local community has to accept that agrément. No local community has to accept a builder's insistence that he wants to use that technique. However, if the community does not accept the technique, they are not eligible for federal subsidies for sewer, water or municipal advantages; they are not eligible for federal funding for schools; they are not eligible for highway access from a major road to their village.

On the other hand, the builder does not have to use processes that are accepted by CSTB. He can use whatever processes he wants. But

in France, there is a 10-year collapse liability placed on anyone who either supervises or constructs anything. No insurance company in France will give insurance to any builder who uses anything that is not approved by the CSTB. So it is a very nice, pleasant form of clubbing everybody into accepting standards. And the CSTB does seriously remain above reproach. It is composed of a constantly changing force of experts. It is composed of members of the building industry, members of the manufacturing segments that service the building industry, members of the educational community, and these boards constantly change in character and represent local elements as well. There is not just one board that sits in Paris, but there are boards all over France.

For the first time, after having been in the building industry in America all my life, and then working in France for 2 years, my first exposure to it was like a big double-barreled chocolate malted. It was a refreshing change. I think if we can develop that same technique here, and I think there is no reason why we could not-incidentally, I mention in here the proposal for the establishment of an institute of building sciences, which would perform that very, very same function. If there is one significant item I picked up in my experience in France, it is most certainly that.

Representative BROWN. Are you satisfied with the quality of the study effort made of the new methods by the French Government? Mr. BIEDERMAN. It is indeed thorough.

Representative BROWN. Scientifically sound also?

Mr. BIEDERMAN. Yes. As a matter of fact, it is not a short process. One American heating manufacturer wanted to have his furnace approved in France so that builders like ourselves could use it. It went through a 39-stage battery of tests by 15 different segments of the CSTB, none of which, incidentally, was red tape. They were all sound testing procedures. And the process takes close to a year to 15 months. Then it only gets a partial agrément. It gets a complete agrément after the system has been used and reviewed for a period of 2 years by the CSTB. So it is a very thorough system. Obviously, from time to time, there are some politics involved, but overall, it is a very clean and very effective operation.

I might add that the builder, as well as the owner, ends up being satisfied with the system. The mayor of a small town, for example, does not have to depend on farmer Brown, who happens to be the local building inspector. They can be going to a higher authority composed of experts to certify the quality of a technique or a system.

Representative BROWN. Did you say that the expense of the userfee basis is not a large one?

Mr. BIEDERMAN. No; it is directly proportional to the magnitude of the innovation or the process submitted. If it is a small item, it is a small fee. If it is a major undertaking, it is a major fee.

Representative BROWN. Thank you.

Thank you, Mr. Chairman.

Chairman BOLLING. Mr. Moorhead?

Representative MOORHEAD. Thank you, Mr. Chairman.

Mr. Biederman, you suggest the establishment of a national institute of building sciences in the United States. Would you recommend that it be given the same kind of authority as the French institute that you describe?

Mr. BIEDERMAN. Very definitely. If it were not, it would not be effective.

Representative MOORHEAD. You do not think it can be done by example or exhortation or the like?

Mr. BIEDERMAN. No. That is not to say-I am not proposing here for a moment a national building code. These are simply national standards that would vary from one part of the country to another, but it would take out of the hands of a local building code the determination that, and I keep on going back to the same example, 2 by 4's 16 inches on center because somebody once built a barn and had them further apart and the barn fell over. If the thing does not have the clout, if the institute does not have the clout, then you might as well not go through the effort.

I, incidentally, would have this institute list all the existing agencies that are present in this country right now-UACI, ASTM, and so forth. I would try to have the institute structured under an apolitical institute or something that did not have political overtones that would be widely respected in the country, something like the National Academy of Science.

Representative MOORHEAD. I take it, when you say you would get no FHA insurance, you would get no urban renewal, no sewer and water advantages, and so forth, unless you follow the standards set by the national institute. You mean that you would have, if not a national code, a series of codes that would be nationally enforced, do you not?

Mr. BIEDERMAN. No; a series of performance standards and we should be very clear as to what we mean by performance standardsas opposed to material standards. If I may be repetitive for a moment, a wall should be required to do something. It should be required to support a certain load, a certain snow load, a certain wind resistance. It should not necessarily have to be made out of either papier mache or wood or steel or whatever; as long as it performs to the satisfaction of the requirements, it should be allowed. These standards would vary. For example, in California, a wall could be required to do something far more than a wall in New York because of the earthquake problem. Representative MOORHEAD. But would the decision be made in Washington as to how strong a wall should be in California?

Mr. BIEDERMAN. No; this national institute would have a group of experts who were, conceivably, in California, who are most familiar with the California problem. It would have a central office in Washington, but only to serve as a clearinghouse.

Representative MOORHEAD. Secretary Finger, does HUD or do you personally have any position with respect to this national institute (a) should it exist, and (b) should it have a clout of the type described by Mr. Biederman?

Mr. FINGER. Let me make a few comments on it. I am familiar with the proposal and I see some potential concerns as well as benefits in setting it up. But at the same time, I believe that some move toward performance as a measure of the ability of a house to provide what's expected of it is necessary; some move in that direction is clearly indicated.

