When are you going to have some reports on the home rule bill? Mr. BRYAN. Very shortly. They are being introduced by the day. There are so many bills being introduced, some of which have such varying and unusual ideas, that it takes us quite a little time to analyze them and digest them. Mr. HUDDLESTON. Any further questions, Mr. Schwengel? Mr. SCHWENGEL. I just want to make an observation. If we were this slow getting into motion here on the Hill, and we are awfully slow sometimes, Mr. Chairman, we would never get out of session. And if all of the departments were as slow getting their reports back as you have been, why, you would not get a lot of legislation that has national importance. This is an important area, and it seems to me that you people ought to be very jealous of your office and have the opportunity to serve here Mr. BRYAN. Very frankly I am, sir, and may I say, sir, that we have filed a great many reports. And I think it might be helpful to the committee, and particularly Mr. Schwengel, if I should give him a list of those reports. Maybe he might feel that we are doing something. Mr. SCHWENGEL. Would you do that? Give me a list of them. I would like to know about it. I would like to know what you do with 50 assistants. That is all, Mr. Chairman. Mr. BRYAN. We sue people and they sue us. We get sued quite frequently. We have to represent the District in the courts and we have a lot of work down there. Mr. SCHWENGEL. Yes, the State of Iowa is busy, too. Mr. BRYAN. Thank you, Mr. Chairman. Mr. HUDDLESTON. The next witnesses will be from the Housing and Home Fianance Agency, Mr. Tom Davis, the Chief Counsel of the Cooperative and Special Program Section of the General Counsel's Office, FHA; Mr. Harry E. Johnson, Director of the Cooperative Housing Division of FHA, and Mr. Gerald Chowell, Cooperative Management, FHA; and Mr. Burton Wood, Congressional Liaison for the Federal Housing Administration. Will you gentlemen come around, please? STATEMENT OF TOM DAVIS, CHIEF COUNSEL, COOPERATIVE AND Mr. HUDDLESTON. Who will be the spokesman for FHA? Mr. HUDDLESTON. Mr. Tom Davis? Mr. DAVIS. Tom Davis. Chairman Huddleston, we are very pleased to be here. I can advise that at this time we were told that the Bureau of the Budget has no objection to our report, which is that the Housing agency recommends the enactment of this legislation. It is designed to provide specific and detailed authority for condominium ownership of real estate within the District of Columbia, and this would facilitate the development of condominium projects and the insurance of residential condominium mortgage insurance by the Federal Housing Administration Mr. SCHWENGEL. Just a minute, sir. I am from Iowa. What is the meaning of the word "condominium"? Mr. DAVIS. That is a Latin term. Judge Munter mentioned it before you came in. It means joint dominion or joint ownership. Mr. SCHWENGEL. Joint ownership? Mr. DAVIS. Or joint dominion, depending on which Latin scholar you refer to. This bill would facilitate the acquiring of loans under FHA section 234 of the National Housing act, which was added to the National Housing Act by the act of 1961. Section 234 does not mention the word "condominium." None of our forms mention "condominium," although the word is creeping in now, because when we first heard the word "condominium," we thought it would sort of put people off. So our program is called a plan of apartment unit ownership. We Mr. SCHWENGEL. And partnership ownership? Mr. DAVIS. "Plan of apartment unit ownership." We are talking about the owning of apartments rather than the owning of a condominium unit. After the bill came into effect, and after people started getting in-terested in it, we found that the term "condominium" is very glamorous and everyone wants to use the word "condominium," and I am quite sure that when our forms start being revised, they will show more of the condominium aspect, or the use of that word. Mr. SCHWENGEL. I hope that they will improve the education of the District before they do, because people around here want to know what you are talking about, and unless you do Mr. DAVIS. It is a tricky word. Sometimes we talk of it as "pandemonium," sir. Mr. SCHWENGEL. You mean you want more action and less glamor? Mr. DAVIS. Right. We were asked when the bill was passed to get out a uniform statute, which our section did get out, and which, together with the condominium kit, showing all of the FHA forms, all that have been sent