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Mr. COLE. There will never be a place for them to move. Why would John Jones move out of this place when he has a lower rate than his neighbors? He will not move out, and the politicians of this country will not permit him to move.

Mr. FOLEY. Well, they are moving.
Mr. Cole. I realize some of them may.

In connection with the bill itself, is there a distinction between the criteria set up for those who may enter a low-rental property and a policy provision in section 2? For instance, I noticed the policy provides for adequate housing on page 3, for decent, safe, and sanitary housing. No, that is farm property. I want the urban. Where is that?

Mr. FOLEY. Do you mean 4 on page 3, line 23?

Mr. COLE. Yes. Now, if we turn to the provision with reference to the public housing on page 27, one of the criteria is that the family must live in an unsafe, insanitary, and overcrowded dwelling. Is there a distinction between those two criteria?

Mr. FOLEY. I would say there is a definite distinction between the two types of housing described. One is decent, safe, and sanitary, and the other is exactly the opposite. It seems to me there is only the strongest consistency between those two statements and the general policy proposed through this aid here proposed and as practiced under the limited programs of the past. Very definitely the policy, practice, and purpose is to try to further at least our progress toward the goal set forth on page 2, line 4, by taking families out of such unsafe, unsanitary, and what might be described as not decent housing and put them into such that will be.

Mr. COLE. Are they indecent homes?

Mr. FOLEY. It depends on what you mean by "indecent." They are not decent in the sense of not contributing to the dignity of a home and family.

Mr. COLE. I certainly know of some homes that are not decent, I am sure of that, but I do not know for sure what the word means, with reference to an administrative situation. You have two families living side by side, making application for this home. You may be able to admit one. I was trying to determine how an administrator might decide that one family was living in a more decent home than the other.

Mr. EGAN. Mr. Cole, that can be determined by a method of scoring housing need. In other words, you take the families from the worst curroundings, as far as the physical condition of the structure is concerned, the sanitary condition, and so forth. You score their need and determine that the conditions from which one family comes are worse than those of another family who, although in a bad situation, might not be quite as bad as the first family.

Mr. COLE. Are all of those decisions made upon view of the premise or are they made as a result of written application to show the condition of the home in which the applicant lives?

Mr. Egan. In the past they have been made by actual examination of the home from which the family came.

Mr. COLE. What sort of record is kept in the local housing authority's office?

Mr. Egan. The local housing authority has a sort of check list of the things they look for in any of these homes in which they have families who have applied. They go back and check the condition of the homes of the families that they have on their check list. In other words, let us say that a family has no private toilet facilities. That is one of the things to indicate he is coming from a pretty bad place. They will go back and check that. They will check the structural condition of the building. Also, they will determine whether there is running water in the building or not. There is a series of things used to determine what is the real condition of the home from which the family is applying.

Mr. COLE. In these criteria listed here, are any given preference over the other? By that I mean if a family lives in an unsafe home, is he given preference over one who may live in a safe but unsanitary home?

Mr. Egan. I do not know how finely they go into that. I think certainly if the home that the family was living in was about to collapse, I would think that would be a serious thing and one of those serious situations that would have to be corrected, and, therefore, they would consider that family one which should be moved into the new project perhaps rather than one who did not have a private toilet. If it is a case of hazard to life and limb we have to move the family out pretty quickly.

Mr. COLE. An unsafe but decent home?
Mr. EGAN. That is right.

Mr. COLE. In connection with the maximum income of families, I have a little trouble with that. I notice they are fixed locally and any maximum that the local board may determine, approved by the Expediter, is the maximum family income, in order that you may meet different economic situations in different parts of the country.

Mr. Egan. The local authority makes the determination as to what is the maximum income for admission and for continued occupancy, and they have to have that approved by the Public Housing Administration and not the Housing Expediter. Whatever their determinations are have to be reviewed by us to see if they are realistic.

Mr. COLE. I noticed in the statement the words “maximum net income” were used by either you or Mr. Foley. Is there any significance to the words “net income”?

Mr. Egan. There is. The United States Housing Act of 1937 uses the term “net family income.” That means there are some of their earnings that might not be considered income. For example, if a tenant in one of these projects is forced to buy a uniform in order to get a job, we deduct that.

