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is the right to any increase in the value which accrues to the land from redevelopment. The Town and Country Planning Act of 1947 has had far-reaching effects on the redevelopment of property in Great Britain.
The most important factor is the introduction of what is termed a “development charge,” which is inevitably having the effect of sterilizing building development. This charge is made when a site becomes more valuable as a result of development. For example, a man has a private house adjoining a block of offices and for the purpose of extending his business wants to combine his house to his offices. He must now pay this development charge, because the "new use" is considered an improvement in value.
If permission is obtained to change the existing usage, the state now takes 100 percent of the increased value. This levy is made immediately, even before a brick is laid. Existing owners are affected just as seriously as new owners. An Englishman cannot now add a garage to his house without paying the development charge, unless the additional building does not exceed 10 percent of the cubic capacity of the house. The same will apply if he needs to add an extra bedroom or a bathroom.
This charge cannot be avoided, as some householders believe, by making small improvements at intervals.
One obvious result is that the incentive to improve property is dis. appearing. If an owner is compelled to pay heavily for the privilege of improving his property, he naturally decides it is not worth while.
Then Central Land Board, recently formed, can be called in at any time to exercise compulsory acquisition and to make any owner part with his land at “existing use" price.
While 8,500,000 houses under private ownership are now rentcontrolled, Government-owned houses are exempt from such control. The local authorities of the cities can increase the rent of their houses to cover rising costs of repairs and maintenance, but the individual owner is allowed no increase at all to cover the steadily rising cost of maintenance. Many small owners today are actually losing money on the houses which they own, and real hardship is being felt by those who invested in this class of controlled real estate the small amount of capital they had been able to accumulate during a hard-working lifetime. Cases are not infrequent where the owners in despair are offering the property for nothing to the local authorities of the cities. Hundreds of houses, for example, in Manchester and Liverpool and various parts of Lancashire have been offered free to the Government but declined, and owners cannot get them off their hands by any means.
Mr. Derek Walker Snith, M. P., commenting on the position of the owner of a small piece of property and his inability even to cover the cost of maintenance out of his income from the property, says:
Mr. Bevan may have the unenviable record of being the first Minister of Health to create more slums than he has cleared.
Lord Hylton recently declared:
It is financially easier to improve accommodations for cows than it is for the small owner of rent-restricted houses to keep them in repair. Wages of $80 to $120 a week go into houses rented at from 50 cents to 80 cents a week. Yet millions a year are spent on dog and horse racing and football.
It would be easy to draw parallels between these people whose ability to indulge in luxury living is made possible by the public subsidies for the roof over their heads, and the residents of publicly owned housing projects in our own country where there was recently an argument as to whether or not television antennas should be permitted in the projects. (Those in favor of television, incidentally, won out.) And we now have the amazing spectacle of families in Government-subsidized housing projects who are able to afford and enjoy television and yet are considered so unfortunate as to merit public assistance in paying their rent. It is far more pertinent, however, that we emphasize the need for the whole question of housing policy in the United States to be considered in its fundamental aspect, should the homes be owned by the people, whether for their own occupancy or to let to their neighbors, or should this country move into a program for Government ownership of homes? Certainly the precedent of Britain drives us to the conclusion that if we go into the public ownership of houses and apartments, we shall strike dangerously at the American tradition of home and farm ownership, thrift, and the incentives to individual effort and to saving. Certainly an American citizen is not under obligation to build a new home for the family of his neighbor. Certainly there are some phases of American life which it is not necessary for Federal largess to improve and in which it is not necessary for Federal bureaucracy to have a finger. Must we drink from the same bitter cup at Britain, the cup of sugar-coated, bureaucratically promoted, plausible efforts to do things for the citizens which the citizens and the towns should do for themselves? Before we commit this country to the pattern which in Britain is so clear in retrospect, let us take to heart Mr. Churchill's own words that,
We must beware of trying to build a society in which nobody counts for anything except the politician or an official, a society where enterprise gains no reward and thrift no privileges.
