Mr. O'HARA. I think you have answered this question, Mr. Foley,. but I would like to touch upon it again: when I left Chicago to come here the men and women in my district were frank in telling me that they expected the Eighty-first Congress to do something in the way of providing an immediate solution of a very acute housing problem. They did not want to go on and on living in shanties and doubled up. Many of the veterans of World War II are living in places where they have not even toilet facilities. I have read no article, I have heard no words, which exaggerate the plight of those veterans in the city of Chicago because of lack of housing. And I, not being as learned in this subject as my distinguished colleagues on this committee, and being a freshman when I got here, thought that there was some answer. And I said, "Certainly, we are going to do something and do it right away, so that this will not drag on and on and on," and I judge from the questions here the other day that I was up in the sky and my feet were not on the ground. Is there no immediate solution, Mr. Foley?

Mr. FOLEY. I think, Congressman, what you are saying is substantially what I tried to say the other day, namely, that emergency measures, by themselves, will not solve our housing problem. So long as we rely solely upon emergency measures, we merely contribute to the long-range difficulties. I think our emergency programs confirm that. We must have a long-range program. We would be much better off today had we established one some years ago.

Mr. O'HARA. Well, the veterans of Washington's Army were unhoused for 2 years after the end of their heroic service to our national shame. How long are we going to leave our present veterans without adequate housing?

Mr. FOLEY. I do not know, sir. I think the answer to that will in large measure depend on the action taken by Congress in connection with this bill, H. R. 4009, and other proposals at this session.

Mr. O'HARA. I think it was Mr. Reuther who suggested that we go at the problem much as we went at our wartime problems. We needed planes in a limited space of time, we were determined to get them, and we got them. And I think he made some suggestion about turning the factories into the building of prefabs or something of that sort. What do you think of that, Mr. Foley?

Mr. FOLEY. I think any such proposal requires careful study, as Mr. Reuther himself suggested in connection with his proposal. Certainly, let me make clear, the housing agency is very much interested and will be very much interested in any proposal which will materially aid in the solution of the housing problem of veterans and others, but particularly our veterans. But also I point out that any one of the individual proposals which are more or less of an emergency nature, it seems to me must be geared into a long-range approach such as we are talking about in this bill.

Mr. O'HARA. Thank you, Mr. Foley.

Mr. MITCHELL. Mr. Chairman.

The CHAIRMAN. Mr. Mitchell.

Mr. MITCHELL. Do you have the figures today that I requested on the need of housing in the various income groups?

Mr. FOLEY. No, indeed, Congressman. That is a subject, as I indicated, that would take a very considerable amount of study, in order to give you those figures.

Mr. MITCHELL. Why has that study not been made? It seems to me that is basic information which you need to plan any housing program.

Mr. FOLEY. It is basic information and it could very well be a major research project. It is simple of statement but very difficult to ascertain on the basis on which I understand you want it. It was done some years ago by the housing agency after the 1940 census data on family income and housing supply became available. Those data, of course, are not current today.

Mr. MITCHELL. Of course, it is a problem which the Nation has been wondering about for a good many years. I am wondering why your department has not been checking into it. You made a great many graphs and a great many studies of housing problems. Why not one which simply says that so many houses are needed in these various income categories?

Mr. FOLEY. We have done a good deal of study on that subject and can probably develop for you some figures but they would not be as conclusive as your question the other day seemed to indicate you wanted.

Mr. MITCHELL. Well, you are just evading the point.

Mr. FOLEY. No I am not.

Mr. MITCHELL. The question was not conclusive. It was merely asking for an estimate as to the number of houses needed by income categories.

Mr. FOLEY. We will be glad to furnish what we can on that. We do not have data to do a complete job. The census of housing provided for in this bill will help in keeping up to date on that.

Mr. MITCHELL. We are talking here about slum clearance. Mr. Cole brought out in his question that we are talking about building a million homes in an area where you need six and a half million. Mr. Egan indicated that was the number needed. At least, the number living in slums in the country today. So apparently in that category we actually need six and a half millions homes; is that right? Mr. FOLEY. Then, I misunderstood your question, Congressman. If you want it in just broad categories as that, I think we can furnish you with an estimate before this hearing is concluded.

