(4) The District of Columbia without this enabling legislation would be placed in a noncompetitive position with Maryland and Virginia in having at their disposal the same tools for providing incentive for the creation of new and badly needed housing.

(5) Property ownership can be a powerful force in property maintenance and thus a bulwark against the creation of what might otherwise become slum

areas.

We urge passage of this legislation in the immediate future.

Mr. HUDDLESTON. We would like to have just a very brief statement as to the position of the Mortgage Bankers Association on this condominium legislation.

Mr. SAUL. All right, sir.

Basically we are in accord with this legislation. We are very much in favor of it.

Our position would be very much like the position of the real estate board.

Since our two groups are so closely allied, we study a lot of these bills in conjunction with each other.

We think that this would facilitate, to a great extent, the bringing of private mortgage money into the ownership of apartment units. It is rather clumsy in the cooperative form; where mortgage money is available the downpayments are very high and the terms are very short and make it impractical for the average individual to buy or many individuals to buy into an apartment house under the cooperative plan.

The availability of FHA financing, with the lower downpayment, the easier terms, would open this up, no question, and would have a tremendous impact.

It would open up ownership to individuals who want to live in apartments in the District of Columbia and, as far as we are concerned, it would be good for the business community and for the city. Mr. HUDDLESTON. Unless there are some questions, we thank you, Mr. Saul.

Mr. SAUL. Yes, sir.

Mr. HUDDLESTON. Mr. Harold E. Dalness, the executive secretary of the Home Builders Association of Metropolitan Washington is our next witness.

Come around, Mr. Dalness, please.

STATEMENT OF HAROLD E. DALNESS, EXECUTIVE SECRETARY, HOME BUILDERS ASSOCIATION OF METROPOLITAN WASHINGΤΟΝ

Mr. HUDDLESTON. Do you have a prepared statement?

Mr. DALNESS. No, I do not, and I feel that most of the reasons for our recommendation of the adoption of this bill have already been stated by the previous speakers.

We feel that this would be helpful in stimulating the economy and providing for homeownership through just another means and method, all of which we feel would be beneficial to the industry and to the public, and the home-buying public.

Mr. HUDDLESTON. Well, unless there are some questions, thank you, Mr. Dalness.

Mr. SCHWENGEL. Just a minute, Mr. Chairman.

Would you have any objection if I would look in my dictionary and think about some names that we change that title from "condominium" to something else?

Mr. DALNESS. No, not personally. Of course, it is a commonly accepted term in those States that have

Mr. SCHWENGEL. Well, I know, but this is the heirarchy now. I am trying to find something that the people will understand.

The trouble with our Government is that people get up here and they get enamored with the glamor of the thing, so they have got to have something that has glamor.

Mr. DALNESS. No, I think we would be interested in a more acceptable, a more understandable term, if one could be devised.

Mr. SCHWENGEL. I am going to work on it.

Mr. HUDDLESTON. Well, I am sure the people who are involved in this kind of a business will come up with a more popular term to be applied to this kind of a transaction.

They will not stick to that "condominium" business, and I do not think it makes too much difference whether or not it is in the law. Mr. SCHWENGEL. Well, maybe not, but we ought not to be encouraging this thing here.

This is so complicated in the minds of people anyway, and we ought to start trying to simplify things so the people can understand them, and if the people understand they will get acquainted with some of the things that are happening or are not happening here in Washington. Mr. DALNESS. I feel confident that our board will come up with a better term.

Mr. SCHWENGEL. I applaud your interest, and I thank you.

Mr. HUDDLESTON. We will now have Mr. Geiser as our next witness, representing the Metropolitan Washington Board of Trade.

STATEMENT OF GEORGE A. GEISER, JR., CHAIRMAN, SUBCOMMITTEE ON CONDOMINIUM PROPERTY, METROPOLITAN WASHINGTON BOARD OF TRADE

Mr. SCHWENGEL. Mr. Chairman, I may want to question Mr. Press myself. I hope you will excuse me if I do.