To sum it up, the situation in England today is that houses are not being built in the volume that is possible with the materials on hand and with 100,000 building-trades workers now unemployed. The bureaucracy, instead of having successfully built homes in a large volume, has continued to excoriate and criticize and actually prevent substantial building of houses by private enterprise. It is clear that when the centralized government and its planners start in to control an industry such as building, with the paper work, the applications, and the approvals required, they create delays and red tape that become almost insurmountable for any except the bureaucrats themselves. It is significant that the Conservatives, who are right of center, laid much of the foundation for the present socialistic housing program and still have not maintained the confidence of the people. Actually when the Labor Government came to power in 1945, they did not have to enact a single new piece of basic legislation to move into their present Government house-building program. The Conservatives and the Liberals had done the job for them not realizing its implications and scope. Small proprietorship and home ownership in England are rapidly losing ground. The rich, having been taxed practically all of their income, and facing current capital levies in addition to extreme inheritance duties—cannot pay for this Government activity in housing. So it is the working people, in the final analysis, who are paying all the taxes to provide the subsidies for Government construction of houses. And Britain, with all this, is still not getting houses in volume or at reasonable cost.
The land and the homes are rapidly becoming nationalized. With each succeeding month and year there is less proprietorship, less ownership of the land and of the homes, less opportunity for the young men, and less security for the old who have saved and bought a little piece of land to grow old on without depending on someone else. That has happened in a country whose institutions and traditions are the cornerstone upon which are built those we so proudly cherish in the United States of America. This tragedy witnesses to the effectiveness of the method of creeping socialism, and it illustrates the unfortunate fact of the harm that good men can do.
I respectfully make the suggestion to the Banking and Currency Committee of the House of Representatives : That a select committee of the House, primarily chosen from among the able members of this committee and the Appropriations Committee, be appointed to go to England and see what has happened there before we accept as permanent national policy an expanding program of Government-owned houses and apartments that involves the expenditure over a period of time of approximately $20,000,000,000. Mr. Egan has already said that it will take a year or a year and a half to get any of this housing, proposed in this measure, under way. Surely there is justification, under present circumstances, for another few weeks or months postponement of the decision, in order that the members of this committee may do their own fact finding in an experimental laboratory which the tragic story of England provides. I am convinced that if a select committee of Congress were in England and could see what has happened, could substantiate from their own, on-the-ground investigations the facts which I have presented here—that the swift spread of socialism and nationalization of the land in recent years was brought about with the same arguments and the same pressures which are being used to promote the Government-housing section of the measure before you today—they would agree that the United States of America wants no more of it.
In summary then we respect fully recommend :
1. That a select committee of the House of Representatives, chosen primarily from among the members of this committee, go to England to see first-hand the results of a prolonged and substantial Government housing program and that the Government housing section of this bill not be acted upon until the committee has had this opportunity to evaluate the results in England and determine if such a program would be in the best interest of our country.
2. That a workable slum land acquisition program be initiated immediately, with Federal grants and loans administered separately from the Government housing program. The present slum clearance provisions of the bill, prepared by the public housing agencies, will result in most of the cleared land's being converted to public housing use. By contrast we recommend that the program be administered by the Federal Works Agency on a basis similar to the Federal aid to highways. Such aid should be a direct, simple, dollar-matching procedure, with a bona fide local initiative and participation. We have already, on January 21, transmitted to the members of this committee a draft of a bill to effect this purpose.
3. That the housing research provisions of the bill, title III, be eliminated. Research activities should not be conducted and directed by those who have particular programs to advance, such as guaranty schemes or Government housing. The research activities in this busi
ness field, if they are to be expanded, should be expanded in the Construction Division of the Department of Commerce, the Bureau of the Census, and the Bureau of Standards where they are now conducted. A program of the type proposed in the language of the bill would lead, in our judgment, more to propaganda and pressure for Government housing than to a balanced and fair research undertaking which would recognize home ownership, the existing supply of housing and various ways and means by which we maintain and produce homes.
4. The question of a housing census is before the Congress and while this matter has been introduced separately and is before another committee, we take this opportunity to say that we would like to see the provision for the census expedited.
5. The declaration of national housing policy in this bill could commit the Congress and the administrative branch of government to general programs and objectives far beyond that which the Federal Government needs to go. We recommend that the statement of policy should be completely rewritten or omitted, because we do not think these objectives, broad as they are, can be obtained except in a completely controlled and planned economy.
