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000 a year, after the total of the authority had been used, and running for a maximum period of 40 years.

In farm housing, a total of $5,000,000. That is a total annual contribution of $1,500,000 at the maximum. That gives you the breakdowns in the three types of financing.

I would be glad to file this statement for the record.
The CHAIRMAN. It may be filed without objection.
(The paper referred to is as follows:)
Jarimum rates of financial commitments under H. R. 4009

(In millions of dollars]

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1 May be increased, within total authorization, at any time or times by the President by not to exceed in any fiscal year an additional $250,000,000.

2 This amount added to existing authorization of $800,000,000 and the total authorization placed on a revolving fund basis. 3 Subject to annual determination by the Congress within these limits.

* May be increased, within total authorization, at any time or times by the President by not to exceel in any fiscal year an additional $100,000,000.

5 May be increased, within total authorization, at any time or times by the President by not to exceed in any fiscal year an additional $80,000,000.

6 Any subsequent year. 7 The annual contributions authorized for low-rent public housing may be paid over a 40-year period. The $100,000,000 is the maximum amount which may be paid in any I year. Since the inception of the original program, the annual contributions actually paid have amounted to 58.5 percent of the maximum amounts which could be paid.

8 The contributions authorized for farm housing may be paid over a 10-year period.

Mr. BUCHANAN. Do you have any figures on total housing production in 1949 ?

Mr. Foley. I do not believe we have any final or official figures for the first quarter. We have some estimates I may be able to furnish you. January starts are 50,000 and February 46,000, and we do not have March. That would show the starts in January and February are somewhat below those of last year. The total starts of last year, as I recall the figures, is 930,000.

Mr. BUCHANAN. Is there a current shortage of building materials or labor at the present time?

Mr. Foley. I would say nothing that we could call serious or critical. The

year before last we had our worst situation in connection with shortage of materials. It was so critical that it was causing delays in construction with long periods of completion. That situation improved throughout last year and our monthly reports from the insuring offices of the Federal Housing Administration indicate there are

practically no places now in which there are shortages of materials suflicient to delay completion of construction materially. There are some spots in which there are what I would refer to as temporary shortages in some skills, but there is a very much improved situation.

Mr. BUCHANAN. There is nothing in the current building materials or labor picture that would affect the building and rehabilitation programs suggested here in the over-all parts of H. R. 4009 ?

Mr. FOLEY. This contemplates, of course, a program larger than we have achieved up to this time if we are going to serve the full need in the period that is contemplated. However, I do not believe there is presently anything in prospect in either the material or labor situation which indicates that attempting a program of the magnitude as we envision as necessary to complete the need in a reasonable time, would cause any serious dislocation. The productive capacity for materials seems to be demonstrated in an amount sufficient for these needs. The supply of skills in the labor market has been growing. The apprentice system is increasing in its enrollments and the situation, I think, is favorable.

Mr. BUCHANAN. The other questions I have would probably be directed to Mr. Egan.

I understand that the current average family income of those folks in the public housing units averages $1,884.

Mr. Egan. That is correct. Mr. BUCHANAN. What price for new housing or rent could a family afford to pay with an income of that average size?

Mr. EGAN. On the basis of the generally accepted rule that rent should represent about 20 percent of family income, it would be $30 a month, gross rent. I doubt such a family could afford to purchase a home costing more than about $3,600.

Mr. BUCHANAN. Would current building costs enable them to purchase their own home in a bracket of that level?

Mr. Egan. I do not see how it is possible, Mr. Buchanan.

Mr. BUCHANAN. How far up the income scale would you take them before they would be able to purchase their own home at current prices of housing that can be built for those families in that particular income level?

Mr. FOLEY. I might answer that question perhaps, Congressman. It would depend, of course, very much on where this family was located and what were the local situations with respect to cost. They vary rather widely geographically, particularly because of the different requirements due to climate.