Perhaps as an indication of it, I should describe the approach that we are including in this Operation Breakthrough program that recognizes this kind of a need. One of the major problems that we face is

the variability of building codes that specify how things are to be done as Mr. Biederman indicated, rather than what the system is to provide in terms of performance. There is a great variability throughout the country. Also, there is, in many of these codes, an inability to accept new features, new ideas and new concepts that may provide better performance and performance that is more useful in the house while reducing cost. What we are proposing to do is to go through an extensive test program on each of the new features that is proposed to us in the response to the requests for proposals that we have been sending to the industry. We will test and evaluate those features through private laboratories, through the National Bureau of Standards, through the Forest Products Test Laboratory of the Department of Agriculture. Then, we have just signed a contract for a combined group of the Academies of Science and Engineering. They are in the process now of establishing that group to validate the test results that is, to review the test procedure, the measurements made, and the final results, and to assure that the tests do in fact provide the evaluation that is necessary.

Now, at that point, after passing the necessary tests, we in the Department of Housing and Urban Development would accept any proposal that comes in and propose to use that concept as suitable and will provide FHA insurance, will provide the necessary subsidies and supplements. So we are offering the carrot and providing an incentive for use of these tested concepts.

We will also be asking local communities, local officials and State officials, to accept that HUD approval, which is made on the basis of thorough testing and evaluation, as assuring the acceptability of that house or building system in a local community, regardless of what the codes now require. In other words, we are saying that the local community should accept that HUD approval based on test and evaluation that has been performed by capable laboratories, validated by the Academies of Science and Engineering as sufficient proof of the suitability of a concept to permit it to be installed in their areas.

Further, rather than holding a club, we are taking the approach of providing an incentive and providing carrots for participation in this program. We are saying that we will earmark HUD housing-program funds, rent supplements, homeownership subsidies, to sponsors and developers and local housing authorities who come in to propose to use these high-volume production approaches and building concepts that are selected by HUD after this competitive evaluation of proposals. We are also saying that we will earmark or give priority consideration for the various grant programs that HUD has-sewer and water grants, community facilities grants, open spaces grants, urban renewal allocations we will give priority to communities that participate in the program. So rather than holding the club and saying, we will not consider any that do not accept these approaches, we are providing an incentive to join with the program.

Representative MOORHEAD. I take it, Mr. Biederman, you say that is good but it is not enough.

Mr. BIEDERMAN. That is a partial fact. I would like to add that you can interpret that one of two ways. The French Government, for example, does the same thing. They say that for those builders that use CSTB-approved techniques, then the home buyers of those houses

are eligible for Federal subsidies for the purchase of those houses. Now, that is the positive way of looking at it and we get back to the old question, is the glass half empty or half full. I can take the same statement and say if you do not have CSTB approval, then your home buyers can't have the subsidies. We are saying basically the same thing.

I would like to add, incidentally, that England, France, Germany, and Holland, not to mention Denmark and Sweden, have agreement systems and have for several years. The experience these countries have had with these systems has been remarkably effective. Builders from other countries in the industry come here and meet with us-I do not know whether Mr. Finger has had the same exposure-but they are shocked by the number of codes and contradictions that we go through.

Gentlemen, I think whatever system we set up, this is a tremendous stumbling block in both the aggregation of the market and the ability for this country to industrialize. If we relate it to the automobile industry, you can imagine what would happen to the automobile industry if a windshield had to be three-quarters of an inch thick in Chicago because they have lots of hail and a quarter of an inch thick in New York and the tires had to be 17 different sizes in 24 different States. It is the same kind of thing. The automobile industry has grown because of standardization and the ability to produce lots of cars on the same line. That is what I am saying is necessary.

Representative MOORHEAD. What are the leading U.S. corporations in size? Can one of you gentlemen in industrialized housing tell me? Mr. FINGER. I think you think primarily of sectionalized type construction and as Mr. Biederman indicated, Levitt does system building to a large extent; mass production on site. National Homes does work along those lines. The mobile home people, of course, are the prefabrication people building_modules-Guerdon Homes, for example. Stirling-Homes uses volume production methods. There are many others like Kingsberry, Skyline, Redman, Boise Cascade, and others. There are concrete concepts as well that exist here in the United States.

I think, as the chairman mentioned earlier, the problem is not our ability to do it or the technology involved, because I am really convinced that we have that. It is all the other factors associated with the process of building, of providing housing to the users, that creates our difficulty.

Representative MOORHEAD. In Pittsburgh, we have just worked through what I think would be an industrialized housing concept under 221 (d) (3). It is to be built by a subsidiary of United States Steel Corp. I might say that word of your interest in industrialized housing has not reached the local and regional offices, because we had a heck of a time getting it approved., We had to get final approval in Washington, and it was delayed so long. I think your interest in this approach should be distributed throughout the HUD regional and

local offices.

Mr. FINGER. Mr. Moorhead, I would say that one of the obstacles in this process is our own processing; the red tape within our own departmental structure, on proposals along these lines. We are working on trying to assure that everyone is well informed on the need