Page images
PDF
EPUB

One further point and I will turn over the rostrum to my colleague, Mr. Goodman, and that is with reference to the point made by Congressman Cole. It is one that happens to concern my union particularly, and that is the problem of what to do about the rural nonfarm worker, in the mining village, or the mining camp, as it is commonly described, and the mill village. Congressman Brown knows very well what I am talking about. There is not only a great shortage of such housing, but it presents certain economic problems. We are convinced that the terms of this bill, where it specifically refers to rural nonfarm workers, that is to say, people living in isolated areas who are employed on the farms, that this act permits construction for that type of worker. However, I might point out that obviously, in the mining regions, you would probably find that the mine worker, in most instances, is not eligible for this type of housing because of income limitations, and unfortunately a large number of the cottontextile workers in southern communities are also ineligible on those grounds today--although some are-because of the fact that we now have, even in cotton textiles, an actual prevailing rate of approximately ninety-some-odd cents.

We do feel, however, that some portion of this problem can be dealt with under the terms of this bill, and that it has been the policy of the Housing Authority during the years when it was in operation prior to the war to develop this type of housing as rapidly as it could be done. But we feel that basically that problem can only be dealt with adequately under a middle-income program.

Finally, let me say, on this question of the gobbling up or of the unfair sharing of the benefits by large urban areas, we are convinced that that will not take place, because the bill itself has certain restrictions as to the apportionment of the funds, and that finally, as it has in the past, it is definitely the policy of the administration to see to it that all types of communities are enabled to share as equitably as possible in the program, and we are convinced that the scrutiny of the Congress and the pressure of public opinion will be such that there will be no undue absorption of the benefits of the program by any particular area.

Mr. BUCHANAN. In other words, Mr. Edelman, what you are saying is that the public housing features of this program are not the sole answer to the housing problem which faces the Nation, because they do not reach those in the middle-income brackets, such as the automobile workers, the steel workers, and so forth, whose earnings average somewhere between $2,500 and $1,000 a year and they are not eligible for public housing?

Mr. EDELMAN. That is exactly correct, of course, Mr. Congressman. We are saying, nevertheless, that this is an essential and absolutely imperative and fundamental part of the program, H. R. 4009, but that it should be supplemented with provisions for dealing with these other groups.

The CHAIRMAN. Mr. Goodman.

Mr. GOODMAN. I am Leo Goodman, national director of the CIO housing committee. I would like to begin my presentation by commending this committee as the only one in Congress, on the House side, that has contributed to the great hope and promise that the American people had after November 2. The one law which has passed the Congress, which has meaning to the little people of this country, the

rent-control law, is on the statute books after long hours of arduous work by the members of this committee, and I think you are to be heartily commended for the work you did in that regard.

We feel, unfortunately, however, that the law is being maladministered, and we hope to have an early occasion to discuss the problems that have been raised by that law with you.

We are here today, as we have been before you in the past, under mandate of a resolution passed by the governing body of the CIO. You have all had, previously, the legislative program of the CIO entitled "For All the People” and if any of you are not familiar with it, I will pass a few copies to the clerk for distribution to you.

However, out of that program, the resolution on housing, the full text of which has been distributed to you, is before you and is the mandate under which we are here before you today.

The CIO continues to support the public housing bill as it has for the past 5 years, in previous hearings before you. We sometimes grow too careless to the power of the slums which surround us, and so I have brought with me, for the benefit of the committee-and which I hope the clerk will distribute and the members will pass around among them—some pictures taken from various points looking towards this building and the Congress, some pictures which received wide attention when they were considered by the Congress, showing the slums in the immediate vicinity of this building, and I hope the Members will not grow too careless and regard these as part of the common everyday activities and events of their lives, in passing these buildings, such as mentioned in the Appendix of the Record this morning, where one Member said, “We have considered this bill, and seen these slums for 12 years." We feel that these slums, having existed, some of them for 50 years, some of them for 80 and some a hundred, have reached the end of their useful life in society and should be eliminated and eradicated, and I know that this committee will do its share for the little people of this country, in the passage of the bill pending before you, H. R. 4009.

This bill provides not only for slum clearance, for public housing, but for farm housing, for housing in rural nonfarm areas, and also begins to attack part of the problem which has been raised so sharply here in the questioning, the need for finding methods for reducing housing costs, and in the bill you have a more adequate provision for housing research than has been granted in the past.

Mr. NICHOLSON. May I ask a question at this point, Mr. Chairman? The CHAIRMAN. Mr. Nicholson.