Mr. HUDDLESTON. He did not indicate any desire to appear, but I am sure he will be very happy to answer whatever questions Mr. Schwengel will present to him.

Mr. Geiser, do you have a written statement to file for the record? Mr. GEISER. No, I do not.

Mr. HUDDLESTON. Well, if you will state very briefly the position of the Metropolitan Washington Board of Trade we will be glad to hear from you.

Mr. GEISER. My name is George Geiser. I am chairman of the subcommittee on condominium property.

The board of directors asked me to indicate their approval of this legislation.

The board felt that in this day of land scarcity and the concentration in movements of population to the suburbs that this legislation would create an additional vehicle for the financing of housing, so sorely needed in the District of Columbia.

Of course, it is also applicable to other kinds of units such as office space, and other provisions.

I might just give you a copy of a front page of apparently section F, of the Miami Herald, dated February 24, 1963, which indicates, to some extent, what can be done in this area.

This is the condominium. I know nothing about it other than what is in this article.

I do not know that it has actually started construction.

However, as you will see from the article, they do intend to commence construction on it immediately.

Judge MUNTER. Is that the same article that was in the Wall Street Journal?

Mr. GEISER. I am not familiar with that one.

Mr. SCHWENGEL. That is wonderful idea.

Mr. HUDDLESTON. Well, unless you have something further, Mr. Geiser, we appreciate your appearing before the subcommittee. Mr. GEISER. You are quite welcome, sir. It is a pleasure.

Mr. HUDDLESTON. Without objection, we will insert this in the record.

(The article follows:)

[From the Miami Herald, Feb. 24, 1963]

NEW SUBDIVISIONS IN THE SKY

CONDOMINIUM IS THE KEY

(By Frederic Sherman, Herald real estate editor)

The chief counsel for Lawyers Title Insurance Corp. came down from the home office in Richmond to talk to a small group in Miami about condomiunium apartment houses. When the word got around among builders, investors, and mortgage men, Lawyers Title had to rush over to the Robert Clay Hotel and rent the dining room. There was a real crowd on hand to hear Boyce C. Outen talk about a type of property ownership that is centuries old.

The term condominium can be found in early Roman law of the sixth century. In Europe and throughout Latin America, people find it no mystery.

What is it? Outen of Lawyers Title says property is held in condominium when title to the land and multiunit improvements on the land are acquired by any two or more persons in any manner whereby each person is vested of

1-Some form of undivided ownership in one or more of the general units, such as apartments, offices or suites and

2-An interest as tenant in common in the land and all the improvements except the units.

That's pretty legalistic. It boils down to a subdivision in the sky. Everybody in the building owns outright his own apartment and also owns a share in the common facilities such as the land, the parking space, the elevators, and the building itself.

NOT LIKE A CO-OP

It is said that in a condominium, each resident owns everything in his apartment from wallpaper to wallpaper. You really own a space in the air, enclosed by the walls of the apartment. That is what makes condominium different from cooperatives.

In a co-op, all you own are shares in a corporation or association that owns the entire building. That is what makes it impossible for the individual ever to pay off his share of the mortgage on a cooperative, or wise to do so if he could.

But in a condominium, each resident gets a recordable deed to his apartment and he can mortgage that living area for as much as the money market will allow. He can also pay off the mortgage on his apartment at any time, being responsible then only for his individual taxes, plus an amount necessary to carry his share of the maintenance of the building and the grounds.

If an individual doesn't keep up the payments on his own apartment or fails to pay his share of the building maintenance, foreclosure action can be started against him. The institution or individual holding the mortgage on the apartment would move in and take over the unit without affecting the other residents.

INTEREST INCREASING

The condominium_concept was first incorporated in our national housing legislation in 1961. The first FHA condominium project in the United States is Park Layne Towers, a 60-unit building now under construction in Hallandale's Golden Isles development. Dozens of conventionally financed condominium projects have started in Broward County. The interest in this new type of home ownership seems to double each month.

