REHOUSING HELD ESSENTIAL

The present bill is the fourth of a series providing for urban redevelopment which has been introduced beginning in 1940. The first to become law was enacted in 1941 and each successive bill has been marked by a whittling down of the controls required in the public interest to the point where the present measure marks their virtual elimination. It even eliminates a provision, the absence of which in the 1940 bill prompted its veto by the governor. This provision required that some protection be afforded to insure the availability of other homes for the families to be displaced on the taking over of an area for redevelopment. To permit the clearance of an area without protecting families who are displaced would ultimately defeat the purpose of a redevolpment program. Adequate rehousing of such families is of major importance and cannot be ignored.

In 1941 a new bill was introduced to meet this major objection. When it became law it contained a provision to make certain that accommodations would be available for displaced tenants at similar rentals in suitable locations. It was a recognition of the fact that clearance of areas alone—that is, without adequate housing for low-income groups-failed to meet the entire problem.

In 1942 another law, known as the redevelopment company law, the one which it is now proposed to amend, was enacted. It stripped away many of the previous controls, but even so, recognized the fact that certain controls were essential if a recurrence of slum conditions were to be avoided in the rebuilding of large areas. Included were continuous control by a supervisory agency; approval by the planning commission of proper accommodations for tenants displaced by the project; no dissolution without consent of the supervising agency; no sale without consent of the local legislative body; and no diminution of public powers of regulation during the physical life of the project; limitation of earnings to 6 percent.

POWER VESTED IN COMMISSION

This vested in the planning commission the power to preserve the project and to prevent increase in the number and size of the buildings; to prevent building upon areas set aside for parks, recreational, and other community purposes, and, in general, prevent changes in the project which would lead to the old cycle of deterioration or decay. In a word, it sought to insure that the desirable features which prompted the approval of the plan would be continued as a permanent benefit to the community.

Virtually all of these controls can be avoided under the present bill. One serious objection which cannot be cast aside "as a minor detail" is the provision which permits the redevelopment company, at any time after its project has been approved, to repay to the city that portion of taxes as to which it was exempted, and thus completely free itself for all time from any public control whatsoever. What is possible is that such a company may acquire land assembled by condemnation, make payment of the sum involved in tax exemption and then free itself from any control as to planning, redevelopment, or neighborhood rehabilitation. This is an abject surrender of the power of condemnation without any adequate public return. It smacks of a grant in the form of a special franchise under the guise of a general law.

The very necessary and vital provisions protecting dislocated tenants which led to the veto of the 1940 bill have been removed completely.

The amended bill is even more amazing in other respects. It contains a provision which would permit the company to acquire property in an area required for its project, including any property devoted to a public use, whether owned by the city or a public utility corporation. The act expressly provides that the "public use" of the Redevelopment Company shall be deemed a "superior" public

use.

This means that the Redevelopment Company may condemn a park, a school, a playground, a firehouse, a public housing project or any other property devoted and used by the municipality in the public interest and then by paying the taxes escape all control and use the property which was heretofore devoted to a public use for any private use that it wishes without controls of any kind.

PRINCIPLE IS INVOLVED

Of course, it may be argued that the city would surely protect its interest in that respect by means of contract, but it borders on sheer brazenness to insert in a statute a provision giving a private corporation the right to clear an area, displace families of low income and then to say that such a purpose may be con

sidered a superior purpose, even as to schools, parks, playgrounds or public housing projects. This important issue should not rest as a matter of contract, but is clearly a matter of principle and a power that should never be delegated away.

It took four legislative sessions over a period of 3 years to reduce to the barest minimum those features which were intended to safeguard the public interest. In any event, in the absence of materials for immediate construction, it is clear that demolition or building cannot be commenced immediately. However desirable planning may be for the development of future projects, the bill contains so many defects and weakens the present law so much that the position taken by The New York Times in its editorial on March 19, 1943, when it suggested a consideration of the conflicting points of view, should be adopted. As The Times said editorially, "The amendments ought not to be disposed of without the fullest possible study, discussion, and publicity."

It is clear that no injury would come if the amendments were to be vetoed and further study given so that the very objectionable features therein were eliminated.

NEW YORK, March 31, 1943.

EDWARD WEINFELD.

Mr. BROWN. The committee will stand in recess to reconvene at 2:30 p. m. this afternoon if the business of the House permits, and if the business on the floor does not permit reconvening at that time, the committee will meet at the call of the chairman.

(Whereupon, at 11: 14 a. m., the committee recessed.)

HOUSING ACT OF 1949

MONDAY, APRIL 25, 1949

HOUSE OF REPRESENTATIVES,

COMMITTEE ON BANKING AND CURRENCY,

Washington, D. C. The committee met, pursuant to adjournment, at 10 a. m., the Honorable Brent Spence (chairman) presiding.

Present: Messrs. Spence, Brown, Hays, Rains, Buchanan, McKinnon, Mitchell, O'Hara, Wolcott, Talle, Kilburn, Cole, Hull, and Nicholson.

The CHAIRMAN. The committee will be in order.

We will resume the hearings on H. R. 4009, the National Housing Act.

We will hear first from Mr. Joseph Clorety, national vice chairman of the American Veterans Committee.

You may identify yourself and proceed, Mr. Clorety.

STATEMENT OF JOSEPH A. CLORETY, JR., NATIONAL VICE CHAIRMAN OF THE AMERICAN VETERANS COMMITTEE

Mr. CLORETY. My name is Joseph Clorety, Jr. I am national vice chairman of the American Veterans Committee.

Mr. Chairman and members of the committee, on behalf of the American Veterans Committee, I wish to express our sincere appreciation for the opportunity to present the views of our membership on the housing problem, with particular reference to the pending bill, H. R. 4009.