Mr. NICHOLSON. Have you any estimate of what it would cost to clear up the slums in the Capital City ?

Mr. GOODMAN. Approximately the same cost as 1 hour of the past war, about $2,500,000.

The CHAIRMAN. You may proceed, Mr. Goodman. You may conclude your statement before being subjected to interrogation, if you desire to do so.

Mr. GOODMAN. Whatever the chairman wishes.
The CHAIRMAN. I think we had better do that. It will save time.

Mr. GOODMAN. So we have adopted the resolution which is before you for a program to meet the total housing needs of the American people, and because sometimes it is easier to understand it visually, I have drawn a chart on the board, indicating the approximate amount of rent that the families under consideration can afford to pay.

If we take this rental consideration as our primary concern—and it is, after all, the fundamental question before the committea—meeting the needs of the families of American with rental or monthly payments that they can afford to pay out of their budgets is the fundamental problem.

We find that there are approximately 20 percent of the population who are going to be benefited by the public housing feature. That is people who can pay from zero to $30 a month. And this committee knows that there are a large number of families, particularly welfare families, who come pretty close to the zero line in the amount they can afford to pay. And the national average for admission into public housing now stands at approximately $30 a month.

On the other hand, we have passed programs through the Congress, title VI, 608, and sections of the Federal Housing Administration program, which have been producing, under private enterprise, some housing—last year to the total of 935,000 units—which rent on an average, or sell on an average monthly payment, ranging from $85 a month up to $150. But the national average for those people stands today at the astoundingly high figure of $96 a month. That is the average of the privately produced houses in this past year. And we have this tremendous area, which we call the middle-income group, covering almost 70 percent of the American people, who are now neglected in any program providing for the Nation's housing needs.

So we have proposed this program, which you will find as item No. 4 on the resolution : "That the Federal Government break the bottleneck in the home-loan market by a program of direct loans, first to GI's"—they are the first major victims of this shortage—“second, to cooperative and mutual home ownership groups who are now frozen out of the rental market.”

And we say that this area of people, 70 percent of the American people, should be permitted to take their own voluntary action to solve their housing problem. This is not a Government program. This is not a subsidized program. Rather a program which attacks the housing costs of these people on three major items.

The items, though, go up to make this $96 a month-which, after all, is the amount that comes out of the people's pockets each month, whether for purchase or rental-constitutes, over the total life of the house, approximately three equal amounts. The first item is the construction cost. We have presented to you the Reuther plan, which we hope will be adopted, directed to reduce the first item, construction cost, for millions of American families, through the use of industrialized techniques and factory production methods. Those methods will cut down this construction cost, item No. 1, which is approximately 3313 percent of the total cost of living in a house over its useful life period.

The second item of cost which, quite surprisingly equals, on the average, the construction cost, is the cost of financing, and 90 percent of that consists of interest paid over the life of the mortgage because the average home buyer does not have sufficient funds to put more than a sizable down payment on a house. And so financing is the second item of cost.

We have proposed, in our program, in the resolution pending before you, that there be direct Government loans to cooperatives and mutual home ownership groups, at not more than 3 or 312 percent. And we are very happy to see that in the some 37 bills which have been introduced in the House by various members, over a broad range of political affiliations, that there is a growing acceptance of the concept of direct Federal loans at the going rate of Federal interest. Some charge in addition a half of 1 percent for the administration, and some even eliminate that factor.

So item No. 2 can be reduced.

The third item is maintenance and management, and in order to reduce the cost of that factor, out of the experience of many CIO members, we have reached the conclusion that the use of the cooperative form of ownership—the mutual home ownership of a groupprovides the economies of management and the economies of maintenance that the individual cannot provide for himself. And so we are very strongly in support of the middle income program which this Congress, representing, as it does, through the victory of this past election, the balance of power made up of the people in this middle income group, we feel will not proceed through this year without the passage of H. R. 4009 in the House, for the people at the bottom, and maybe some program-I am not too familiar with what the Congress ought to do, but there has been some consideration on the Senate side-S. 712—which would provide some additional aid for the people at the top; they tell me that they might be able to get the bottom down to $78 a month by doing that.

But even then we should have left this tremendous area of the middle-income group, for which there will have been no program, and so we urge this committee and the Congress to take seriously in consideration the provisions of the bills which have been introduced by some members of the committee, Mr. Patman's bill, Mr. Buchanan's bill, Mr. Mitchell's bill, and some 33 or 34 other bills, introduced by Members of the House, some 17 on the Republican side, I am happy to see, many of whom would represent new support and new additions to housing legislation for the people.

