SECTION 3: PROGRAMS IN LIQUIDATION Chapter VIII HOUSING RESEARCH PROGRAM The program of housing research, begun in 1950 under authority contained in Title III of the Housing Act of 1948 (as amended), was, at the end of 1953, in process of liquidation, as provided by Public Law 176, 83d Congress (63 Stat. 439). The research program, through the close of fiscal year 1953, had cost approximately $4.3 million. No new costs were incurred after that date except those incidental to program liquidation. Of the $4.3 million, nearly 50 percent represented commitments for research performed under contract by educational institutions and nonprofit research laboratories or under agreements by other Federal agencies. A total of 89 such contracts or agreements was entered into, 34 of which were placed with agencies of the Federal Government. Immediately upon approval of the law requiring liquidation of the program by April 30, 1954, steps were taken to reduce the staff and terminate the activity. The overall plan for liquidation of the research program contemplated: 1. The termination of all active research contracts as speedily as was consistent with good management and in a manner to assure the greatest possible realization of value from data produced. 2. The evaluation of results of all incomplete projects which appeared to have immediate significance to the housing industry. 3. The analysis and summarization, for future use, of results of research investigations believed to be sound in providing means for reduced costs and improvement in building methods and techniques or in forming a base for usable economic data, but which appeared to offer limited opportunity for immediate application. 4. Making public as much as possible of significant data developed through research, based upon considerations of relative importance and applicability in solving industry problems and the time and funds available to accomplish this task. On June 30, 1953, there were 41 of the total 89 contracts and 2 staff research projects upon which further staff work was needed for completion. Upon review of all factors involved in their completion under the criteria stated above, it was decided that results of 24 contracts and one staff project could and should be published. The results of the remaining 17 projects were to be abstracted and made available for reference purposes. Of the 89 contract projects, publications had been released by the Agency on the results of 51 by December 31, 1953. Three had been released for publication by the contractor and 5 had been disseminated to trade and industry groups. It was anticipated that by April 30, 1954, all significant results of work undertaken in the research program would have been either disseminated for use by the industry and the public or adequately digested, catalogued, and safeguarded for future requirements. The projects of the Division of Housing Research had a variety of applications in different segments of the housing industry. In building technology, for example, the results of research were utilized by standard-setting bodies and code-writing authorities in the modernization and improvement of plumbing standards and codes. Other research provided a basis for recommended construction practices with regard to ventilation, insulation, and the use of vapor barriers as deterrents to damage from excessive condensation within dwelling structures. More precise data were provided and incorporated into standards on snow loads to which dwellings might be subjected in various regions of the country. A new formula was developed for the design of light gage steel columns. New data were developed on the draft action and range of temperatures in masonry chimneys. Data assembled on the development and enforcement of minimuni housing standards were significant to governments of local communities. Studies on the standardization of dimensions and assembly methods increased the understanding and acceptance of modular coordination as a basic method of cost reduction in construction. In the economic field, a major activity of the Division was the development and codification of procedures and techniques for local housing market studies. Through several research contracts, supplemented by staff work in the Division, a series of monographs was developed which are intended to facilitate the analysis of housing markets by local groups. Other undertakings involved exploration of the size and characteristics of builders' operations and of the distribution process in the building materials field. In the important area of accurate measurement of building costs, the Division sponsored the development and publication of a simplified record keeping system for small home builders. In the field of housing finance, the publication of results of mortgage market studies of three types of localities (metropolitan area, medium size city, small community) combined with other relevant material, pointed up the need for improved institutional channels to achieve a better distribution of mortgage capital in various regions of the Nation. The published data provided basic source material for governmental and trade discussions of this problem, and for the development of specific legislative proposals for achieving a better geographical distribution