Senator SPARKMAN. The next witness is Mr. John H. Haas, executive secretary of the Metropolitan Association of General Improvement Contractors.

We are very glad to have you, Mr. Haas.

We have a copy of your statement. You proceed in your own way.

STATEMENT OF JOHN H. HAAS, EXECUTIVE SECRETARY, METROPOLITAN ASSOCIATION OF GENERAL IMPROVEMENT CONTRACTORS, WASHINGTON, D. C.

Mr. HAAS. Mr. Chairman, my name is John H. Haas, and I am appearing here today as spokesman for the organized home improvement contractors in the Nation's Capital. Since we are maintaining constant contact with many similar groups throughout the country, we have been in a position to assemble certain information in the field of housing rehabilitation which, we strongly feel, should be brought to the attention of this committee.

Like nearly every other trade, we, too, are concerned with, and somewhat affected by, the present recession. However, we consider it less as a threat than as a challenge to our profession, and this for a very good reason:

The Bureau of the Census reports that there are about 30 million homes in urban areas which are in need of essential repairs and improvements. Since we have been told that this recession could be overcome by increased consumer spending, we have become rather optimistic. For an increase in consumer spending is primarily a matter of incentive, such as necessity, price, or credit. Thirty million defective homes are a gigantic reservoir of spending incentive, worth anywhere from $25 million to $50 billion in basic materials, services, and labor. The necessity is there, the price is right, and we can do the job; the only thing missing is an efficient credit mechanism for housing rehabilitation in the lower income brackets.

I believe it might be helpful at this point to digress briefly in order to meet the usual argument that title I improvement loans provide such a credit mechanism. They do, of course, but the maximum repayment schedule of 5 years imposes too heavy a burden on the monthly budget of the lower income groups which constitute the vast majority of displaces in urban-renewal operations. Proof of this may obviously be found in the fact that the National Housing Act provided 20, 30, and even 40 years' amortization for such cases.

The urban-renewal program, as initiated by Congress, is probably one of the healthiest measures our Government has ever undertaken. Like many a new program, it has its weak spots and complications that need to be ironed out, and you may rest assured that nobody is more grateful for such an opportunity than we are with our 30 million potential customers.

Of the two legislative instruments, sections 220 and 221, we are mostly concerned about the latter.

As to section 220, I would like to confine my remarks about it to this comment: Section 220 reminds me of an emergency hospitala patient has to be pretty sick before he is admitted.

It is, of course, most reassuring to know that our worst slum sections could be-and are being-eliminated through this facility. But what about the others, the thousands of communities in which blight is gnawing away at decent neighborhoods?

This is, we believe, where section 221 should come in. Whereas section 220 with its towering maze of administrative prerequisites on the Federal and municipal level is conditional upon a substantial contribution from the United States Treasury-that is to say, taxpayers' money-the revised provisions of section 221 could and should function as a quick and simple rescue operation, activated by the initiative of the individual, the availability of lenders, and the skill of operative builders and contractors. In addition, it needs only the proper credit mechanism to set it in motion.

We all know that the part of urban renewal under section 221, to put it euphemistically, is not operating satisfactorily. Impressive evidence is furnished by the latest available statistics which demonstrate that the majority of cities with an authorized project have, thus far, not taken advantage of whatever facilities were made available to them.

I do not want to take up your time with figures and quotations, but you will admit that something must be wrong with the present machinery of section 221 when cities like Washington, D. C., obtain an authorization for 3,500 units and report less than 100 commitments issued after a whole year has passed. Or take Philadelphia, where nearly 4,000 units were authorized and not 1 application was received by the start of this year.

You will find the identical situation elsewhere-Hartford, Denver, Jacksonville, Shreveport, and many other municipalities.

Or take the whole State of Alabama, where for a number of communities, 5,090 authorizations were issued, and only 80 starts of construction-80 out of 5,090.