Mr. BUCHANAN. Mr. Goodman, what do real estate people think of a program of this type, the direct-loan feature particularly?

Mr. GOODMAN. There is increasing indication that they are in support of these provisions.

Mr. BUCHANAN. Do you have any substantive comments or statements that have been issued by them?

Mr. GOODMAN. Yes; I would like to introduce for the record at this point, if I may, an article from the New York Times of December 20, 1948, headed "Real Estate Group Consideration Urging Swedish Idea for United States in Place of Public Projects."

Mr. BUCHANAN. What real estate group is that?
Mr. GOODMAN. It is the National Association of Real Estate Boards.
The CHAIRMAN. It may be inserted.
(The newspaper article referred to is as follows:)

[From the New York Times, December 20, 1948) COOPERATIVE PLAN ON HOUSING DRAWN-REAL ESTATE GROUP CONSIDERS URGING

SWEDISH IDEA FOR UNITED STATES IN PLACE OF PUBLIC PROJECTS WASHINGTON, December 19 (UP).-The National Association of Real Estate Boards said today it probably would ask the Eighty-first Congress to enact a cooperative program in place of public housing in any new housing legislation.

Herbert U. Nelson, executive vice president, said a special committee was drafting the program and hoped to have it ready for the January meeting of the directors.

The association, long an enemy of public housing, will pattern its program after one in effect in Sweden. Mr. Nelson said it could result in construction of upward of 250,000 new units a year.

He discussed the proposed program in an editorial in Headlines, the association's weekly newsletter.

In Sweden, Mr. Nelson said, cooperative home building societies get grants and loans from the Government but basic financing is left in the hands of banks and other private lending agencies.

"A constructive plan of this type can be devised for our country," he said. "It can achieve lower rents than those charged by public housing because of the enormous load of administrative and management costs which public housing must bear."

President Truman is committed to support the Taft-Ellender-Wagner housing bill in the new Congress, including its disputed slum-clearance and low-rent public-housing sections. He made the failure of the Republican-controlled Eightieth Congress to approve the measure one of his principal campaign issues.

Mr. Nelson said low-rent housing was not a political issue but a question of what was the most effective way of providing adequate facilities for small wage earners.

If we can work with our Government on a constructive plan which will aid private enterprise in producing an abundant supply of moderate and low-cost housing, it would be in line with the responsibility involved in business leadership,” he said.

He declared that the suggested cooperative plan might be the only road to home ownership for millions of veterans and low-income families.

The Swedish cooperative plan has been in operation for about 15 years. Although Sweden's population is only 4 percent of this country's, Mr. Nelson said, Swedish cooperatives build about 10,000 new units a year.

Mr. GOODMAN. In addition, the chairman of the National Association of Cooperatives, under the heading “Realtors group support of plan for cooperative home owning predicted," and the comments of Mr. Walter S. Schmidt, Cincinnati realtor and chairman of the National Association of Real Estate Boards Committee on Cooperative Housing, concludes with the following paragraph, which I would like to read: “Under the proposal,” he explained, “at least seven persons would have to band together to form a cooperative. Private concerns would give a first mortgage on such developments up to 65 percent of the total cost at reasonable rates. The Government would put up 30 percent of the cost, and take a second mortgage. The remaining 5 percent would be borne by a down payment by the members of the cooperative."

The CHAIRMAN. That may be inserted in the record. (The newspaper article referred to is as follows:)

[From the Wall Street Journal, December 24, 1948) REALTORS' GROUP SUPPORT OF PLAN FOR COOPERATIVE HOME OWNING PREDICTED

Cincinnati (U. P.).--An official of the National Association of Real Estate Boards predicted that_the association will propose cooperative home-owning societies, aided by the Federal Government, as a means of beating present high costs of home building.

Walter S. Schmidt, Cincinnati realtor and chairman of a NAREB committee seeking to lower housing costs, said the plan will be presented in detail at a meeting of the association in Washington in January.

Mr. Schmidt emphasized that the plan bore no resemblance to public housing, which he said is "socialistic in nature and wrong in theory." He said that none of the aid the Government would give under the plan could be regarded as a subsidy.

Under the proposal, he explained, at least seven persons would have to band together to form a cooperative. Private concerns would give a first mortgage on such development up to 65 percent of the total cost at reasonable rates of interest. The Government would put up 30 percent of the cost and take a second mortgage. The remaining 5 percent of the cost would be borne by members of the cooperative.

« PreviousContinue »