Further, lending institutions have displayed little interest in tying up money in a charitable, nonprofit enterprise, even though its background may show it to be unquestionably stable. We believe that long-term loans, directly from the Federal Government, are absolutely necessary if the elderly housing program is to ever become truly effective. Earlier I suggested an amendment to the committee print bill before you. I urged extending the pay-back period to 50 years and reducing the interest rate to 312 percent for those nonprofit enterprises who agree to provide low-rent units for elderly people. Let me qualify that by saying that I would certainly not oppose extending these terms to cover all elderly housing built by nonprofit organizations. But the very real value of these more liberal terms are most needed in the low-rent field for the following reasons: The monthly rent charged to low-income elderly people must meet monthly obligations on the loan, as well as property upkeep, administrative personnel, and so on. A longer amortization period with smaller interest payments would naturally reduce the sponsor's monthly obligation and consequently make it possible to keep rents reasonable for that class of the aged who are most needy. As an illustration, let's assume a project consisting of 500 living units costing an average of $6,000 each at 42 percent interest with an amortization period of 40 years. Monthly mortgage payment per unit would be $27, plus hazard insurance premium, real-estate taxes and maintenance. At 32 percent interest with an amortization period of 50 years, the same units would have a monthly mortgage payment each of $21.24; the difference being $6.76 per unit per month. Now, while this may not sound like a great deal of money to people with livable incomes, the significance of $6.76 per month becomes greater and greater the lower down the income ladder one goes. And when you get to the bottom, where you will find nearly 10 million people over 65 living on incomes of less than $1,000 per year, pennies, nickles and dimes take on mammoth proportions and $6.76 per month less for rent can literally make the difference between an adequate diet and malnutrition. We have been severely handicapped in operating under the present elderly housing laws as contained in section 207, which requires that too much of our liquid assets be tied up in one project when many, many such low-rent developments are desperately needed. Being naturally interested in any other low-rent developments which may be completed or in the planning stage, we have done some inquiring and have yet to turn up anyone which would be within the financial reach of those 10 million oldsters who now live on an income of less than $1,000 per year. These are the people who depend on small social security checks, old-age assistance, World War I veterans pensions and similar small regular incomes. These are the people who need consideration by Congress in providing decent living quarters. The senior citizen wants to feel independent. He wants to feel that the amount of rent he is able to pay is all that is necessary for the continuity of his housing needs. Few want to feel that they are the recipients of a subsidy or charity in their housing requirements. Some organizations, it is true, have had better luck under the present law. But-and let me emphasize this-so far as I have been able to ascertain, they have been able to cater only to that small segment of the elderly population already financially able to pay the going rent for decent housing on the open market, with or without special elderly housing laws. Certainly I do not begrudge or in any way mean to criticize their efforts. I simply want to point out that no real problem is going to be solved by building elderly projects which require several thousand dollars entrance fee plus regular monthly payments far and away above the total income of the majority of elderly people. As an example, I have included excerpts from a recent publication of Aging, distributed by the United States Department of Health, Education, and Welfare, regarding the construction of a home called Royal Oaks Manor of Duarte, Calif. To quote just a few lines, the article reports: Two fees will cover the costs to the resident. The entrance fee, varying from $5,900 up, depending on the type and location of accommodations, covers lifetime residency and use of the facilities. The life-care fee of $165 per month or a single payment based on actuarial tables covers meals, room upkeep, medical care, and so on. The Federal Housing Administration and the Federal National Mortgage Association are participating in the financial arrangements. I will insert the whole article: [Excerpt from Aging] California Presbyterians plan new home: On July 23, 1956, the Southern California Presbyterian Homes, Inc., opened its first home for the aged, "The White Sands of La Jolla." The home not only has its full quota of 170 residents but a waiting list of 100 persons who have made advance payments for future openings. The Construction is about to begin on the second major home, "The Royal Oaks Manor of Duarte." Accommodations for some 200 residents are planned. Federal Housing Administration and the California Welfare Department have approved the unusual design-a single, integrated, large unit. It will be built on an 18-acre estate in