Mr. Cole. It is on the order of the deduction in the income tax?
Mr. EGAN. Yes.
Mr. COLE. Do you have regulations on the deductions?
Mr. Egan. We have them distinctly spelled out.
Mr. COLE. Could you submit that!
Mr. EGAN. Yes.
(The information referred to is as follows:)

The “requirements” of the Public Housing Administration include the following definition of “net family income”: Net family income

Net family income shall mean aggregate family income es defined below less deductions therefrom as also specified below.

Aggregate family income

(1) Aggregate family income shall include the following income, before any deductions, received by all members of the family who actually occupy or are actually to occupy the dwelling:

(a) Wages and salaries (including compensation for overtime), and all other earnings and compensation for personal services, such as commissions, fees, tips, etc., including the cash value of any compensation in kind, such as meals or food. Aggregate income includes the full amount of earnings before pay-roll deductions are made for any purpose.

(6) Net profits from the operation of a business or profession.

(c) The full amount received from pensions, annuities, retirement income, and other similar types of periodic receipts.

(d) Payments in lieu of earnings, such as unemployment compensation, other social-security benefits, dismissal wages, benefits in lieu of earnings other than lump-sum payments under health and accident insurance, and workmen's compensation other than lump-sum payments.

(e) Cash relief receipts and the value of determinable relief allowances in kind.

(1) Periodic and determinable allowances, alimony, contributions, and gifts.

(9) Interest, dividends, and net earnings of any kind from real or personal property. (2) The following types of receipts are excluded from aggregate income.

(a) Amounts which are specifically received for, or are a reimbursement of the costs of illness or medical care.

(b) Casual and irregular gifts.
(c) Casual and sporadic earnings of minor children.

(d) Income from boarders and lodgers (since such income will not be realizable after admission to a public-housing project).

(e) Lump-sum additions to family assets, such as inheritances, insurance payments, capital gains, and settlements for personal or property damages. (If such sums are substantial, the exclusion of the families in question will be considered in connection with ineligibility because of the amount of capital

assets.) Deductions from aggregate family income

(1) The following items shall be deducted from aggregate family income to determine net family income:

(a) Special occupational expenses necessary to employment and for which no reimbursement is made by the employer, but only to the extent by which such expenses exceed normal and usual expenses (e. g. noonday meals and transportation to work) incident to employment.

(b) Deductions from wages for social security, for pension or retirement funds, or for health, accident, or medical benefit plans, if required by law or required by the employer as a condition of employment.

(c) Amounts actually paid, if reasonable and necessary, for the support of a person or persons not residing with the family but for whose support one or more members of the family are legally or morally responsible; but not including expense incurred for the support of children away from home for purposes of normal and voluntary education.

(d) Amounts actually paid, if reasonable and necessary, for the care of children or aged or incapacitated family members in order to permit the

employment of a sole worker. (2) The following items shall not be considered as allowable deductions: Payroll deductions for income tax, pay-roll deductions not required by the employer as a condition of employment for pensions or other benefits, payments for war bonds, group health, group or other insurance, bills and garnishments, installment purchases, repayment of loans, or interest and finance charges on such items.

Mr. COLE. What are some of the maximum allowances for net income in some of the cities?

Mr. Egan. In New York City the income limit for admission for an average sized family is $2,400, while for continued occupancy it is $3,000 and that is for families with less than three minor dependents.

Mr. COLE. I had the impression that there were some maximum figures at $5,900. Where did I get that? It sounds a little high to me.

Mr. FOLEY. It sounds very high to me.
Mr. COLE. There is none of that type?
Mr. EGAN. No.
I can give you the figures from page 5 of my statement.
Mr. COLE. I saw that.
Mr. BUCHANAN. Will the gentleman yield for a question !
Mr. COLE. Yes.
Mr. BUCHANAN. That differs by areas, does it not?
Mr. EGAN. Yes, definitely.

Mr. COLE. Then, there are none, as far as you know, above the $3,300 figure?

Mr. EGAN. I know of none above that. I think New York is the highest.

