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Housing Act of 1959 demonstrates that such housing would cost $30 per room per month, which is far beyond the income capacity of the Navy personnel presently occupying Passyunk Homes.

Other alternatives investigated but found to be unfeasible were the extension of the present authority to inlease housing for military personnel assigned to tactical installations, to nontactical installations, and the modification of existing authorities to permit institution of special station allowances in high-rent areas.

Surveys completed by the Fourth Naval District, the Philadelphia Housing Authority, and the office of the development coordinator of the city of Philadelphia, and later verified by special study teams of the Navy and Defense Departments, demonstrate that there is no rental housing in Philadelphia to meet Navy requirements.

At the present time the city of Philadelphia has a shortage of 5,000 public housing units for low-income families. The stepped-up pace of Federal highway construction and urban renewal will increase this gap considerably by 1962. The city of Philadelphia, therefore, cannot agree to any extension of the deadline for Passyunk Homes beyond the present date.

Because of the income limitation for public housing, 625 of the 663 Navy families occupying Passyunk Homes will be required to vacate on February 1, 1962.

Unless the additional units of Capehart housing are authorized now these 625 Navy families face sure eviction by February 1, 1962, with no other form of housing within their income limits open to them.

During the fiscal year 1959 the Navy recruiting station in Philadelphia enlisted a total of 4,390 individuals for naval service. The effect on recruitment in Philadelpha and the serious damage to efficiency and morale to Navy personnel stationed in Philadelphia if adequate housing within their means is not provided is self-evident.

There is presently a site available within easy commuting distance of the Philadelphia Navy Yard in the development of which the city of Philadelphia is willing to cooperate by bringing it under its redevelopment program, thus pro viding it with adequate community services and sound city planning. This site cannot be withheld from subdivision for very much longer, however.


Senator STENNIS. I really have not gone over these general provisions. We said we wanted to go through them.

Mr. NEASE. They have been, in part, covered by Mr. Bryant, and I thought we would run through them today.

Senator STENNIS. All right. Let us proceed, Mr. Sheridan.

We are glad to have you here, and your associates, and you want to proceed on any particular one first, Gordon? You have looked into these.

Mr. SHERIDAN. Mr. Chairman, sections 501 through 506 follow the pattern established in all the prior military construction acts. They are standard general provisions.

Section 507 will provide for necessary increase in the limitation on the number of Capehart housing units which can be contracted for after June 30, 1959; and in last year's act, Public Law 86-149, there was a proviso that no mortgages could be insured after September 30, 1960, and that not more than 20,000 units could be contracted for after June 30, 1959.

Subsequently, section 701 (a) of the Housing Act of 1959 further amended the Housing Act by changing the expiration date for insuring 803 mortgages from September 30, 1960, to October 1, 1961.

The execution program for fiscal year 1960 has been restricted to 20,000 units, but since some fiscal year 1959 projects had to be carried over, and we are now requesting in this bill that you are considering, Mr. Chairman, 6,718 units for 1961, the limitation of 20,000 units must be increased to 30,000. That is section 507.

Section 508 would extend from July 1, 1961, to January 1, 1962, the terminal date for the disposition of all inadequate public quarters under the jurisdiction of the Army, Navy, Air Force, and Health, Education, and Welfare.

This is requested in order to allow additional time for the orderly disposition of about 10,000 inadequate sets of quarters which cannot be made adequate with a reasonable expenditure of funds.

In some instances, replacement projects have been programed, but will not be available for beneficial occupancy by the present terminal date.

Section 509-
Senator STENNIS. Pardon me just a minute.
Mr. SHERIDAN. Yes, sir.

Senator STENNIS. We had fairly well discussed that, I believe, Senator Cannon, the new terminal dates when other witnesses were here.

Mr. NEASE. 508. There is one difference that has come up here that I would like to get the reaction to on this; 508 does not, in your estimation, cover Lanham Act housing and, I believe, you are in dispute—not a dispute, but the GAO has a different opinion.

Mr. ALENIER. That is right.
Mr. NEASE. That question shows a difference here.
Senator STENNIS. Let us get it in the record as Mr. Nease has it done.