Duarte, in the foothill area east of Monrovia, Calif., with a private lake, greenhouse, and facilities for many activities. Two fees will cover the costs to the resident. The entrance fee (varying from $5,900 up, depending on type and location of accommodations) covers lifetime residency and use of the facilities. The life-care fee ($165 per month for a single payment based on actuarial tables) covers meals from a menu selection, basic room upkeep, full medical care, including major surgery and hospitalization, and utilities. Residents withdrawing from the home will receive proportional refunds of single payments made. Payments made before the home opens will draw 3 percent interest until the home opens. After the home opens, a reservation on the waiting list requires a $1,000 deposit. Each room will have a private bath, with tub and shower combination, and closet and storage space. Drapes and wall-to-wall carpeting are provided by the home, but furniture and equipment must be supplied by the resident. * * * The Federal Housing Administration and the Federal National Mortgage Association are participating in the financial arrangements. INTEREST IN LOW-RENT HOUSING By the same token, we have had inquiries from many groups requesting information on the feasibility of constructing low-rent housing for the elderly. The most recent inquiry came from a group in Butte County, Calif., and for the committee's information, I have also included it in the record to demonstrate the real interest and concern among our citizenry for low-rent elderly housing. I will insert the Butte County Department of Social Welfare letter: BUTTE COUNTY DEPARTMENT OF SOCIAL WELFARE To: California Institute of Social Welfare, 1031 South Grand Avenue, Los Angeles 15, Calif. GENTLEMEN: I am writing to you as the acting secretary of a newly formed citizen committee in Chico, interested in the problems of the aging. Aware that your organization has pioneered in providing adequate and inexpensive housing for elderly citizens, I am requesting any information you can give the committee that would facilitate a housing project in this area for this age group. We have no definite ideas as to whether such a project would be publicly or privately financed at this point. Col. F. T. Robson, of our retired citizens, is acting as temporary chairman of the committee now working intensively on the problem. We would appreciate very much any information that you could give. Very sincerely yours, JANE JOYCE, Director. Social Worker 11. URBAN RENEWAL AND THE ELDERLY One very important point which must be considered in overall housing discussions is the adverse effect urban redevelopment is having on elderly people. While we are in complete sympathy and lend any strength at our command to urban redevelopment, its very worthy aim of ridding cities of slum areas is working great hardship on hundreds of thousands of elderly people, whose extremely low incomes now automatically sentence them to life in the slum areas. Where are they to go after urban redevelopment? I think you will find this a very real problem facing most of your urban-redevelopment agencies. We feel that nonprofit organizations, such as ours, can help to solve this problem. Urban redevelopment is a Government function designed to benefit communities as a whole. Direct Federal grants to communities for this purpose, with little prospect of any of the cash being returned, is accepted as desirable. But the job is only half done or perhaps not actually done at all-if the Government interest ceases once the now existing slums are torn down. The socioeconomic problem of relocation still remains. Where are these people to go and find accommodations within their income? On to create more slums? To illustrate the high percentage of low-income elderly people now being affected by urban redevelopment and the problem of relocation, I include at this point results of a survey on the large Bunker Hill redevelopment area in Los Angeles, Calif., and a letter from the redevelopment agency of the city of Sacramento. Now, the Bunker Hill development shows here how many of these people will be displaced and also the amount of rent that they have been paying. Where they are going to go-that is the question. I will insert the survey. FIGURES DEVELOPED IN THE SURVEY OF THE BUNKER HILL REDEVELOPMENT AREA, LOS ANGELES, CALIF. Total displaced persons.. Of this number families of two or more_. 7,310 1,342 Of the above total 33.6 percent are dependent upon social security, old-age assistance, and other retirement funds. 60 years and older, a total of- 2,398 Of this number there are 230 couples__ 460 In 1955, year survey was made, couples 60 years and older paid rent for a dwelling unit from a low of $29.84 to a high of $65. Single individuals paid from a low of $22 to a high of $60. Sleeping rooms only averaged $34.60 per month. All the above figures are monthly schedules. There has been better than a 10-percent increase in the above rent since 1955. I would like to direct your attention to the last paragraph in the letter of the city of Sacramento, which says: These people are now living in substandard hotels or apartments, and as you know, when the time comes_for_the_redevelopment of the section where they reside, they must be offered safe, decent, and sanitary housing within their ability to pay. It would appear that