Mr. PHILLIPS. What is the answer to the chairman's question about the relationship of the appraisal to the sale value? In California we try to appraise at 50 percent of the value of the property.

Mr. REYNOLDS. Appraisals in Washington are generally assumed to be on the basis of a 100-percent valuation but, like all cities having similar laws, that relationship does not hold. We find that, in past condemnation proceedings in the District of Columbia, we have usually had to pay as much as 20 percent more than the assessed valuation of the land.

Mr. PHILLIPS. Twenty percent?

Mr. REYNOLDS. Yes.

Mr. THOMAS. Did I understand Mr. Reynolds to answer the question that the normal procedure in the District is to pay 20 or 25 percent more than the assessed value? Mr. REYNOLDS. No; what I said was this. Over the years we have purchased quite a lot of property in the District of Columbia and where we have been forced to condemn we have frequently paid in the courts at least 20 percent more than the value for tax purposes. Mr. THOMAS. If you were to do that in this case, you would save $100,000, would you not?

Mr. REYNOLDS. No. You have $370,000 and 20 percent of that would be $74,000, which would be $444,000.

Mr. THOMAS. This assessed valuation adds up to $276,000 here. How do you arrive at $375,000?

Mr. LARSON. Those figures given in the Senate report take into consideration exemptions for nontaxable purposes. The Carnegie Foundation is entitled to certain exemptions.

Mr. REYNOLDS. There are three lots and I can give you the details on those. No. 814 for tax purposes is assessed at $70,320 and has a tax exemption of $23,426.

Lot 815, $72,360 for tax assessments and $24,120 tax exemption. Lot 48, tax assessment, $134,820 and tax exemption, $44,940. I add those up to $369,986, if my calculations are correct.

PLAN FOR GOVERNMENT PROPERTIES IN VICINITY

Mr. PHILLIPS. What sort of plan do you have in mind for the preservation or the protection of Jackson Place? You have bought the Madison house over on the opposite corner of this one and the rumor at that time was that you were going to tear it down and build another office building. I think that would be very unfortunate.

Mr. REYNOLDS. The plan at the time of the purchase of the Dolly Madison home, which is the Cosmos Club, and including the Belasco Theater and other properties was to extend the Treasury Annex which occupies a portion of the block clear through that block including the properties purchased. The north side of Lafayette Square is pretty well built up with private buildings, including the Chamber of Commerce of the United States. On the west side of Lafayette Square which we are discussing here, the plan has always been to preserve the particular piece of property under discussion, the Decatur and the Blair and Blair-Lee Houses.

Mr. PHILLIPS. It seemed to me that the park would be better preserved without large buildings adjacent. There are no big buildings except the Chamber of Commerce Building or the VA Building right

on the park. That is broken by the little church and the hotel and the Cosmos Club. The Cosmos Club is a very historic building and I am very sorry, indeed, that it must move out of there. Do you contemplate putting up buildings around LaFayette Square?

Mr. REYNOLDS. That was the plan at the time the purchase was made some years ago.

Mr. LARSON. Those would be Government buildings, not business buildings.

Mr. PHILLIPS. Yes; but they would be large buildings, corresponding to the RFC Building or the VA Building?

Mr. REYNOLDS. They would not be that high. They would be lower buildings, similar to the Treasury Annex which is about the same height as the State Department.

Mr. LARSON. The Treasury Annex is on the other corner. It would be a continuation of that.

Mr. REYNOLDS. It would be similar in architecture to what you have there and the Chamber of Commerce Building. I think that construction is probably some time off, but that is due to greater priority for other construction in or near the District of Columbia.

Mr. PHILLIPS. Of course, the alternative, if we do not buy them, is that somebody else will buy them, a private purchaser and they could put up a high building, as high as the limits permit.

Mr. REYNOLDS. That is right.

Mr. LARSON. The plan under discussion is for it to remain as it is, to preserve LaFayette Square, the corner, the Blair and Lee houses, and to match the Decatur house on the other corner. Originally this legislation, the Senate report indicates, was drawn to give authority to the Government to acquire all of the rest of the property in that block that it does not now own. The committee felt there would be a hardship on the present owners in the block, if we decided to go ahead with it and we testified we had no intention of presently going ahead with any other property except this under discussion. So they did not include, in the bill that was passed, any property other than this property that we are now asking funds to continue negotiations and acquire, and the Mellon property, the two lots immediately adjacent north.

Mr. THOMAS. Let me point out to you, under the normal procedure of condemnation of properties in the District of Columbia, you would still save $75,000.

Who owns this land?

Mr. LARSON. The Carnegie Foundation.

Mr. THOMAS. That is a charitable organization which has been enjoying tax exemption for a long time. Why do they not sell you that land for about $450,000?

Mr. LARSON. We will continue negotiations, Mr. Chairman.

Mr. THOMAS. If there are no further questions, thank you, gentle

men.

Mr. LARSON. Thank you, gentlemen.