We find that a great amount of attention is paid continuously to problems of new construction, and justifiably so, for the "magic million" of new home starts per annum has become the pivoting indicator of prosperity. Legislative concern about downpayments, mortgage terms, availability of funds, secondary market operations, et cetera, is considerable and, I repeat, most welcome. It should not, however, impede the realization that our tremendous existing housing inventory of over 50 million nonfarm residences is in pressing need of a comparable amount of attention.

It is our considered recommendation that, in order to render it serviceable, a revision of this section is urgently needed with changes in two directions-basic policy and special requirements.

A change in basic policy seems motivated by the fact that section 221 procedure, which concerns itself in the meaning of the law with individual homes and homeless individuals, is now closely linked to section 220 which operates only on the project level as an area concept. It is this functional assimilation of policy that has rendered 221 operations impractical.

A brief demonstration will bring this point up to absurdity.

Section 221 is aimed at assisting a family displaced by Government action. Such Government actions take place almost every day in almost every sizable community. But in order for the Jones family to obtain such assistance, the following events must first have taken place:

1. HHFA must have received a formal request from the municipal government with an explanation and stipulation of need (for section 221 assistance).

2. A complete community program for slum clearance must have been received and approved by HHFA.

3. HHFA, then, must issue a formal "certification of need"-not to the Jones family, as one may expect, but to FHA. This certification, however, will not have reference to the Jones family either; it will merely state that the community in which they live is "certified for assistance."

4. The municipal government, then, must make a formal request, this time to FHA, asking for authorization of 221 loan applications Only after all these steps have been taken and favorably completed can the Jones family start to make its application for relocation housing. To be exact, they will merely apply for another certificate which will make them "eligible" for relocation housing if, when and where available. For all practical purposes, they are then right back from where they started, for, here again, statistical reports show a tragic picture.

At the start of 1958, approximately 125 municipalities had gone through the aforementioned procedure and obtained authorizations for a total of about 65,000 units. Less than 50 of these 125 cities reported any construction or rehabilitation starts at all, and the total number of units thus started did amount to 1,500 out of 65,000-or less than 3 percent.

To make matters worse, consider the many hundreds, if not thousands, of communities which have failed hitherto to attempt getting such 221 assistance through the aforementioned procedure. And consider, too, the thousands of communities with acute problems of blight and displacement-but without a slum clearance program-which automatically excludes them from the program of section 221 and makes the situation of their individual "Jomes families" utterly hopeless.

We hope that you will see the need for revision, and we, therefore, submit the recommendation that rehabilitation assistance loans under section 221 be made available to certified applicants within the general market area of any incorporated town or municipality upon presentation, to the competent insuring office of the Federal Housing Administration, of suitable evidence of Government action threatening or causing displacement of applicant.

Now, this may appear to many as a rather radical change in the present structure of urban renewal procedure and policy, but we must come to recognize the fundamental difference between slum clearance and rehabilitation housing. To become effective, both objectives cannot possibly be governed by the same legislative principles or handled successfully by the same administrative apparatus.

Section 220 is, and should remain, a program for area planning on a special project basis with all necessary corporate safeguards. Section 221, in contrast, is meant, and should be engineered accordingly, as an individual tool for assistance in individual cases.

It could thus become the proverbial ounce of prevention in the fight against blight: it will preclude the formation, in place of paying for the clearance, of slums. It would also retain, in this revised form, three sufficient warranties against possible misuse: the FHA through its insuring office, the verification of the Government agency causing displacement, and the certification of eligibility by the municipality. By installing this machinery for section 221 assistance we would not only avoid unnecessary waste of governmental functions and contribu

tions, but we would also eliminate the present injustice which favors the displacee in an authorized area for certain privileges that are denied any other displacee outside such area. If we attempt by law to remedy the damages caused by an action of government, we should make this remedy available and applicable to any and all victims of such government action without discrimination.

In addition to this change in basic policy, we would also like to make three recommendations as to changes in special requirements: 1. The loan ceiling for all cases should be set at $12.000. This would not only make a larger number of dwellings available for rehabilitation, but it would also allow more room for absorption of existing encumbrances such as are customarily found on older properties. And it would also eliminate the need for differentiation between normal and high-cost areas.

