from the outset, and disappeared entirely as soon as other hosptials in that State had applied. Some hospitals have reported that a simple comparison between the $22.9 million available nationally and the known needs was sufficient to discourage them from the considerable expense of making an application. To a substantial extent, as I have pointed out, this program seems to have been converted by administrative action into a matching program, with hospitals required to meet independently a part of the cost of each project. With the very limited funds available, one can understand the reasons behind the administrative efforts to spread them as far as possible, but it is questionable whether this policy has in fact led to their most efficient use or has been in accord with the intent of Congress. Because the Community Facilities Administration commonly requires a first mortgage, hospitals are usually unable to combine a loan from government with borrowing from private sources. Hospitals have been unwilling, as an alternative to such dual financing, to scale down their projects to bring them within the small amounts which the CFA has been in a position to loan, because the smaller projects would not meet their needs and they have preferred to postpone construction until they can build the kind and size of building required for efficient operation. When we saw the direction the program was taking, and the emphasis it seemed to be placing on loans which we think too small to accomplish the purpose of the program, we urged the Administrator of the Housing and Home Finance Agency to appoint an advisory committee of persons familiar with hospital financing and operation in the belief that such a committee could help to make the program more effective. We still believe that such action would be desirable, and that your subcommittee might well consider a statutory provision to that effect. Despite the difficulties which the administrative limitations have imposed upon the program, 66 applications have been received for a total of $33.8 million for the construction of housing for student nurses and interns. This $33.8 million, as we understand, represents what the applicants asked, and has been reduced to $28 million by action of the CFA in reducing all applications (with 1 or 2 exceptions) to an administratively established maximum of $500,000 apiece. Of these 66 applications, as I have already said, 2 have been approved, and for 34 others funds have been reserved. Twelve applications are pending, while 18 have been deferred or withdrawn. It should be noted that the applications approved, those for which funds have been reserved, and those now pending would, even as reduced by the CFA, absorb about $21.8 million of the total $22.9 million available, and that certainly in most States, if not in all, any further application at this time would be an act of sheer futility. Early this year we made a spot check from among those hospitals that had stated a year earlier that they could expand their nursing school enrollments if financial assistance were available for housing. We find that the need for facilities continues to be unmet, and that a substantial number of hospitals would apply in 1958 and 1959 and others would expect to do so at a later date, if funds were available in amounts and on terms that would enable them to build facilities of a size to meet their needs. We believe that the student nurse and medical intern housing amendment passed in 1957 has recognized a serious problem with respect to providing adequate housing facilities needed in the education of essential health personnel. We believe the amendment established a sound framework for an attack on the problem, and the experience, even with limited funds, has demonstrated the need and desirability of providing adequate funds at this time. We therefore urge that this subcommitte increase the loan authorization from $25 million to $150 million. We wish to express our appreciation for the opportunity of coming before this subcommittee and discussing this vital program with you. Thank you very much. Senator SPARKMAN. Thank you, sir. That figure of $150 million would be the cumulative total? Mr. WILSON. That is right. Senator SPARKMAN. In other words, not $150 million additional but it would simply raise the $25-million figure as presently stated in the law to $150 million? Mr. WILSON. Yes, sir. Senator SPARKMAN. I think it is a very fine statement and I am glad you gave the analysis that you did as to what has been done on the program so far. You will recall that we initiated this program in this committee last year. Mr. WILSON. That is right. Senator SPARKMAN. And we were able to get through Congress the $25 million. I was eager to find out how the $25 million has been used. Even though the program has been rather slow getting started, practically all of it has been committed. Mr. WILSON. Yes, and I think there is evidence, certainly, that there is a very great future in potential demands. Senator SPARKMAN. Thank you very much. Mr. Williamson, do you have anything to add? Senator SPARKMAN. Thank you both very much. We appreciate your statement. I am sure it will be helpful. Mr. Stanley H. Lowell. Will you come around, Mr. Lowell? Mr. Lowell, we are glad to have you