Mr. MCKINNON. I think from a practical standpoint we are going to have a very difficult time getting most of these communities to repeal their present building ordinances that contain make-work provisions and supplying practical things that protect the builder but do not put up costs to the point where they are today. The only way I can see that can be done, it will take more than moral suasion to get it done. Mr. FOLEY. I think you are quite right but I think there is another factor that more and more will be of great value and that is public understanding and public sentiment. One of the factors we have that I think is of tremendous importance is a general mass consciousness of the housing problem. It will probably translate itself into definite public sentiment with regard to codes if it is established that they are unnecessarily burdensome.

Mr. MCKINNON. I do not share your optimism on that, Mr. Foley. That is all.

Mr. GAMBLE. One thing that will help this code situation is a matter of education. If they realize what a performance code is, as against the old standard codes, we might get some accelerated motion toward their adoption. Is that not so?

Mr. FOLEY. I think that is so. Getting performance codes cannot be brought about overnight but that is the direction in which we think we should move.

Mr. GAMBLE. Has there been much progres made recently on the volume change in codes or adoption of them throughout the country? I do not know what has taken place in the last year. There was quite a little motion under way when the Housing Committee was in action.

Mr. FOLEY. The one particular code I might speak of is the uniform plumbing code for housing we have been developing and we have already had a number of communications from a large number of communities, and I think some States, concerning their readiness to adopt the code.

It would be rather difficult, I think, to answer your question generally for all codes, beyond what I have already said, but there appears to be growing evidence among the communities of the country of necessity for progressive movement in that field.

Mr. GAMBLE. Did the New York State Legislature authorize a committe to study the code situation!

Mr. FOLEY. I am afraid I did not understand your question.

Mr. GAMBLE. I think the New York State Legislature authorized the appointment of a commission to study the code situation as related to the cities, towns, and villages in New York State, on a voluntary basis. I followed it for a while and I do not know whether it finally got through the legislature or not. I think it did.

Mr. FOLEY. I have been told by our man that that is true and that there is a report filed. We have not the report here but we could probably obtain it.

Mr. MITCHELL. Mr. Foley. In your Senate testimony you set up what we might possibly refer to as an H-day in 1960 when we will reach a goal of a decent home for every family. You mentioned there the total number of homes which will be needed as being between 17,000,000 and 18,000,000. That would work out to about 1,700,000 or 1,800,000 homes a year.

I have one question before I go to the question I want to ask and this is along the lines of Mr. McKinnon's question: If we do go to

that time when we produce 1,700,000 or 1,800,000 homes a year, we are cutting down very definitely the competitive factor that might enter into this picture.

Mr. FOLEY. Would you repeat that question?

Mr. MITCHELL. If we do start producing 1,700,000 homes a year or 1,800,000 homes a year, the competitive factor you mentioned as meeting part of Mr. McKinnon's question will not function to any great degree. In other words, you cannot enlarge the building construction industry and still expect the competitive factor to have any great effect in lowering the cost of dwellings.

Mr. FOLEY. First let me point out, Congressman, that the over-all figure you give is not intended to be new construction, totally.

Mr. MITCHELL. Well, it is construction of units.

Mr. FOLEY. It is the rehabilitation which is very considerable.
Mr. MITCHELL. They are all in the building industry.

Mr. FOLEY. Yes, but not to the extent that would be represented by 1,700,000 or 1,800,000 entirely new units.

I am not sure I follow your question but it seems to me that what you are asking me is whether in a building program in which we might hope to reach, say, 1.5 million in new construction a year, plus the added weight of materials and men in some added number, whether or not that would put such a load upon the facilities that we have, it would no longer be in a competitive situation, is that your question? Mr. MITCHELL. That is the question.

Mr. FOLEY. I think again the answer is "no." As I pointed out yesterday rather briefly and as our statements more fully described the situation with respect to material production, we believe that the productive capacity with respect to materials developing over the period, it would require to develop 1.5 million homes a year would be ample for such production.

Mr. MITCHELL. You make this statement only in relation to materials.

Mr. FOLEY. Yes.

Mr. MITCHELL. How about manpower and the contractor?

Mr. FOLEY. I was about to come to the manpower question. The manpower situation is, of course, a little more difficult to predict, but the trend since the war has been such as to lead us to have the same feeling of confidence in that regard. Therefore, what we are saying is that in aspiring to a housing program of 1.25 million to 1.50 million a year, over the next few years, to reach that goal, we would not be creating a situation which would be inflationary in the sense of creating undue competition for a limited supply of materials in demand. That is our best judgment.