OFFICE OF THE HOUSING EXPEDITER

WITNESSES

TIGHE E. WOODS, HOUSING EXPEDITER

WILLIAM G. BARR, GENERAL MANAGER

ED DUPREE, GENERAL COUNSEL

JOHN J. MADIGAN, DEPUTY HOUSING EXPEDITER (ADMINISTRATION)

G. WILLIAM COMFORT, DIRECTOR, BUDGET AND FINANCE BRANCH MILTON B. DAVIS, STATISTICS AND ANALYSIS OFFICER

SALARIES AND EXPENSES

Mr. THOMAS. Mr. Woods, it is nice to see you and your associates. You are appearing in connection with your estimate of $14,000,000 for 1951 as contained in House Document No. 640.

JUSTIFICATION OF THE ESTIMATES

At this point in the record we will insert pages 1, 2, 14, 16, 17, 18, and 22.

(The pages referred to are as follows:)

SUMMARY AND HIGH LIGHT MEMORANDUM

On July 1, 1950, Federal rent control is still in effect on approximately 8,000,000 dwelling units occupied by approximately 28,000,000 people. There are still about 3,400 incorporated cities, towns, and villages under Federal rent control in 40 States. There are still 62 cities with a 1940 population of more than 100,000 under Federal rent control.

The program is being administered through 138 area and 68 branch rent offices with a permanent staff of employees, supplemented by numerous rent stations serviced on a circuit rider basis with the office open to the public on certain established days in each week.

The program for the fiscal year 1951 contemplates a continuation of the Housing Expediter's policy in carrying out the intent of the Congress to terminate at the earliest practicable date all Federal restrictions on rents on housing accommodations. More than 500 decontrol actions were taken during the fiscal year 1950 on his own initiative. However, when translated into terms of primary budgetary factors-savings in money-resulting from decontrol actions, it is pertinent to point out that of the 206 rent offices staffed with personnel, approximately 150 of them have 6 or less employees, many of them only 1 or 2, and that there are many localities serviced by offices open only a day or two each week with no permanent employees, and except where the larger cities are involved the savings are small. There is no basis at this time for anticipating that the need for rent control will cease to exist in the larger cities, highly industrialized areas, or localities in the vicinity of large military installations.

All of the incorporated cities, towns, and villages remaining under Federal rent control have had the right to decontrol since April 1, 1949, and have declined to take the necessary action notwithstanding pressure of interested parties. For budgetary purposes it must be assumed that the majority of these same places will take action to continue controls, and where such action is taken it is almost certain that controls will continue through the remainder of the fiscal year.

Drastic cuts in budget estimates for the fiscal year 1950 brought about a situation where we are beginning the budget year at a low ebb both as to personnel, supplies, forms, and other essential operating tools. Undesirable short cuts have been taken in procedures, desirable activities eliminated, and stocks exhausted. Backlogs have accumulated in many phases of our operations and the public has not been rendered the type of service to which it is entitled.

In addition to an accumulation of approximately 3,000 litigation cases pending in the courts, there are about 5,000 unpaid judgments involving over $2,000,000

69887-50-pt. 1--20

of which about $750,000 is due the United States and $1,250,000 is due tenants in the form of restitution of overcharges.

We have handled a monthly average of approximately 10,000 compliance cases and we are collecting approximately $400,000 per month for the benefit of tenants issuing an average of 5,000 refund checks through Treasury channels, but compliance surveys indicate an over-all violation of 37 percent and many of these cases have not been touched.

No request for additional employees is included in the estimates; but, on the contrary, provision is made for a gradual reduction in the staff during the first 9 months, with drastic cuts in personnel during the latter 3 months. The reduction is from 2,778 in July 1950 to 950 in June of 1951.

The estimate of $14,000,000 is considered the minimum amount necessary to completely wind up the affairs of the Office of the Housing Expediter and may be considered in two parts, namely, $13,395,000 for the fiscal year 1951, and $605,000 for the expenses of liquidation in the fiscal year 1952.

OFFICE OF THE HOUSING EXPEDITER

Salaries and expenses, Office of the Housing Expediter: For expenses necessary, fiscal year 1951, to carry out the functions of the Office of the Housing Expediter, including personal services in the District of Columbia; attendance at meetings of organizations concerned with rent control; hire of passenger motor vehicles; printing and binding; purchase of newspapers (not to exceed [$10,000] $1,500) services as authorized by section 15 of the Act of August 2, 1946 (5 U. S. C. 55a); not to exceed $5,000 for payment of claims pursuant to section 403 of the Federal Tort Claims Act (28 U. S. C. 2672); and health service program as authorized by law (5 U. S. C. 150); [$17,500,000: Provided, That the appropriation and authority with respect to the appropriation in this paragraph shall be available from and including July 1, 1949, for the purposes provided in such appropriation and authority. All obligations incurred during the period between August 15, 1949, and the date of enactment of this Act in anticipation of such appropriation and authority are hereby ratified and confirmed if in accordance with the terms thereof] $14,000,000 of which not less than $2,000,000 shall be available only for payment of terminal leave: Provided further, That as to cases involving the functions transferred to the Office of the Housing Expediter by Executive Order 9841, section 204 (e) of the Emergency Price Control Act of 1942, as amended, shall be considered as remaining in full force and effect during the fiscal year [1950. For an additional amount for "Salaries and expenses, Office of the Housing Expediter", $4,000,000, of which $2,600,000 shall be available for the payment of terminal leave only.] 1951: Provided further, That this appropriation shall remain available until June 30, 1952, for the purpose of liquidating the functions of the Office of the Housing Expediter. Public Law 574, Eighty-first Congress. Independent Offices Appropriation Act, 1950; Urgent Deficiency Appropriation Act, 1950; Deficiency Appropriation Act, 1950.