The lower levels of what you might call the middle-income groups, say around $2,500 a year and upward. The family situation, the number of persons and other responsibilities that have to be undertaken would affect the situation very materially. But from 2 to 212 times the annual income as a purchase price would be something of a rule of number to be followed as the top, for safety. Therefore, if you took a $3,000 income, depending on location and depending upon other family obligations and responsibilities, the size of family, you might say from $6,000 to $7,500 would be the very top of practicability for purchase.

In a normal situation where we did not have a shortage, that kind of situation might be better served by existing housing than by new construction. If you get into a normal situation with the normal


vacancy ratio in what is commonly called a buyer's market, you are more liable to find the proper obsolescence and depreciation in old housing

Mr. BUCHANAN. What income groups would be able to reach the level of the ladder downward to income levels as apart from the bottom levels. The level that public housing is able to reach?

Mr. FOLEY. Are you speaking now of new construction, Congress Mr. BUCHANAN. Yes.

Mr. FOLEY. Again it varies very widely. We are conducting a great deal of activity this year as the Members of the Congress probably know, in an effort to bring about a movement throughout the industry to reduce costs and produce houses at a lower price.

There are houses that you might call adequate for the smaller family, two-bedroom houses, being produced now, new, in some parts of the country as low as around the $6.000 figure. They are not being produced everywhere and are not being produced in great quantity, but there are some hopeful indications that we will get more production in what we might call the modest price brackets during this and coming years than we have gotten since the war. That is about as good an answer as I can give you at this time on that question, I think, Congressman.

Mr. BUCHANAN. How do you look upon direct loans to those families in that particular income level, say, the income level of $2,400 to $3,600? Those who seemingly are not qualified for public housing and who are unable to purchase new housing that is being offered at present prices.

Mr. FOLEY. The whole question of direct loans, which is contained in a number of bills which I know have been introduced in Congress and on which we will undoubtedly be called to report to committees of Congress upon, is under study. We have not yet reached the point of filing reports upon them. I have come today at the request of the chairman to discuss particularly this bill and am not prepared to go into the details of other bills, but will be prepared at later hearings on that subject, if you wish.

We have in other legislation—I forget the number of the bill before this committee, but it is in Senate 712, which has been declared in accordance with the program at present, that has some provision for direct loans, but on a basis of the same philosophy as is contained in this bill for direct loans in the farm section. That specifies that they shall be made available if other sources of credit are not available, and I do not know whether the question you are putting to me, or the other bills that may embody your question approach it from exactly the same angle.

Mr. WOLCOTT. What encouragement is there in the bill for the construction of multiple dwellings in the large cities by private enterprise?

Mr. FOLEY. This bill does not contain provisions, outside of the research section, directly relating to private building operations. The specific proposals that the Administration has thus far made and supported in hearings in the other house on that subject are in another bill, Senate bill 712, and H. R. 1938, which make provision for the extension of the title 6 operation of the Federal Housing Administration. Temporary extension of that has already been granted, pending, I suppose, on one or another bill. The slum clearance title of this pend

ing bill would also help in getting private rental housing built on the cleared sites.

Mr. WOLCOTT. About how long would it take to get this program under way, until the time when you get some results?

Mr. FOLEY. You are referring to what title of the bill? Mr. WOLCOTT. Slum clearance and lower income housing. Mr. Foley. On the public housing provisions I would say that under this bill some of the deferred projects, which have been unable to go ahead under the old legislation because of the cost limitation, could probably be under way within a matter of some few or several months, is that correct, Mr. Egan?

Mr. EGAX. That is correct.

Mr. FOLEY. Other new projects coming up under the bill itself could be made ready by a number of cities which are more advanced in their plans possibly during the remainder of this year.

I do not think that the maximum rate of production could be reached short of perhaps a year or a year and a half.

Mr. EGAN. That is correct. Mr. FOLEY. Under the slum clearance program, which is a new program and for which there is not an existing organization and not an existing experience in terms of an operating program, we will have first the task, of course, of setting up regulations and setting up an organization. That probably will take longer to get under way in volume.