George DeFranceaux, a Washington mortgage banker, predicts, "Within 5 years the big majority of apartment units will be sold on a condominium basis in all price ranges.

The only hitch can come in the law. Some States have statutes that prohibit condominium ownership. Florida law doesn't say anything one way or the other and Attorney General Richard Ervin has ruled condominium agreements legal. Some municipal assessors, however, are uncertain about sending individual tax bills to apartment owners.

Ervin says condominium residents will not be entitled to homestead exemption; that the $5,000 exemption will have to be divided among owners of the building.

Bankers and the life insurance companies have been assured of the legality, but everybody involved would feel better about it if there were a condominium enabling act in the Florida statutes.

The Florida Home Builders Association has already drafted a law and it will be offered in Tallahassee in April when the current political rat race produces a legislature. Also up for consideration at the session will be proposals to extend homestead exemption to owners of co-op and condominium apartments.

On our cover this week is a rendering of the Shores, a 195-unit condominium to be built by the Janis Corp.

Miami Beach Federal Savings & Loan Association has issued a $1,300,000 construction loan for the five-story building, Miami Beach Federal has agreed to offer mortgages on apartments of 80 percent at 6 percent interest for 20 years. Closing costs would be 11⁄2 percent of the mortgage amount.

People buying apartments can pay all cash or go out and get a mortgage from any source they want.

Bernard Janis of the development company doesn't have his price schedule firmed up, but he estimates the one-bedroom apartments will start at $16,500. Top price would be $25,000 for a deluxe apartment with two bedrooms and two baths. There will be 10 such units. The other 48 two-bedroom apartments will be priced about $22,000.

Sam Elcook, Dade County assessor, says he will accept the deeds to individual apartments and bill the taxes according to a schedule showing how great an interest in the common facilities each resident holds. That percentage of ownership can never change over the life of the building.

IT'S A BIG ONE FOR GALT MILE

(By Larry DeVine, Broward Business Writer)

FORT LAUDERDALE.-Plans for a $6.5 million condominium apartment, a 16story addition to Coral Ridge Properties' high-rise lineup on the Galt Ocean Mile, were announced here this week.

The condominium, to be called the Ocean Summit, is scheduled to be under construction within 30 days, said James S. Hunt, Sr., president of the big Broward County development company.

Announced at the same time were plans for Coral Ridge's second new hotel within a year, also set for a beachfront lot on the northside Galt Mile. The new hotel, still unnamed, follows the building of CRP's 150-room Coral Ridge Hotel which opened here October 5.

The Ocean Summit, Coral Ridge's first condominum, will have 213 units. It was designed by Charles McKirahan & Associates, Fort Lauderdale architects. To be financed conventionally, the ap rtment is scheduled for completion in the spring of 1964.

Hunt also made public the planned sale of two of the expensive Galt lots, presumably for added high-rise construction. Together with the beachfront lots, Coral Ridge is also launching a mass sale next week of 500 residential lots in CRP subdivisions, with cuts as much as 50 percent of the original sale prices. Hunt said Coral Ridge was forced into the lot sale when the city of Fort Lauderdale notified the developers last week it would begin maintenance on the lots at an approximate $7,000 a month. Hunt also said the wholesale clearance was made in order to clear up the scattered, vacant homesites in the residential areas, lots now standing empty in areas not wholly sold out.

Mr. SCHWENGEL. I do not want to question Mr. Press, but I do want to say that I have known him for a long time, and I am aware of the interest and activity of the Metropolitan Washington Board of Trade, and it is a fine organization. And he has done so much for them and for the District.

I did want to ask this man a question to find out if he lived in the District.

Mr. GEISER. Yes, sir; in the District.

Mr. SCHWENGEL. Good.

Mr. HUDDLESTON. Now, that completes the list of witnesses that I have.

Unless there are other witnesses here who have not advised the committee of their desire to appear, that concludes the hearing, and the committee will now go into executive session.

(Whereupon, at 11:30 a.m., the committee proceeded into executive session.)