Appropriated 1950, $22,100,000

GENERAL JUSTIFICATION

Estimate 1951, $14,000,000

There are attached statements indicative of the workload in the area and branch rent offices and in the litigation sections. Attention is invited to the fact that the workload increased during the fiscal year 1950 over that of the preceding period, and to the 3,257 litigation cases pending in the courts, and 5,256 unpaid rent judgments remaining to be collected.

On July 1, 1950 Federal rent control is still in effect on approximately 8,000,000 dwelling units occupied by approximately 28,000,000 people. There are still about 3,400 incorporated cities, towns and villages under Federal rent control in 40 States. There are still 62 cities with a 1940 population of more than 100,000 under Federal rent control.

No additional employees have been requested although the staffs of the 138 area and 68 branch rent offices have been reduced during the fiscal year 1950 because of budgetary restrictions to an absolute minimum, in some cases to less employees than is consistent with effective administration of the program. There are about 150 offices staffed with less than 6 employees, many of them with only. 1 or 2, and these offices are servicing in excess of 200 rent stations on a circuit rider basis with the office open on only 1 or 2 days in the week.

It is essential that we maintain our staff if we are to conduct an effective compliance program—the heart of rent control. Compliance surveys made in 24

cities during March 1950, show that violations of the rent-control legislation are increasing by leaps and bounds. This increase can undoubtedly be attributed to lack of adequate enforcement personnel. The recent surveys indicate an over-all violation of 37.29 percent, compared with an approximate 20 percent violation figure during the preceding year.

There is an ever-increasing demand upon the compliance staff from many cities still under rent control. Denver, Colo. is an example of this demand. When it developed that the city was paying over-ceiling rents for many of its welfare cases, we were asked to check all such cases. This project has been in progress for several months and as a result of our survey the city has secured rental refunds in excess of $10,000. We are now receiving requests for similar compliance action in other municipalities. On March 25, 1950 the area rent Director in Detroit reported that in 435 of the 2,060 registered cases, the Welfare Department found when checking that they were allowing rents in excess of the ceiling in the amount of $42,294 and refunds have been demanded from the landlords.

During the fiscal year 1951 it is proposed to attempt to obtain more active participation in the rent control program on the part of the local advisory boards. At the present time there are about 530 of such boards with a membership of 3,665, and they request and expect the Housing Expediter to furnish factual information as to the housing situation which can be obtained only by the use of our employees in making surveys. This information is, of course, also necessary for the Housing Expediter to carry out his responsibility in taking decontrol actions on his own initiative.

Although it is impossible to foretell to what extent actions may be taken to terminate Federal rent control prior to December 31, or to what extent failure to take action will terminate controls on that date, the estimates provide for monthly reductions in personnel with drastic cuts during the last 3 months leaving only the liquidating staff on June 30, 1951. The details with reference to personnel reductions are included in the explanation on personal service computations.

Travel expense

The Office of the Housing Expediter does not have any Government-owned vehicles in the field services, and there are many employees such as the inspectors whose duties require them to travel continuously who must be authorized to use their privately owned cars on a mileage basis. Approximately 225 rent stations must be visited on regular schedules. These items constitute the major portion of the amount requested for travel expenses.

Transportation of things

This expense varies to a considerable extent depending upon the number of offices closed by decontrol actions necessitating the shipment of records, property, The amount requested is based on actual experience during prior years. Communication services

etc.

The amount requested was computed on an average per employee based on actual experience in prior years.

Rents and utilities

The amount requested represents actual rentals as shown by existing leases or agreements with the public buildings services, with an appropriate deduction consistent with a decrease in activities as anticipated by indicated personnel reductions.

Printing and reproduction

The principal item in this estimate is the cost of printed forms of which millions are required for the use of tenants and landlords. The program could not function without these forms. The stocks in the offices have been exhausted, and the amount requested is the minimum necessary in order to replenish the stocks to service the public.

Other contractual services

This item includes our proportionate share of the cost of the maintenance of certain field office space as billed by the General Services Administration and over which we have no control. It also includes expenses in connection with the holding of hearings by local rent advisory boards; the repair of equipment; witness fees of private parties summoned in litigation cases, etc.