The House-passed bill will extend by 6 months the time limit on the disposition of any inadequate public quarters. You have previously furnished substantial reason why this date should be extended for a year to July 1, 1962. There is now a difference of opinion between Defense and the GAO as to whether this provision covers so-called Lanham Act housing, some of which is still usable.

Now, specifically should the Lanham Act housing be expressly precluded from this provision, precluded or included ?

Mr. MAYER. I will answer that, if I may. I am Assistant General Counsel of Defense.

Senator STENNIS. All right, Mr. Mayer.

Mr. MAYER. Mr. Chairman, the Department of Defense does believe that Lanham Act housing should not be subject to the demolition provisions contained in the law at the present time.

I believe the General Accounting Office has also supported this view. Since we feel that we must obtain the General Accounting Office's concurrence in any continued leasing of this housing, we think it would be desirable to have it made clear, either through the act or in the report, that Lanham Act housing is not subject to demolition.

Senator STENNIS. Put it on a par with the other?
Mr. MAYER. That is right; other rental housing.
Senator STENNIS. All right.

Now, on the question of retaining the rental proceeds for maintenance and repair in the Lanham Act housing units, do you think an amendment here would be proper for that? In other words, that you could retain, set up a revolving fund, for the repair and maintenance of the Lanham Act housing?

Mr. ALENIER. May I answer that, sir?
Senator STENNIS. Yes.

Mr. ALENIER. As Secretary Bryant has indicated, if legislation were enacted which would permit the military departments to use the rental revenue for the purpose of maintaining Lanham Act units, some of the better units would probably be retained. However, such units would be kept only when a requirement exists for their use.

A revolving fund arrangement, whereby the income could be used to at least help defray the costs of maintenance and operation would be of assistance to military comamnders in programing repairs to these units, it would relieve the competition for maintenance and operation dollars which every base commander faces.

Basically, a determination of economic feasibility, together with requirement, would be paramount in deciding what Lanham Act units would be retained.

In general, the rentals received from these units are inadequate to maintain them.

Senator STENNIS. Well, there you are.

All right. Thank you very much for your observation and testimony. Proceed.

Mr. SHERIDAN. Section 509 prescribes the customary cost limitations on certain common and repetitive types of construction. That has appeared in the bill each year.

Section 510 would repeal section 2662, title 10, United States Code, and section 43 of the act of August 10, 1956.

These are the provisions formerly contained in title 6 of Public Law 155, 82d Congress.

That provided the Secretaries of the military departments and the Administrator of Federal Civil Defense Administration shall come into agreement with the Armed Services Committees with respect to certain real estate actions involving $25,000 or more.

Early in the hearings on this bill, Mr. Chairman, you will undoubtedly recall that Secretary Bryant referred to the President's transmittal of the message to Congress that the Attorney General had advised him that these sections violated fundamental constitutional principles.

We would prefer in lieu of the House passed amendment, we would prefer the original so-called Vinson amendment which Chairman Vinson introduced in the committee, as a substitute for section 510, but which was not passed by the House.

They passed a much more restrictive and repugnant provision as far as the Attorney General is concerned.

Senator STENNIS. You mean in this bill?
Mr. SHERIDAN. Yes, sir; in the House bill.

We proposed that the title 6, former title 6, be repealed, and the House made the provision even tougher..

I do not know if you wish to go into that further or not. I think there has been quite a bit of testimony on that. · Senator STENNIS. Yes. I think that is pretty much before us here, what we already have, our previous knowledge of it. I think that is fairly well presented.

Mr. SHERIDAN. I think you have enough information there to make your decision.

Senator STENNIS. All right. Next item.

Mr. SIIERIDAN. Section 511 is a requirement that we have to include in the bill each year to differentiate between the Military Construction Act and the Reserve Forces Facilities Act which is included in title 6.

Senator STENNIS. Yes.

Mr. SHERIDAN. That concludes the general provisions as originally introduced in the proposals submitted by the Secretary of Defense, Mr. Chairman.