6. We recommend that clear, definite income limits be established by statute with regard to the occupants of present Government housing projects. Certainly if the advocates of Government housing are sincere, they would be willing to eliminate all families from subsidized housing who have incomes in excess of $1,500.
7. At the time the United States Housing Act was under consideration we urged that no grants or subsidies be made available to any community that did not have adequate building codes, sanitary, fire, safety, and overcrowding ordinances, adequately administered. We recommend that if any Federal funds are to be used for the acquisition of slum land, that it is proper for the rules to be established as to municipal housekeeping property as a prerequisite to any Federal activities or grants.
Mr. Chairman, I want to thank you for letting me go through the statement without interruption. I have a manuscript in excess of 400 pages that I developed on British housing history and policy, and I tried to boil this thing down to 12 or 15 pages to summarize it for your benefit, and I will be very glad to answer any questions.
The CHAIRMAN. Thank you very much, Mr. Bodfish, for your contribution. You represent an organization which I think has done a great service to the American people. I know in my particular section of the country, the savings and loan associations have made the community largely one of home owners.
What has the British Government done with regard to slum clearance?
Mr. BODFISH. They have quite an extensive program of acquisition of land municipalities, with the municipality taking about half the cost and the central government taking the balance. They have acquired quite a bite of land that way. At the present time they are not engaging so much in the acquisition of slum land, Mr. Chairman, as they are in the building of decentralized or satellite towns. They are replanning much of England.
It is a tragic commentary that it took the bombs to clean out the slums of the West End of London, which probably were the worst in the world—if any of you were there, you will agree, I am
sure—but they are now planning new cities in which the industrial and business activities will be established in planned towns around them. They feel that in this era of potential atomic warfare that the big city of the size and type of London is not the ideal way of living, and probably is not a wise piece of military or defensive planning, so the principal acquisition of land at present, Mr. Chairman, is in new areas, where they expect to build whole new towns of municipally owned, governmentally owned housing, and so move the people out of the congested areas in the big cities to these new areas.
The CHAIRMAN. The central government pays half of the expense ?
Mr. BODFISH. That is true. But there is one more thing to that, Mr. Chairman. Under your redevelopment charge, the Government determines the price at which they will take the land, and that price seems to never approach what is a current market price. I had dinner last evening with Frank Taylor. He is a builder whom I have known for many years in England, a very responsible gentleman, who now is building in South Africa and on Long Island, because he has been primarily a residential builder in England. He indicated they had one piece of land involving about a hundred acres near a great city that they considered worth about £40,000, and the Government is taking it at something about £8,000. Probably that is an extreme example.
The CHAIRMAN. Are the cities restricted by their charters as to expenditures and tax rates as they are in the United States?
Mr. BODFISH. All the powers of British cities spring from legislation, parliamentary legislation. That is, there is not an intervening state such as we have. Most of our city powers come from state constitutions and state statutes. The Central Parliament in England determines the powers and responsibilities of the cities.
In the main, I do not recall that they are restricted as to taxation. They are restricted somewhat as to the amount of indebtedness they
The CHAIRMAN. Is there not a uniform law under which they all operate?
Mr. BODFISH. Practically, that is right.
The CHAIRMAN. Each one is not the result of a special act of the Parliament, is it?
Mr. BODFISH. That is generally true with the exception of London, which is dealt with separately, and then, if you know England at all, Scotland always has to have its things a little different, even though legislation is passed by Parliament. The CHAIRMAN. Are they restricted in their indebtedness? Mr. BODFISH. They are restricted somewhat in their bond issuance.
The CHAIRMAN. That seems to be the great trouble in the United States, that all the cities are restricted in their indebtedness, in their tax rate, and a good many of them are up to their limit now; therefore a great many of them are unable to make the contributions that would be necessary to do away with slums.
Mr. Bodfish. While I came from a small town, I am now a big city boy, and we send $3 down here for every dollar we get back in our area. That is probably why sometimes we come down wanting to get something back.
Mr. PATMAN. What was that?