with us. Mr. LOWELL. Thank you, sir. Senator SPARKMAN. We have your prepared statement and the entire statement will be placed in the record. You proceed, though, as you see fit. Mr. LOWELL. Thank you, sir. STATEMENT OF STANLEY H. LOWELL; ACCOMPANIED BY EDWARD D. HOLLANDER, NATIONAL DIRECTOR, AMERICANS FOR DEMOCRATIC ACTION Mr. LOWELL. Mr. Chairman and members of the committee, I am Stanley H. Lowell, assistant to the mayor of New York City and member of the National Board of Americans for Democratic Action. I am testifying here this morning on behalf of the Americans for democratic action, and not in my official position as assistant to the mayor, although I feel free to draw on my experience there in what I will present this morning. We appreciate this opportunity to present our views on housing and urban renewal. Before I get into my prepared statement, I just left Senator Javits and he advised me yesterday he testified and only had the opportunity informally to give the figures for New York City, which might be helpful to this committee. He therefore turned over to me--and I am going to bring it right back to him after I leave here a telegram which he received from Mayor Robert F. Wagner of New York, with respect to urban renewal in the city of New York. I would like to read it in the record on behalf of Senator Javits and Mayor Wagner. Senator SPARKMAN. Very good. Mr. LOWELL (reading): Re your telegram May 13, 1958, following is the reply from New York City: 1. We have at present four planning applications pending before the Urban Renewal Administration, which will involve $20 million in Federal capital grant funds. 2. We could, if Federal funds were available, request funds for seven additional projects for fiscal year July 1, 1958, involving approximately $35 million in Federal capital funds. 3. Approximately the same program for fiscal year July 1, 1959, if funds were available. 4. We estimate we would need $175 million in Federal capital grant funds for the entire 5-year period ending June 30, 1964. 5. We have 13 projects in operation, 8 additional ones presently in planning, and it is expected that 30 to 40 added projects would be covered by the new Federal funds. It is signed by Robert F. Wagner, mayor of the city of New York. Senator, these subjects of housing and urban renewal are of unique and peculiar importance in a society like ours, which prides itself on its concern for the well-being of its members and on the high standards of living it has been able to provide for most of them. The conditions of housing and urban surroundings not only define the environment in which most of our people live, and in which our children are raised, but they have a great deal to do with the quality of the society as a whole. Housing is also in my opinion- and this is most important-one of the battlegrounds of the total competition of our free society with Communist totalitarianism. We Americans have for years gleefully repeated the jokes about Russian housing as proof of the superiority of our own-forgetting how far our own falls short of both the needs and the capacity of our own country to meet them. We believe we could build twice as many dwellings as we are now building, and it would not be a strain on the economy but, on the contrary, a healthy stimulating and sustaining force for economic expansion. But as assistant to the mayor of New York and as a longtime member and officer of ADA, I have a deep and direct interest in housing. In New York, as in every other metropolis, the housing and rehousing of the population is one of the most pressing problems, on which, I regret to say, we have made too little progress in the past decade, in spite of great effort and the expenditure of great sums. What is true of New York City is true in some degree of every other city, large and small. It has been in recognition of the universality of this problem throughout the United States that ADA has from its beginning laid great emphasis on the development of adequate housing programs. In recent years the problem has been compounded by the rapid growth of urban populations and the accelerated deterioration of the older parts of cities. This has posed two problems: The renewal and revival of the old cities; and the sensible and efficient development of suburbs and outlying communities of metropolitan areas. I would like to approach this subject from both the short-range and the long-range point of view, as it relates to the growth of the American economy, with which we are particularly concerned these very days, and as it relates to the objective of housing our population. I think there is no doubt that housing represents the largest important unsatisfied need of the American people. Whereas we have made substantial progress toward filling other basic needs-for food, for clothing, for transportation-in respect of housing we have scarcely run fast enough to stay where we are. I think we only need to go through some of our major cities such as New York, Philadelphia, and Washington to find proof of this unsatisfied need. From the point of view of the American economy, this need, if it could be converted into effective demand, offers a prospect of prolonged and useful employment of resources. What the automobile industry was to