Mr. MITCHELL. I hope you will. I do not think it should be too hard to dig out.

Mr. FOLEY. Apparently you want it on a much broader basis that I had in mind.

Mr. MITCHELL. I hope we can get those figures.

Mr. FOLEY. We will give you those estimates during the course of these hearings.

Mr. MITCHELL. On a broad basis, at least, so that we can have some indication of the real housing need in the various categories. We talked about the 20-percent gap the other day. There is another housing need. The 20-percent gap apparently, under an actuality, is 40 percent. You still believe that the bill should carry a definite indication that there shall be a 20-percent gap between the rent of a low-cost housing unit and private-enterprise building?

Mr. FOLEY. Whether the 20-percent figure is exactly the right figure or not is open to discussion, but I do believe that some such definition of the field is necessary at this time.

Mr. MITCHELL. But in actuality it is more or less of an academic point, is it not?

Mr. FOLEY. It is, as I pointed out the other day, in view of the fact that the policy is to direct such public housing as we have to the lower ranges of the low-income field, and that the number of housing units proposed in this bill would still not take you much beyond that, anyway, according to the figures on income that we have. So that it does remain academic in that sense.

Mr. MITCHELL. What is your attitude with regard to the cost limitations on low-rent housing?

Mr. FOLEY. You mean the dollar-cost limitations contained in the bill?

Mr. MITCHELL. Yes.

Mr. FOLEY. Our position on that, I think we have made clear, and I will state it again: If there are to be dollar limitations, as there have been in previous legislation, then we think that the dollar figures set in the bill are substantially where they ought to be as against present costs, in order to make possible meeting the range of needs, community-wise and otherwise, that will be presented.

However, we do not feel that the presence of dollar limitations in the bill is essential to a good bill. And if the Congress and this committee felt that they should be removed, we, knowing, as we have testified, that the real tests of economy in construction are not in the dollar ceilings, would have no material objection.

Mr. MITCHELL. Then, actually you have built under the dollar ceiling in the past.

Mr. FOLEY. As pointed out in Mr. Egan's testimony rather fully. Mr. MITCHELL. The one problem that worries me is that your costs apparently have gone up more than you have raised, in this bill, the dollar ceiling.

Mr. FOLEY. You mean the costs of residential construction?
Mr. MITCHELL. Yes.

Mr. FOLEY. That may be true in some particulars, in some areas, but as against present levels of costs, we are quite well satisfied that the ceilings proposed in this bill would not bar any necessary project.

Mr. MITCHELL. The research program is set up in this legislation and outlined in rather definite terms, but I am wondering whether the program could not be carried out much more efficiently if you had a director of that division of your organization head up the job to be done.

Mr. FOLEY. As a matter of fact, of course, as a practical mode of operation, that is what we would do. Whether we call him a director, or by some other title, I think is unimportant. We presently do have a director of our standardized building codes division.

Mr. MITCHELL. But in this bill we are setting up a director, or whatever you want to call him, we are naming in the legislation a director for the low-cost housing program.

Mr. FOLEY. Yes.

Mr. MITCHELL. Would not the stature or the position of the individual to head up the research program be enhanced somewhat if he were set up in a legal manner?

Mr. FOLEY. Quite possibly. And I can think of no reason for objection to such an approach, if the committee desires it.

Mr. MITCHELL. You would support that as an amendment to the bill?

Mr. FOLEY. I would have no objection.

Mr. MITCHELL. I wonder if we can have a little more definite information on what has been accomplished in the economy house program? You told the Senate of some 65 meetings held throughout the country in the first part of February to be followed by meetings in several hundred more cities. Is there anything definite or concrete which has come out of those up to the present time?

Mr. FOLEY. In the first place, the objective of the economy house program, I think, needs to be constantly restated, because of misunderstandings and susceptibility to misunderstandings. The objective of the economy house program, as we have undertaken it, is to bring about reduction in the cost of producing housing-in the whole range of housing-rather than the production of a large number of small houses. Emphasis upon the production of housing that would be within the reach of what we normally call the middle-income range is one of the purposes. But bringing it about through the reduction of the cost of producing adequate housing, rather than reducing the size or livability of housing.