Mr. MITCHELL. Now, looking at it from another point, the point of the Nation's income groups, breaking down the total figure into the number of houses that would be needed, I would like to have some tabulation that might go along with the tabulation that I have here from the Federal Reserve System. For instance, it shows that 31.3 percent of the families are in the income group under $2,000. There are 13,100,000 people in that group. In the family group of from $2,000 to $3,000 income, the percentage is 19.6. The total number of people in that group is 8,200,000. In the group from $3,000 to $5,000 income, we have 28.2 percent, and a total of 11,900,000. Then, the $5,000 over, you have 20.9 percent, and 8,800,000 people.

From the point of view of this committee, which is looking at this immediate legislation as a low-cost program, but has to look at the whole program, can you give us the number of housing units needed to meet the housing demand in each of those income groups?

Mr. FOLEY. We will endeavor to supply it to you before the hearings are closed. We do not have it offhand.

Mr. MITCHELL. I think it would be very useful. That always brings up the lower-income group and the middle-income group and just what should be done there.

Mr. FOLEY. That is right.

Mr. MITCHELL. There is one point in this legislation which always worries me and that is the 20 percent gap. In your testimony you said there would have to be a gap of at least 20 percent. Then, in your statement you said, in effect, that the 20 percent gap was unnecessary. The inference is that the rigid 20 percent gap in the legislation is not necessary to protect private industry.

Mr. FOLEY. What I meant to say, Congressman, I think, was that the proposal in this legislation follows substantially the present policy of the Public Housing Administration in that connection, and I think perhaps Mr. Egan can give you a little more on that.

Mr. MITCHELL. I would like to have a little more on the meaning of the 20-percent gap. I worry about that 20 percent. Where are they going to get their housing? Admittedly, this bill will not meet their needs. In effect, this bill isolates this 20 percent group which cannot expect help either from Government or private enterprise.

Mr. EGAN. In effect, the only way I can answer that is, we have felt consistently all through the program that we should take care of the very lowest income families. We have, as a matter of policy, adopted that, and, as a result of that, there has been that gap, but it has been substantially above 20 percent. At the present time it runs more like 40 percent. One of the reasons I think it was put in the legislation is just putting in the legislation a policy we have been following out administratively.

Mr. FOLEY. The further reason for it, of course, is to place emphasis upon the stated purpose of not attempting to invade a field in which private enterprise can be the focal point. That is the real value as contained in the law at present.

From the various statements you have quoted there, the statistics on income, and from figures brought out here somewhat imperfectly somewhat earlier in the testimony, it is obvious that if we got 1,000,000 units, we would still have only enough to take care of the lower levels of income and still have substantially that amount of gap left, anyway, because you would not have enough public housing to put them in, even if we had it. Therefore, the provision under present and possible forseeable conditions would not deny this to any families, if we are going to try to keep it to the lowest levels.

The question you raise as to what about the others, it seems to me, is a separate question that would not be solved, even if you eliminated this gap provision of the law or even the policy.

Mr. MITCHELL. It would not eliminate it, but by putting that gap provision in here, you are at least pointing out a 20-percent group which means housing help, and to date we are not telling that group how they are going to be helped. Therefore, it puts the onus on us to reach a conclusion along that line.

Mr. FOLEY. This bill does not present itself and has not been presented as one solving every problem in the housing field. We have many others which will have to be solved as we go and probably progressively.

The situation generally, of course, will improve to the extent that we are able to increase the inventory and remove the stringency, shortage, and restore something of what might be called a normal vacancy ration and then you get a situation in which more persons in what we might call the lower half of the middle-income group can hope to get reasonable help.

Mr. MITCHELL. You are not suggesting the hand-me-down policy will meet this need in the middle-income group?

Mr. FOLEY. NO. I am not proposing that as the answer. I am proposing it, however, as a part of the answer because obviously we must continue to make use of our existing inventory. We could not propose to do it all at once.

The CHAIRMAN. There is a roll call in the House. We will have to adjourn.

Could you come back Monday?

Mr. FOLEY. At any time you wish.

The CHAIRMAN. If you will come back Monday at 10 o'clock, I am sure we can get through with you in a short time.

Mr. FOLEY. Very well.

Thank you, Mr. Chairman, and thank you all.

The CHAIRMAN. The committee will stand adjourned until 10 a. m., Monday, April 11, 1949.

(Whereupon, at 12:29 p. m., the committee adjourned, to reconvene Monday, April 11, 1949, at 10 a. m.)