the 1920's, the electrical industry was in the late 1940's and early 1950's, the home building industry could be to the 1960's and 1970's-a source of continuous, productive, high-level employment. Instead of being in recession, the housing industry should be working full blast. But as things stand now, the prospects are not very good that it will be. Ever since the war we have been experimenting in this country with various devices by which the ordinary market forces could be stimulated and cajoled to provide housing on a scale commensurate with the need. I think we must now conclude that given the present limitations with which we have circumscribed our efforts, namely that housing must be situated on land speculatively acquired, built by private builders, and largely financed by banks and other financial institutions given these limitations, I think we must conclude that we cannot leave it to the ordinary processes of the market to supply the need. As a consequence, as this committee well knows, costs to home owners have risen in spite of most favorable terms. By that I mean to the money lenders and the mortgage market with the help we give to them. The median cost of new homes is not roughly $15,000 and even the lowest-cost new homes in urban areas are out of reach of the great majority of the families who now need most to be rehoused; and if this has been true of the past decade, what shall we anticipate for the decade or two ahead? If we aim to double our present rates of home building, we must make some drastic changes in our programs even to approach these goals. We would like to suggest two approaches to this. The principal costs in the creation of homes are, first: The cost of building; second, the cost of land, and third, the cost of financing. Leaving aside the first, it seems to us that there are ways in which the second and third can be reduced. About one-fifth or one-sixth of the tag price of a home is represented by the cost of the land. With the expansion of metropolitan areas, speculation has driven up the price of land and has led to uneconomic and undesirable land uses. We should like to suggest that we take a leaf from the book of that well-known conservative, Neville Chamberlain of England, who should be remembered not only for the umbrella of appeasement but also for his services as the Mayor of Birmingham, England. It was in this latter capacity that he initiated the "urban land reserve"-the buying up by public authorities of unused land on the periphery of the city for development as the city grew out to meet it. I would like to propose that your committee consider setting up a large, long-term, low-interest, revolving Federal fund for loans to cities, counties, housing authorities, or land authorities, to acquire, now, land which will be needed for development as the metropolitan areas grow in the next several decades. This land should then be released on a planned basis as required for development. As a condition of sale to a developer, he would agree to price it at the cost to him, plus the actual costs of improvement, thus avoiding the large speculative writeup. By this device it would be possible to reduce land costs materially below what this land would cost 10 or 20 years from now if it is left for speculative development. This would, moreover, make possible the planned, orderly development of utilities, water supply, highways, and public lands for schools and parks, avoiding costly condemnation costs in the future. This, of course, is no more than any prudent business does in anticipating its future requirements and needs; and we can see no reason why a similar approach approach is not prudent and desirable to serve the public interest in housing. By such a device alone we might cut hundreds of dollars from the cost of an average home in the year 1970. It might very well be that for New York City, an existing metroppolis, which has expanded to such an extent, such a plan might be of limited usefulness to my own city; even there, in areas such as Staten Island and Queens, the development of throughways and parkways is bringing land-new land-within reasonable commuting range, and planning now might avoid some of the worst consequences of land speculation later on. Not only that, but I might point out that Rockland County and Putnam County, which are both above the Westchester area, normally considered suburban commuting area, are now considered part of the residential bedroom place for people who work in New York City. The same thing is true of Suffolk County, which is beyond Nassau County. All of these areas, because of parkways, highways, and wonderful bridges, in connection with the throughway, for example, have become commuting areas. The expansion has been made tremendous by people who work in New York City; and I think what is true of New York City in this instance is true also of other large metropolitan communities. But other cities might profit by the experience of New York and act while land is still available, if the Federal Government provided a means for financing land reserves. I realize that this is an idea which will be opposed by people who make a perfectly legitimate business of buying up such land and holding it for appreciation and sale. Nevertheless, we accept the |