There have been about 300 such meetings held throughout the country-perhaps a few more or less than that-and they have been made. up almost invariably of a good cross section of the industry and of local government. When I say the industry, I mean the whole broad range of the industry-suppliers, real estate developers, financers, and, in many instances, the skills. The first necessity, in such a meeting, was to bring about a recognition of the need for doing something to attain the objectives that I have just outlined and the first measure of success of the campaign would be, in my opinion, and has been, in my opinion, the readiness of that kind of a group, in a community, to recognize the necessity for the kind of action we are talking about. I would say that almost unanimously throughout the country, the necessity for such an approach has been accepted.

Following that, there has been an encouraging degree of concrete and specific ideas for the development of the kind of housing and the kind of economies we are talking about. It is not the thought—and I think it is quite obvious that it should not be the thought-that such a campaign could succeed from the mere holding of a meeting in a community. That is only the first step. From that, the plan contemplates the establishment of a continuing local cost conference in residential construction, in each such community, and that is the next step that is going foward now.

And again, I may say, there is a very encouraging degree of readiness toward acceptance of such a proposal. Such a continuing cost conference will be constantly dealing with the local situation, which is affected by local conditions and the local possibilities of economiesprobably small, but probably many-in the development of designs and types of housing to meet the local needs, since local needs vary, and any uniform plan set up nationally would not fit. Does that give you something of the background?

Mr. MITCHELL. That gives the background all right. I do not think it indicates whether the economy program is going to meet the need without sacrificing space and quality.

Mr. FOLEY. Well, I think I may say further with respect to that that there are present indications that very considerable progress will be made. Again it is not proposed as a panacea for the problem.

The CHAIRMAN. Mr. Foley, we have three veterans organizations who have come here to be heard this morning. We called you for interrogation by Mr. Mitchell and Mr. O'Hara. I hope we can put these veteran groups on because the House meets at 11 o'clock today. I do not want to curtail your time, but I am just advising you of the circumstances.

Mr. FOLEY. I will be glad to stay as long as the committee wishes or come back, just as you desire.

Mr. MITCHELL. I will be through shortly, Mr. Chairman.

The CHAIRMAN. Very well.

Mr. MITCHELL. About this 5-year limitation: Is there any reason why that veterans' preference should be limited to 5 years?

Mr. FOLEY. Mr. Egan perhaps can answer that a little better than I. You are speaking of veterans' preference in public housing? Mr. MITCHELL. That is right.

Mr. EGAN. Mr. Mitchell, the only reason that was put in there was we hoped at the end of 5 years we could integrate the new program with the old program. There is a veterans' preference set forth in the old program as far as our policy goes. That is by regulation. It is not a statutory policy, so our contractual obligation with the community does not permit us to enforce it. We felt that after 5 years we might just integrate the whole problem of the low-income people into one problem and not separate it into veteran and nonveteran. That was the only reason that was put in there.

Mr. MITCHELL. There are a number of veterans who feel that they are out of circulation now, they may come back into circulation from a hospital or from a rehabilitation of some kind, and if they get back after the 5-year period, they would have no preference. Would you have any objection to the elimination of that 5-year limitation from the bill?

Mr. EGAN. I have no objection.

Mr. MITCHELL. One more question, Mr. Foley, on the economy house program: To date there is no indication that the plans of the builders will bring us a house which can be meet the needs of the middle-income group, to say nothing of meeting the needs of the lowincome group.

Mr. FOLEY. No; I could not agree with that statement in so broad a presentation as that. Let me give you, for instance, one small instance-and it is only an indication, because it is too soon, in the development of that campaign to evaluate its results. One builder has been writing me at great length about the impossibility of reducing costs, and he is a good builder. He was speaking of a modest house which he had been producing for $8,500. He has recently put a house closely parallel to that on the market at $7,200, because he has been able to bring about economies that he did not several weeks ago think he could bring about.

Mr. MITCHELL. Getting back to our income category, we have a group comprising 20 percent of the people having an income of two to three thousand dollars. So they will have to have a house valued at four to six thousand dollars.