to all the legislative sponsors of this in the various States. We have now about 9 States that have enacted it or 10, and there are about 28 or 29 which we are reviewing and which we have proposed or advised them that we have no objection to their enacting the bill. This bill here is satisfactory to deal with FHA insurance. Mr. SCHWENGEL. And what it does is, it would make it possible for individuals, among other things, to own apartments? Mr. DAVIS. That is right, own the apartment unit, in an undivided share in the common elements. Mr. SCHWENGEL. And an individual apartment within an apartment unit? Mr. DAVIS. Yes, within the building.. Mr. SCHWENGEL. I was author of a bill similar to this in the Iowa Legislature 14 years ago. Mr. DAVIS. Oh, is that right? Mr. SCHWENGEL. The people in Iowa were slow to take advantage of it, but I understand now that the people are using it. It has been satisfactory. Mr. DAVIS. Incidentally, the model statutes containing many of these provisions are the same. I understand that the Council of State Organizations in 1962, or maybe it came out this past fall, did publish the model statute and recommended it to the various States as a model with which to work. Now, I would like to make the FHA position quite clear on it, and that is when we review legislation, we review it against our requirements, and then when, if sometimes the parties wanting to deal with conventional loans rather than FHA loans, put in certain things, that will allow them to do things which we would not be interested in or which if they did do them, we would not make it eligible for insurance that is what we call the specific and the flexible part of it. We would like to see bills that are flexible enough, that not only please the FHA but would please the conventional setup for condominiums, as well, but if they are going to please the conventional side, we would like to see that there are as many permissive provisions in it which would allow our particular concept to be used in the form which is used to create it. I am happy to say that this does Mr. HUDDLESTON. This meets all of your criteria? Mr. DAVIS. That is right. Mr. HUDDLESTON. Any questions, Mr. Schwengel? Mr. HUDDLESTON. Thank you, Mr. Davis and gentlemen. Mr. SCHWENGEL. My only suggestion is that you take that word "condominium" out of the vocabulary. Mr. DAVIS. Well, it is coming in, now. Mr. HUDDLESTON. I think if you other gentlemen have statements which you would like to file with the committee, following Mr. Davis' remarks, you may certainly do so. Mr. JOHNSON. I might add, that a number of other States other than those mentioned here today have passed this legislation. Perhaps I could read them for you. I think they add up to 19. It gives you an idea of how rapidly the States have been moving on this: Alaska, Arkansas, Arizona, Georgia, Hawaii, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Oklahoma, South Carolina, Tennessee, Utah, Virginia, West Virginia, Washington, and Puerto Rico, of course, which had it for some years. It is pending in 22 other States; that is, legislation which has been presented. Mr. HUDDLESTON. Do you have a list of those that we can provide the reporter, or if you do not, just read them off rapidly. Mr. JOHNSON. Yes, I will check with the reporter and make sure that he has them. Mr. DAVIS. I would like to add one other thing. In States like Florida and California they are interested in getting the legislation now. We are in the process of reviewing their legislation and we have approved the Florida one and the California one, but they have also started condominiums in those States because the framework of their laws were such that they could do it by the enabling declaration, and they did have separate taxation, they assured us. So we are not pushing for legislation, although we do believe that in the general concept legislation, where it is needed, should be adopted in all cases to sort of regularize this concept. And we are told by our District of Columbia advisers-the bar and so forth that it is needed for the District of Columbia in order to make it eligible. Mr. SCHWENGEL. Let me ask you this-you say you would like this legislation written so that private money and private interest can get into this area as well as the conventional FHA loans. Is that right? Mr. DAVIS. That is right. Mr. SCHWENGEL. Would you say that this legislation encourages private investments? Mr. DAVIS. It would be both good for FHA and