venience and comfort of its residents and to maintain the character of a pleasant residential neighborhood for the life of the development. Contrary to the usual haphazard growth and premature decline of neighborhoods in Detroit, it embodies all modern principles of site design and neighborhood planning to make it an ideal place in which to live and raise a family.

Location. The city's largest park system, extending for miles to the north and south of the development, is the western border of the site. Within easy walking distance are the playing fields, picnic grounds, and unspoiled countryside which other Detroiters must drive miles to find.

Schools.-The Don Hubert Elementary School is located just north of the site, and the board of education's next year's building program includes construction of a new school, the Healy School, one block south of the site. The Hubert School has a capacity of 1,040 pupils, but as of June 1949 had an enrollment of only 715. Approximately 1 mile to the east is Stoepel Park, the site of a proposed intermediate school. Redford High School is 2 miles to the northeast.

Transportation.-Bus service is available on Schoolcraft connecting with Grand River and other lines. Grand River will ultimately be developed as an expressway. The Lodge Expressway, which is already under construction, will connect with Schoolcraft at Grand River, and eventually Schoolcraft will also be developed as an expressway. Schoolcraft Gardens is a half mile east of Telegraph Road and within ready access to the main arterial highways in the general area.

Shopping.-A major neighborhood shopping center is now located at Fenkell and Outer Drive, and the Redford business center, one of the largest in the city, is 2 miles from the development. A local shopping center providing for the everyday needs of the residents, such as a supermarket, a drug store, dry cleaning and shoe repair services, etc., is included in the plans of the development. Stores and parking facilities will be screened by suitable planting and lawns from the nearby residences. Space is also set aside on the site for a clinic, a nursery school, a meeting hall, and other community buildings.

Site planning.-Schoolcraft Gardens contains over 70 acres of land, which are divided into superblocks having short dead-end lanes and garage courts and parking areas. There are no through traffic streets within the entire development. Walkways are so arranged as to give access to the shopping center, grade school, and playgrounds within the development with a minimum number of street crossings. Ample playgrounds are provided for small children. In addition, there is easy access to the extensive park areas bounding the site.

Protection against encroachment. The nature of the location of Schoolcraft Gardens, and the large size of the development itself, effectively insure it against premature deterioration and blight, which so frequently occur in residential neighborhoods. Freedom from traffic, dirt, noise, and adjacent industrial uses removes almost all the usual hazards which lead to a neighborhood's becoming undesirable long before the homes in it are structurally outworn or the mortgage paid off.

Privacy. A feature of Schoolcraft Gardens is the absence of crowding. The number of homes per acre is less than half as many as permitted under zoning regulations and currently being built by speculative builders. Maximum privacy is afforded residents by careful planning and the ample grounds between buildings. Freedom from dirt and noise.-Generally the dwellings do not face the street. Houses are free from dirt, noise, and gasoline odors. As they will be automatically heated with gas, the air will be free from smoke and soot. The parks which surround the development, and the absence of any industrial plants close by, assure additional protection.

Off-street parking. Each dwelling unit is provided with one off-street parking space, either in a garage or in a parking compound located within easy access to it, leaving the streets free for visitor parking.

Community buildings.—It is proposed to erect a community building upon completion of the dwelling units. It will house the management office and such lecture halls, meeting rooms, hobby rooms, preschool play centers, and other facilities as may be desired by the families living in the cooperative.

Schoolcraft Gardens-Your cooperative

Housing cooperatives are not new in the United States, but it was not until August 1948 that Congress passed a law giving them the same kind of mortgage insurance provisions enjoyed by speculative builders. Cooperative home ownership combines the security of tenure given by home ownership with the mobility of tenancy enjoyed by renters. Each resident of Schoolcraft Gardens is both a landlord and a tenant: as a landlord he owns his share of the entire corporation,

and as a tenant he is responsible to the group for the care and maintenance of the dwelling unit he occupies.

The cooperative feature of the development, with the entire property kept in single ownership, makes possible planning for the total site instead of for the typical subdivision lot characteristic of the individually owned home. As a result the designers are free to apply modern principles of neighborhood planning without being subject to the narrow physical restrictions imposed by the usual gridiron pattern.

Mobility. When a family grows larger or smaller, arrangements can be made to shift to another dwelling unit of suitable size and type. Such a change does not involve disposing of one's home, paying a commission to an agent, and possibly having to move to another neighborhood.