Mr. Wolcorr. In the cities that have not started any of these projects or that have not planned for them, it could perhaps be covered in a year and a half.

Mr. FOLEY. Do you mean on public housing, sir?

Mr. Egax. Mr. Wolcott, it may take a year or a year and a half, depending upon the particular local authorities in particular localities. As an example, for instance in the State of Massachusetts, there are now 106 new local authorities that we never did business with that are operating under the State program. They probably are well organized now to immediately move into a Federal program. There are other locations where, of course, that is not so. There are a lot of housing authorities which over the past 5 or 6 years have been doing nothing but operating projects and have no development staff or no

staff to really move a development program. Mr. WOLcorr. They have to acquire their sites, complete their plans and have them approved by you?

Mr. Egan. That is correct, Mr. Wolcott.

Mr. WOLcort. What is the situation with respect to your low-cost housing?

Mr. Egan. That is what I was talking about, Mr. Wolcott, the lowrent title.

Mr. WOLCOTT. How about the slum clearance?

Mr. FOLEY. Slum clearance would be under the office of the Administrator and as I pointed out that would probably take longer to get under way because that will require an entirely new organization. An organization has to be set up and so on. However, again, a number of cities are more advanced with plans on that and I would believe that in the course of the remainder of this year we could have begun

the operations, assuming, of course, that reasonably early passage comes about.

Mr. WOLCOTT. My point is what hope can we hold out under this bill for relief of the present housing shortage and when?

Mr. FOLEY. I would say that under the low-rent public housing provisions we would be able to reach, within a year and a half, probably, the maximum velocity contemplated in the program. That is 150,000 a year, unless increased by the President. Just when you could expect those projects to be completed, I would have to refer to Mr. Egan.

Mr. Egan. In the balance of this year we might get 50,000 units into construction. Your construction period might run anywhere from 6 months to a year, depending on the size of the project. Projects of 100 to 200 units would move to completion much earlier than the larger projects. I think that by acceleration we can reach a maximum of 150,000 units contemplated in this bill, per year.

Mr. WOLCOTT. That original 150,000 are projects already planned but which have been delayed because of the cost features?

Mr. Egan. That is correct. There are some 25,000 units in deferred contracts that could not proceed because of the present cost limits. That would be another additional 25,000 or 30,000 that could get under way during this calendar year.

Mr. WOLCOTT. What program have we before us that would bring about some immediate housing?

Mr. FOLEY. The immediate operations, of course, are those that are going forward in private enterprises and other legislative proposals redirected toward further assistance there.

Mr. WOLCOTT. What can Congress do now at this moment to accelerate the production of dwelling units?

Mr. FOLEY. I would say two things: One, pass 4009 as promptly as possible so the necessary preliminary delays can be gotten over with as soon as possible, and such legislation as is included in H. R. 1938, which is also in accord with the program of the President.

Mr. WOLCOTT. H. R. 1938 ?

Mr. FOLEY. That is the parallel bill which contains amendments with regard to the National Housing Act and the secondary marked in the FNMA.

Mr. WOLCOTT. Why should we have first to get the maximum production in housing? Which is more important, this bill or 1938?

Mr. FOLEY. I think H. R. 4009 is more important because the provisions in S. 712 and H. R. 1938 are simply additions and refinements to things we now have in operation. We think it will be improved and we think they will be helped by them and we think it will accelerate production under them, but we have those fundamentals that work now. We do not have these in H. R. 4009.

Mr. Wolcott. We should be trying to find means of licking the present housing emergency as quickly as possible. Now what is impeding it?

Mr. FOLEY. What has been impeding it most importantly, Mr. Wolcott, has been the high production of housing.

Mr. WOLCOTT. How can we overcome that through legislation except by subsidies!

Mr. Foley. I think the provisions of H. R. 4009, with regard particularly to research, are extremely important, and the sooner we can

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