2. Rehabilitated dwellings should be held for 30 days after completion for eligible displacees. During this time, the dwelling must be advertised and posted as available for such purpose.

3. The requirement for a minimum downpayment should be omitted. Closing costs, taxpayments, insurance premiums, and advance commitment charges or marketing fees required by FNMA should be included in the loan request and paid out of proceeds.

With the above changes, section 221, in our humble opinion, may present the efficient instrument for rehabilitation and relocation housing that is needed today more than ever before. We are grateful to you, gentlemen, for the opportunity to present our thoughts, and we most gladly offer any further explanation and assistance possible whenever you care to call on us.

Senator SPARKMAN. Thank you very much. It is a very fine statement. We are indebted to you for it. Thank you, sir.

Mrs. Houser, you were not scheduled until tomorrow, but we are going to have such a crowded day that

Mrs. HOUSER. I have only one copy of my statement with me. Senator SPARKMAN. That is all right. You can supply us copies, can you not?

Mrs. HOUSER. All right.

Senator SPARKMAN. Before you go on, I want you to understand it is entirely up to you. You are scheduled for tomorrow. If you prefer to wait until tomorrow you may do so.

Mrs. HOUSER. Well, whatever is okay.

Senator SPARKMAN. If it is agreeable to you to go on, we will go on and hear you this afternoon. Then you can supply us with copies later.

I will caution you about one thing. We have up a conference report in the Senate. There is going to be a rollcall on it, so we will have to go when that time comes.

You go right ahead.

STATEMENT OF MRS. JENCY PRICE HOUSER

Mrs. HOUSER. Mr. Chairman and members of the Senate Banking and Currency Committee, my name is Jency Price Houser, legislative representative for the Cause of Housing Designed for Permanent Occupancy by Mature Single (Unattached) Persons-but more especially business, professional, and retired women.

For over 10 years now, I have represented single persons needing a way of obtaining their own housing. In 1950, I was instrumental in having added to the National Housing Act subsection (g) of section 213, reading as follows:

Nothing in this act shall be construed to prevent the insurance of a mortgage under this section covering a housing project designed for occupancy by single persons, and dwelling units in such a project shall constitute family units within the meaning of this section.

This was the first time, to our knowledge, that single individuals had been even recognized in the act.

In 1954, I presented the first statement bringing this need to the attention of your committee and have followed through each year since with a statement, all of them having been printed in the volumes of official hearings. Quotations from many parts of the country were printed therein. They were from governors, mayors, city council members, housing officials, lawyers, ministers, labor leaders, teachers, writers, social workers, architects, Government officials, organization directors, women's club leaders, and accountants, as well as from employed and retired single individuals, including widows. What they said is as true now as then.

Another series of such diversified documented support on a national basis is a part of this statement, and I can assure you that it is but a brief selection, typical of what we have received during the last few months.

Let me also give you some recent statistics which I believe will help you to see why such a program would tend toward housing women in particular.

In January 1958, the Reader's Digest quoted an article which appeared in Harper's magazine in October 1957, saying in part:

There are now about a million and a half more women than men in the United States, and the census bureau predicts that by 1975 women will outnumber men by perhaps as many as 3,600,000. This growing surplus is likely to cause some interesting changes in American society—in our courting and marriage habits, family life, the job market, even politics.

At present there are 7,700,000 widows in the United States, a good proportion of them in their early 50's and many in a precarious economic position.

The quotations from single women in this statement will show what is meant by "precarious."

Based upon those figures, and upon information which has come to us over the years, we believe a conservative estimate of the immediate need of housing would be for 2 million single persons. This would be the equivalent of almost 4,000 in each of our congressional districts.

As a result of a special survey during the last few weeks, I have received further written evidence of the desperate need of a housing program for lone women, in nearly all of the United States. It is not only the constant creeping upward of rental requirements that these people are having to cope with; the quality of housing which many are forced to occupy is beneath the dignity of American wonen. They are priced out and designed out of the housing market.

Single women do not often want to live out in the suburbs, but they cannot afford the luxury apartments and developments being built within the city. There are hundreds of thousands caught financially between the public housing programs set up for poor people