of mortgage capital. Publications of staff and contract research studies on methods of construction financing were recommended to the attention of builders by leading trade publications. Other staff publications analyzing the effects of housing credit regulations and the outstanding residential mortgage debt have provided an analysis of historical data which, to some extent, has served and should serve in the future as an aid in the development of mortgage finance policies by legislators, Government executive agencies, and lenders. Another contract study, providing the only published classification, definition and analysis of closing costs, is primarily of interest to consumers. One of the more important effects of the Government's housing research program was to stimulate greater interest in housing research on the part of industry. The past four years have seen numerous instances where industry groups have drawn on basic research data developed in this program for the purpose of improving the uses of their products and their marketing principles. Chapter IX OTHER PROGRAMS IN LIQUIDATION A. Alaska Housing Loans The Alaska Housing Act, enacted in 1949 and amended by the Housing Act of 1952, was designed to alleviate the acute shortage of moderate priced housing in Alaska by providing needed capital which was unavailable from private sources. The Act authorized a revolving fund of $20 million for loans by the Housing and Home Finance Administrator to the Alaska Housing Authority. Appropriations for this fund totaled $19 million, but this amount was reduced to $14 million on July 31, 1953, by Public Law 176, 83d Congress. From the proceeds of loans from the Administrator and other funds at its disposal, the Alaska Housing Authority may: 1. Make loans for housing projects to public agencies, private nonprofit or limited-dividend corporations, or private corporations which are regulated so as to provide both reasonable rents and a reasonable return on investment. Such loans may be made only if adequate financing on reasonable terms and conditions is not otherwise available. 2. Undertake the construction and sale or rental of dwellings when private sponsorship is not available, and 3. Use $1 million for character loans of not more than $500 each to Eskimos and other natives in remote areas for dwelling improvement or construction. Under this loan program, for which the Division of Community Facilities and Special Operations has the operating responsibility, the revolving fund was utilized through December 1953 to finance the construction of 1,297 units, and second mortgage financing was furnished to assure completion of 268 units. Approximately 700 loans of not more than $500 each were made to natives in remote areas for improvement or construction of dwelling units. During 1953, a review of the situation indicated that the program of direct loans had largely served its purpose of helping to overcome the acute housing shortage in Alaska. In view of the volume of housing construction which had been completed and the probability that adequate construction financing could be obtained from private sources since FHA builder commitments had been authorized on terms equal to those formerly applicable only to loans made by the Alaska Housing Authority, it appeared that the direct loan program was no longer needed. The Administrator, therefore, took steps to place the loan operations under the Alaska housing program in liquidation. By the end of the year no new loans were being made and the major activity consisted of the servicing and disposing of existing loans. Continuing aid to Alaska housing is provided by special FHA mortgage insurance and use of FNMA funds. The maximum FHAinsured mortgage amount in Alaska may be 50 percent larger than in the United States, the property or project needs only to be an "acceptable risk" rather than "economically sound" as in the continental United States, and the Alaska Government or its instrumentality may be the mortgagee or the mortgagor. A mortgage on a multifamily rental housing project may be in an amount equal to 90 percent of its replacement cost. Moreover, FNMA may make FHA-insured direct loans and construction advances on Alaskan properties and may make advance commitments and purchase FHA-insured and VA-guaranteed mortgages without regard to any other provisions of its charter. FHA has written insurance and issued insurance commitments on 7,313 dwelling units, of which 6,149 had been completed or put under construction by the end of December 1953. FNMA had purchased mortgages or held commitments undisbursed covering 4,863 dwelling units insured by FHA or guaranteed by VA by the end of the year. And, under the Prefabricated Housing Loan Program, the Office of the Administrator furnished the construction financing for 344 housing units at Kodiak. The following table summarizes activities under the Alaska housing program. The Alaska Housing Program April 1949 through December 1953 Sources: Federal Housing Administration and Office of the Administrator, HHFA. B. Prefabricated Housing Loans This program originally authorized direct Federal loans to business enterprises for production and distribution of prefabricated houses and housing components, and for large-scale modernized site construc |