there would be interest in Sacramento for such a project as you have described in southern California. In other words, they have no answer for it. They hope someone will come along and take them off the hook. I will insert that whole letter. REDEVELOPMENT AGENCY OF THE CITY OF SACRAMENTO California Fruit Building 1006 Fourth Street, Sacramento, Calif. Mr. ROBERT A. BROWN, FEBRUARY 21, 1958. Director of Housing, California Institute of Social Welfare, 1031 South Grand Avenue, Los Angeles, Calif. DEAR MR. BROWN: We are in receipt of your letter of February 6, regarding housing in the Los Angeles area for senior citizens. The West Covina project sounds very interesting, as a means of providing housing for a group that is in need of low-cost, standard housing. In relation to the situation in Sacramento, land in our redevelopment area would, we believe, be too costly for the type of project in which you are interested. However, we believe that there are a large number of persons in Sacramento who are in need of such low-cost housing, and it might be possible that there would be other locations in the general neighborhood that would be worth considering. In our current project of 15 blocks, there are about 500 persons of 65 years or more, about 20 percent of the population in the area. In addition, there are aproximately 5,000 single persons in our total redevelopment area. A survey which was made of the labor market indicates that of approximately 500 single persons interviewed in hotels of the labor market area, 125 are over 65 years of age. In the 24 blocks of the labor market area, there are over 400 recipients of old-age security. Therefore, we have assumed that approximately 25 percent of the 5,000 population are 65 years of age or over. These people are now living in substandard hotels or apartments, and as you know, when the time comes for the redevelopment of the section where they reside, they must be offered safe, decent, and sanitary housing within their ability to pay. It would appear that there would be interest in Sacramento for such a project as you have described in southern California. Mr. Loughead of the Rancho Realty & Development Co. has written us, hope that he will stop in to see us when he is in Sacramento. Sincerely, (S) MARGARET S. WATKINS, and we (For Robert B. Bradford, Executive Director). And then the next letter here, on our National Institute stationery, is regarding our housing project for the elderly. We have received site approval from the FHA and the formal application has been made and the project number issued. This letter, I believe, will be of the greatest interest: Characteristics: Located on 44 acres. cost per living unit-just under $6,000. persons. Consists of 502 living units. Average We are greatly surprised to learn, here on Capitol Hill and over at FHA, that this amount of $6,000 average cost per living unit is a very, very low figure. We are very proud to point out that a nonprofit corporation can accomplish this. And that this one project will provide maximum housing for 940 persons. Proposed rental schedule: All units will be furnished and the rental schedule includes all utilities. Plan A, $35 per month; plan B, $54 per month for couples, $12 per month for single occupancy; and plan C, $37 per month for single occupancy. Applications: Already the California Institute of Social Welfare has received 1,683 bona fide applications from elderly residents in the Fresno area. More than 8,000 elderly people statewide have made application for similar living accommodations with many indicating readiness to move to any location where accommodations are made available. That is within the State. The complete letter follows: NATIONAL INSTITUTE OF SOCIAL WELFARE Following is a brief rundown on our low-rent elderly housing development in Fresno, Calif., which has received FHA site approval. Formal application (FHA project No. 121-00055-A) has been made. SPONSOR California Institute of Social Welfare, Inc. MORTGAGOR Senior Citizens Housing (a nonprofit corporation). Located on 44 acres. unit, just under $6,000. CHARACTERISTICS Consists of 502 living units. Average cost per living PLANNED UNITS Plan A-222 units with living, bedroom, kitchen, and bath. (For couples.) Plan B-216 units with combination living-bedroom, kitchen and bath. single occupancy or couples.) (For Plan C-64 units with combination living-bedroom and bath. (For single occupancy. These are in close proximity to the community center with cafeteria.) PROPOSED RENTAL SCHEDULE (All units will be furnished and the rental schedule includes all utilities.) Plan A-$65 per month. Plan B-$54 per month for couples. $42 per month for single occupancy. Plan C-$37 per month for single occupancy. APPLICATIONS Already, the California Institute of Social Welfare has received 1,683 bona fide applications from elderly residents in the Fresno area. More than 8,000 elderly people statewide have made application for similar living accommodations with many indicating readiness to move to any location where accommodations are made available. And then here, Senator, is our plot plan, with the community center. Then the next is the floor plan of the community center. Senator SPARKMAN. You state you have received FHA site approval. Mr. MCLAIN. Yes, sir. Senator SPARKMAN. Have you started construction yet? Senator SPARKMAN. Just ready to go? |