Mr. COLE. Mr. Egan, another thing that concerns me vitally in this is that we really have no means' by which we insist that the locality, the municipality, do a job locally before they come to Washington. Why should we not write into this bill and spell out certain things that are necessary, certain basic, fundamental things that each locality should do before they come down here and say, “We cannot do the job. Private enterprise cannot do the job. We cannot do it locally, and, therefore, we need Federal money." I am thoroughly convinced that that situation is not true, that the mayors of these cities who come down here—it is easier for them to come to Washington than to settle the problem. It is not an easy problem at home, I know that. But I do think that hundreds of them do nothing about it. Frankly, the real estate boards do nothing about it on both sides of this. The CIO does nothing about this, on all sides of it. Why should we not write into the bill certain basic standards of activity locally before they come to Washington?

Mr. EGAN. What do you suggest, Mr. Cole?

Mr. COLE. There are a number of things I would suggest. I would suggest that they have and enforce local regulations concerning fire hazards. Let us take the Baltimore situation. Everybody uses that. That is one where they enforce regulations which prohibit the continuation of fire traps and slum properties. That is one.

Mr. PATMAN. May I ask a question there, Mr. Cole?
Mr. COLE. Yes.

Mr. PATMAN. What would you do with the families? They must live somewhere. They must have a place to stay, and the only place they have to stay is a firetrap. If they tear it down, where will the family go?

M. COLE. In Baltimore they have handled it very nicely. Many of them have stayed right in the same places, and they have taken care of them.

Mr. Patman. You mean the city went ahead and repaired the building?

Mr. COLE. No; they require the home owners to do it.

That is not an answer to this problem. I do not mean that, but I mean that there are certain things each city can do to assist. I do not mean it is an answer to the whole problem, but I mean it is an approach.

The committee and the boards of the city council, in cooperation with private enterprise, can attempt to determine whether it is possible to do this job locally. I do not have any definite plan on that, but there are many things they can do.

Rochester, N. Y., I believe, is doing something along that line. I think there are a dozen or so things which a city can do first before they come here. I was wondering why we did not make more stringent requirements than just a showing of a bad problem at home that they say do nothing about.

Mr. FOLEY. I think what you are talking about, if I understand it correctly, is already contemplated in actual policy and I think contemplated in the statement of policy in this bill in the last sentence beginning on line 16 at page 3. Surely we in the Housing Agency do not contend, and I think none of the committees of Congress have contended or would now contend, that the Federal Government should relieve the local community of responsibility and of the duty of exerting every resource they have to improve the housing situation. As a matter of fact, we talked very much in our testimony here and elsewhere of local responsibility. That is not local responsibility only in connection with public housing projects, it is local responsibility in connection with the whole of the housing problem. The language generally of the Declaration of National Housing Policy specifically contemplates, in essence, exactly what you are talking about. Whether certain specific things could properly be required to be done by every community in the country by law, I think that would need a lot of examination.

Mr. COLE. I think so, too, Mr. Foley, but I am not satisfied, after hearing testimony on this last year, that the cities have done the job. I do not necessarily mean just the municipalities, I think the people there, the real estate board, the CIO, and everyone interested in it could do a better job. I think I could present to this committee some ideas which could be written into law.

Mr. McMILLEN. Will the gentleman yield ?
Mr. COLE. I yield.

Mr. MILLEN. Is any allowance or refund contemplated for those States and those municipalities which have been forward looking on this problem of public housing and slum clearance and have passed laws and raised money from the taxpayers in providing public housing in slum clearance, in cases you are familiar with, particularly in the city of Chicago, in Massachusetts, and New York, in view of the fact that other States lave refused and delayed any legislation in contemplation of what is provided for in this bill, of having the Government pay an undue share in comparison with those places I mentioned, which have raised millions of dollars as they have in Chicago by bond issues and so forth. The State of Illinois has raised a lot of money providing contributions for things provided for in this bill.

Is there any leveling off contemplated between the State of Illinois, for example, and several other States, many of them, in the funds that have already been provided by these forward-looking States?

Mr. Foley. I think this bill permits us to reimburse those cities for the projects that were deferred under contracts with us because of cost limits and where the relief came under cost limits from the enactment of Public Law 301

Mr. McMillen. Is there such a provision in this bill?

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