conventional, private. Mr. SCHWENGEL. Does it encourage private investments, in any way? Mr. DAVIS. Oh, yes, because you could not do a condominium, we are advised, in the District, unless you had this legislation. Mr. SCHWENGEL. So this would serve the interest of private enterprise? Mr. DAVIS. Oh, yes. Oh, yes, as well as FHA insured loans. Mr. DAVIS. That is right. Yes, sir. This would definitely encourage activity in the area, and it also makes it legally possible, which it is not now. Mr. SCHWENGEL. And besides that, it makes for a responsible citizenship, because when the people own their apartments or own what they live in, generally speaking, they are better citizens. Mr. DAVIS. I subscribe to that wholly. Mr. SCHWENGEL. Thank you. Mr. HUDDLESTON. Thank you, Mr. Davis, and gentlemen. (The following reports were subsequently received by the subcommittee:) HOUSING AND HOME FINANCE AGENCY, Subject: H.R. 4276, 88th Congress (Representative Whitener). Chairman, Committee on the District of Columbia, DEAR MR. CHAIRMAN: This is in further reply to your request for our views on H.R. 4276, a bill to provide for the creation of horizontal property regimes in the District of Columbia. The Housing Agency recommends enactment of this legislation. It is designed to provide specific and detailed authority for condominium ownership of real estate within the District of Columbia. This would facilitate the development of condominium projects and the insurance of residential condominium mortgage loans by the Federal Housing Administration under section 234 of the National Housing Act, added to that act by the Housing Act of 1961. The Bureau of the Budget has advised that there is no objection to the presentation of this report from the standpoint of the administration's program. Sincerely yours, MILTON P. SEMER, (For Robert C. Weaver, Administrator). HOUSING AND HOME FINANCE AGENCY, Hon. GEORGE HUDDLESTON, JR. DEAR MR. CHAIRMAN: In a telephone conversation between the clerk of your committee and Mr. Tom L. Davis of the Federal Housing Administration, you asked for our views on a proposed amendment of section 11 of the bill (H.R. 4276) to provide for the creation of horizontal property regimes in the District of Columbia. The amendment would permit 75 or 80 percent of the coowners of a building constituted into a horizontal property regime to terminate and waive the regime. The bill as introduced would require agreement by all the owners for a termination and waiver, except that in a case where two-thirds of the building is destroyed by disaster, the coowners of three-fourths of the project could waive and terminate the regime. This Agency favors the present provisions of section 11. The proposed amendment could jeopardize the rights of the coowners of a condominium project. If 75 percent of the coowners were permitted to terminate the regime, conversion of the structure could be permitted for nonresidential uses or some speculative uses without regard to the desire of some of the property owners who purchased units with the intention and desire to continue living in the structure indefinitely. There is less likelihood of conversion to speculative or nonresidential uses injurious to the coowners under the disaster destruction provision in the bill since there would not generally be an incentive in such cases for indivisual owners to wish to stay in the structure. As requested by the clerk of your committee, we submit, as a drafting service, the following amendment which would affect the purpose of the proposal if your committee adopts the amendment: On page 12 strike out line 8 and insert in lieu thereof the following: "All the coowners or the sole owner, or such lesser percentage of coowners as may be specified in the declaration but in no event less than 80 per centum, of a building constituted." Sincerely yours, MILTON P. SEMER, (For Robert C. Weaver, Administrator). FEDERAL HOUSING ADMINISTRATION, Hon. GEORGE HUDDLESTON, Jr., Washington, D.C. DEAR MR. HUDDLESTON: I wish to express my thanks to you and your committee for the courteous reception accorded to representatives of the Federal Housing Administration at the recent hearing on the District of Columbia horizontal property bill (H.R. 4276). Pursuant to your request to Mr. that enabling legislation has been Harry E. Johnson, our information indicates enacted in the following jurisdictions: To the best of our knowledge, proposed legislation has been introduced in the following jurisdictions: |