Senator STENNIS. All right.
Mr. Nease has a couple of questions here for the committee.

Under the new budget procedures, you are required to get dollar appropriations with which to purchase foreign currencies to construct projects under the Commodity Credit program.

What is there to prevent the military departments from using such funds to build military construction authorization projects if Commodity Credit funds are not available or from reprograming these funds for other purposes?

In other words, you could proceed thereon so far as the legislation is concerned, whether there is—where these funds are appropriated or not, could you not?

Mr. MAYER. Mr. Chairman, under the new Budget Bureau policy, the Department of Defense will obtain so-called currency restricted appropriations for the purchase of these foreign currencies which will be utilized for the construction of housing.

If there are no foreign currencies available we will not be able merely to construct the housing automatically with use of dollar appropriations.

I do not know whether that is a sufficient answer to your question, but the distinction will be made between appropriated dollars in the past, and funds which are specifically appropriated for the purchase of these foreign currencies.

Senator STENNIS. Well, we have not had any discussion of this around the tablet yet, about your new policy here, about your appropriated funds, but I do not know, it seems to me, gentlemen, it is better to go on and authorize these projects where you are going to use these foreign funds, and after you have done it then we will reimburse the Commodity Credit Corporation.

Mr. MAYER. We will continue to reimburse the Commodity Credit Corporation, Mr. Chairman, but instead of reimbursing CCC on a long-term basis, we will reimburse immediately with the funds appropriated for that purpose.

Senator STENNIS. The committee may wish to consider a general provision to the bill specifying that projects authorized under the Commodity Credit program cannot be built unless the required foreign currencies are available. Would you comment on the feasibility of this proposal ?

Mr. MAYER. Mr. Chairman, I have been furnished a draft proposal which I believe was intended to accomplish that effect, and the only comment that we would like to make is that we would like to add at

the end the words “where such currencies are available for this purpose.”

In other words, Mr. Chairman, we believe that this proposal is intended to relate only to projects which were specifically authorized for construction with foreign currencies.

There are some countries where foreign currencies are not available or where it is impossible to obtain construction materials with them and, of course, in such cases we would seek to get authorization and appropriations of used dollars, and we do not believe it was intended to have this provision apply to that kind of project.

Senator STENNIS. Well, you could not do that unless you had the authority to use the dollars though, could you?

Mr. MAYER. No; that is true, sir. This would apply, therefore, only to projects which were authorized for construction with foreign currencies.

Senator STENNIS. Well, I had always thought you did not undertake to use foreign currencies unless you had them on hand in that country.

Mr. MAYER. Well, of course, we have had authorization in some cases for a number of years prior to the actual consummation of the international agreement.

Senator STENNIS. It takes quite a bit of time to iron those difficulties out? Mr. MAYER. Yes, it does, Senator STENNIS. Does that cover the matter now? Mr. NEASE. Yes. Senator STENNIS. All right. Take this general statement :

You are familiar with the General Accounting Office report on what would appear to be excessive costs of certain Capehart housing units for senior officers, and in reply to certain questions given Mr. Bryant earlier, you have indicated you do not recommend imposition of cost limitations to Capehart units by officer grades?

I have before me an amendment the subcommittee might wish to consider that would place a ceiling on the cost of a Capehart unit, comparable to the limitation now in effect for appropriated fund housing, namely $22,000.

I would like your comments on why you feel a satisfactory house could not be obtained, suitable for general officers, under this limitation.

In other words, we would adopt a pattern here of appropriated funds housing. What do you say to that, gentlemen ?

Mr. HARVEY. Mr. Chairman, the $22,000 is essentially the limit that is placed on a general officer's house under the appropriated fund program.

Senator STENNIS. Yes. Mr. HARVEY. This is the house to the 5-foot line, and does not take into consideration at all any of the landscaping, the utilities coming up to the house, sidewalks, streets, roads, gutters, and so forth.

We feel that under the Capehart program where all of these items are paid for in the cost of the house, that the figure should actually be considerably higher, so that we could, in fact, then build a Capehart house which would be comparable to the appropriated fund house. In

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