In reviewing the events of the year which has elapsed since our national housing chairman, Franklin D. Roosevelt, Jr., last appeared before this committee in behalf of veterans seeking housing, we regret that among these events we cannot record the passage of any housing legislation worthy of the name.

The veterans of this country are entitled to very real credit for the restraint they have exhibited in the face of four long years of congressional inaction. Many veterans, increasingly embittered by the passing months and years of living doubled up or in hovels unworthy of the name home or of paying an outrageous percentage of their income for shelter that they cannot afford, would be likely to disclaim credit for restraint and charge themselves and their leaders with being-if the committee will pardon the expression-suckers for tolerating the merry-go-round upon which constructive housing legislation has been taken for a ride in the Seventy-ninth and Eightieth Congresses.

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In making these remarks on the feelings of veterans within the American Veterans Committee, in other veterans' organizations, and outside veterans' organizations, I wish to assure the committee that I speak with marked restraint compared to the expressions I have heard from fellow veterans. My statement is an extremely watereddown version of the feelings of the average veteran. The American Veterans Committee recognizes that millions of veterans desperately need housing, and we believe that the only adequate answer to the veterans' housing problem is to provide decent housing for all of our citizens. We support preference and priorities for veterans because their need is actually greater, and their disadvantageous position in most cases was the direct result of their service to their country.

The bill before the committee today (H. R. 4009) meets with our hearty approval insofar as it sets forth the basic provisions for an adequate program of low-cost public housing and slum clearance. This bill is not a veterans' bill in the sense that that term is usually interpreted, but for the American Veterans' Committee it is a veterans' bill in the truest sense of the word. By providing decent housing at rentals which our Nation's low-income families can afford, it creates the kind of healthy society in which democracy can flourish. That kind of society is what we, as members of our armed services, fought for during the war; we are still fighting for it today as veterans.

I do not wish to take up this committee's time in repeating once again the figures, data, and arguments which have for so many years been laid before it. Perhaps no subject has been so fully investigated and so little acted upon as housing. The facts are on the record, and the record speaks for itself. Such data, however, are accumulating. For example, I understand that a committee of the New York Legislature has officially reported that only 4 percent of the veterans in New York City can afford to buy or rent new units now under construction in New York City. If the committee does not have this report, I would urge that its staff obtain copies thereof for all members of the committee. If my understanding is correct, this report, subscribed to by members of both major political parties acting in their official legislative capacity, has pin-pointed about as damning an indictment of the deficiencies of the housing industry--and, when I say housing industry, I refer to it in the broad aggregate. We recognize it as a very complex industry, in which the deficiencies arise from the nature of the industry rather than from any particular fault in in any particular segment of the industry-and the need for bold, large-scale action by the Federal Government as could be reasonably desired.

There are three specific points which I should like to emphasize at this time, in connection with the proposed legislation before you. The first of these deals with the number of public-housing units authorized by H. R. 4009-namely, 1,050,000 units over a period of 7 years. The American Veterans Committee considers this a minimum figure for our public-housing program if we are to reach the over-all goal of 1,500,000 new housing units per year as set down in the report of last year's Joint Committee on Housing. One million and fifty thousand dwelling units over a 7-year period means 150,000 such units annually-only 10 percent of the annual over-all goal. Surely this committee is well aware that more than 10 percent of our population is

unable to pay rentals at which it can secure decent housing. Publicly subsidized housing must be made available to this group. We cannot provide less than 1,050,000 such units over the next 7 years.

The second main point which I wish to make to the committee today is to call its attention to the fact that H. R. 4009, excellent as it is, does not, by itself, meet our national housing need. It is a bill primarily concerned with the lowest income segment of our population; it ignores entirely the middle-income group. Yet, it is increasingly obvious that the lower part of the middle-income group is simply not able to pay the present cost inherent in construction of housing for profit by private enterprise. A high percentage of the people who comprise this sector of our Nation are young veterans and their families. We feel that the members of this group should receive assistance in solving their housing problem, because we firmly believe that the family now, as always, constitutes the bedrock of American society.

To meet the needs of this group, the last national convention of the American Veterans Committee, held in Cleveland last November, unanimously went on record in favor of direct Government loans at 3 percent interest rate to cooperatives, limited dividend corporations, and nonprofit corporations, for construction of housing at moderate prices and rents. I would like to ask the committee at this time to give very serious consideration to incorporating such a provision in the present terms of H. R. 4009, and thus turn this bill into a comprehensive bill which would really meet our Nation's housing needs. The American Veterans Committee does not believe that piecemeal measures are the best way to solve this major national problem.

Thirdly, I wish to leave with the committee one vital thought. It is this: That action must come now, at this session of Congress, without further delay and compromise. It is a sorry spectacle to look back on the record of the last 4 years and see how housing legislation has been kicked around. Investigation after investigation has proven that the high cost of housing is a top priority national problem. But Congress has not acted. It must act. The eyes of the Nation are on this committee and this Congress as it deliberates today.

In summary, therefore, the American Veterans Committee wishes to go on record in wholehearted support of H. R. 4009 with particular emphasis on the 1,050,000 public-housing units which it authorizes. We urge this committee, however, to include in this bill provisions for direct Federal loans for construction of housing for middle-income families. And, above all, we call on this committee to justify the long patience of the American people and of veterans by acting now, without further delay, to effectively meet our No. 1 national problem: housing.

The CHAIRMAN. Thank you, Mr. Clorety. We are very glad to have the views of your organization.

Are there any questions?

Mr. COLE. Mr. Chairman.

The CHAIRMAN. Mr. Cole.

Mr. COLE. Mr. Clorety, as I understand it, you believe that the housing problem would be met by the adoption of your suggestion for direct loans to cooperatives, limited dividend corporations, and nonprofit corporations?