Stability. The character of the neighborhood is maintained by the fact that the cooperative continues even though the individual may have to move from the development. The interest of each member in the appearance of his home, together with the standards maintained by the cooperative's management with regard to the maintenance of all public areas and the exteriors of all buildings, will prevent the setting in of deterioration.

Resale. In case a member needs or wishes to move from the development, he may sell his shares. However, the cooperative has first option to buy back the shares and resell them to a prospective member on the waiting list. In this way a member can dispose of his interest without having to pay a broker's commission, which usually amounts to at least 5 percent of the total price of the house. The member selling his shares will in general receive an amount equal to his original investment, plus his accumulated equity less depreciation, adjusted in accordance with the bylaws of the cooperative.

In the event that the cooperative does not exercise its option to purchase the equity, the member may then sell his interest to any purchaser subject to the rules of the corporation.

Management.-Schoolcraft Gardens will be managed by a board of directors chosen by the residents for a definite term. Each resident family has one vote. The board will determine general policies, in accordance with the bylaws of the corporation. It will appoint a manager who will be responsible for the management of the development. Appropriate committees of the corporation, such as admissions, buildings, and grounds, community activities, etc., will assist the manager in an advisory capacity.

Future development.-The first section of 64 dwelling units will be a separate corporation for mortgage purposes, as will subsequent sections of the total 500-family development. As these sections are completed, it is contemplated they will be tied together into one over-all corporation. In the meantime, option on the land not yet built upon will be held by a board of trustees composed of (1) representatives of the completed section or sections of the development, (2) the sponsoring board of the Detroit Cooperative Housing Association, and (3) the owners of the land. This board of trustees will be responsible for the formation of the subsequent corporations which will build the later sections of the development in much the same manner as it sponsored the formation of the first section of 64 units.

Eligibility for membership in Detroit Cooperative Honsing Association.—Membership in the Detroit Cooperative Housing Association is open to any family on payment of a $5 registration fee. Members are entitled to receive copies of bulletins and reports issued by the association and to be kept informed of its progress and activities, and are eligible to apply for membership in Schoolcraft Gardens Cooperative.

Eligibility for membership in Schoolcraft Gardens Cooperative. The incorporators of Schoolcraft Gardens have elected a temporary board of directors to serve until such a time as all 64 families have subscribed to and paid in the necessary share capital to erect the development. In passing upon applications for admission, the board of directors will attempt to enroll a fair cross section of the general population, so as to insure a variety of interests as well as the financial stability of the corporation. Members will share a mutual interest in establishing a neighborhood based on their common efforts.

Applicants for membership in Schoolcraft Gardens and for occupancy of one of the dwelling units in the development are required to pay a membership fee of $100 to defray the costs of organizing the cooperative and the processing of their applications.

Cancellation or rejection of applications. If a member cancels his application for occupancy prior to having been accepted, or if his application is rejected, he

shall be repaid the membership fee of $100 less a reasonable sum to reimburse the cooperative for the costs incurred in processing his application.

Subscription of share capital.-Upon acceptance of his application, an applicant selects a specific dwelling unit and subscribes to the amount of share capital required to finance that unit. The amount of share capital varies with the size and location of the dwelling, and amounts to approximately $300 a room. Share capital is payable in advance of the beginning of construction, and, when paid in, is not ordinarily refundable during the period of construction. Transfer of a family's interest can, however, be made to another family acceptable to the board of directors.

Rights and obligations of residents. Although the title to the land and buildings is held by the corporation, the individual members through ownership and control of the corporation enjoy the same rights and duties as those enjoyed by any other home owner.

Residents receive a lease giving them exclusive possession of their dwellings for a specified number of years, subject to automatic renewal except upon failure to conform to the rules of the cooperative. Residents are responsible for the proper care and maintenance of their dwellings. The corporation is responsible for exterior maintenance of the structure, including exterior painting, the repair and replacement of roofs, gutters, downspouts, and other sheet metal, and for the common walks, open spaces, and play areas.

Monthly payments.-Monthly payments will be specified in the lease and will cover payments on the principal, interest, taxes, insurance, management, and exterior maintenance. Amortization is set up on the basis of equal annual payments on principal and declining interest as the unpaid balance decreases. This means that the monthly payments decline year by year, although if the membership so decides, it is possible to keep them at their original level and pay off the mortgage in a shorter period instead of the maximum of 40 years for which it is written. Reserves. Subscription of stock, and monthly payments, have been so set up as to build up for each family a reserve which can be drawn upon in case of unfavorable economic conditions or personal misfortune. The reserve is credited to each family individually and is payable to that family if it moves from the development. Financing. Financing is being arranged through FHA-insured mortgage bearing 4 percent interest and running for a maximum of 40 years. The mortgage, as being written, is flexible enough to allow for considerable leeway in prepayments so as to build up reserves and pay off the indebtedness in a shorter time.

How you save in Schoolcraft Gardens

Residents of Schoolcraft Gardens Cooperative will save money in many ways. Here are some of them:

No extra moving-in costs.-Your down payment covers mortgage and closing costs, landscaping, and screens. In ordinary financing, you would have to spend approximately $515 for these items in addition to your down payment.

Lower interest rate. Our mortgage is written at 4 percent instead of the 41⁄2 percent at which individual mortgages are set up. In the case of a 40-year $9,000 mortgage, this means a saving of $900, or 10 percent of the cost of the house.

More space. You get, dollar for dollar, about 10 percent more floor space in Schoolcraft Gardens than in a typical home available on the open market. Thus, a two-bedroom terrace or apartment in the development is priced at $9,900 and contains 1,000 square feet of floor space, while a typical brick veneer two-bedroom bungalow offered by a well-known Detroit builder at $9,900 contains only 900 square feet.

Extra equipment.—In Schoolcraft Gardens you get an automatic gas-fired furnace, double-pane insulating glass in south living-room windows, a garbagedisposal unit in your sink, and an incinerator. If you installed these yourself, you would have to pay approximately $435 for them.

No commissions or brokers' fees.—If you move from Schoolcraft Gardens, you merely sell your share certificate in the corporation, not your home. You need pay no commission, which amounts to at least 5 percent, or $500, on a $10,000 house.

Lower depreciation.—Because Schoolcraft Gardens is a completely planned neighborhood and is permanently protected from traffic, smoke, and other blighting factors, the depreciation in the value of your home will be less than in ordinary subdivisions. This means that you will stand to realize a larger proportion of your equity, should you have to leave, than if you owned a home in an ordinary development. Your home and your neighborhood—will remain desirable for many years to come.

Reduction of income tax.-Families in Schoolcraft Gardens enjoy the same allowances on their Federal income tax as do owners of individual homes. The amount paid for interest and taxes on a home is deductible from gross income (unless the short-form, automatic deduction is used). During the first few years, interest and taxes aniount to approximately $450 per year for a one-bedroom unit, $525 for a two-bedroom home, and $600 for a three-bedroom unit, and result in actual reduction in annual income tax of 20 percent, 25 percent, or more of these amounts, depending on the surtax bracket in which the family's income falls.

Comparison between Schoolcraft Gardens and house offered for sale in typical real-estate development

Items included in Schoolcraft Terrace but not included in typical builder's house:

Cooperative

June 6, 1949)

1,000

900

(1)

(1)

$9,800

$9,900

100

9,900

9,900

1,200

1,700

NOTE. No allowance is made in the above comparison for Schoolcraft Gardens' neighborhood amenities, better planning and design, and superior workmanship and equipment.

Estimated cost of dwelling units and suggested schedule of monthly charges (as of

June 1, 1949)

The above schedule, if used for the first 2 years' occupancy, plus other contemplated savings and added to provisions set up in the mortgage terms, will provide for cash reserves that will average about $500 per family at the end of that time. By using these reserves to prepay the mortgage, a cushion will be provided to help the group meet economic reverses, and the monthly costs can be reduced approximately as follows:

These payments can be further reduced each year as the unpaid principal declines, or they can be held at this level to accelerate paying off the mortgage, depending on the wishes of the membership.

The above charges do not include heat, light, or other utilities. Where such added services are required, as in centrally heated apartments, they will be charged for on a pro rata basis.

There may be a few special units-two-bedroom end apartments, for example— for which costs have not yet been determined. Garages will cost approximately

$400 each and will require $100 cash and $2.50 per month.

All savings below these figures which may result from declining construction costs or lower operating costs than anticipated, can be added to the reserves, used to repay the mortgage, or otherwise disposed of according to the desires of the membership.

Senator SPARKMAN. We had one other witness listed, Mr. Isadore Blumberg, who sent word from New York saying that he would not be able to be here.

The committee will therefore stand in recess until 10 o'clock, Monday, January 16, 1950.

(Whereupon, at 1:10 p. m., the hearing in the above-entitled matter was recessed until 10 a. m., Monday, January 16, 1950.)