applicants are ex-servicemen. Work was already in progress on two of the homesteads at the time they were visited. Oakwood community, Chapel Hill, N. C.

The project at Chapel Hill was directed by the Service Employees Corp., a private organization whose stockholders were keymen in the business organization of the University of North Carolina. Membership in the housing group was limited to employees in the university service plants and the university auxiliary enterprises which serve the community and the town of Chapel Hill (water department, telephone exchange, etc.).

The housing scheme was launched in 1940. Members were to work together under a foreman selected by themselves. A 40-acre tract of land was obtained for $2,200 and lots were prices at $210 each. Under the plan the amount to be expended on materials was limited to $2,000 per house and no loan could exceed two and one-half times the borrower's annual income or a maximum of $4,500. Considerable savings resulted from low architect fees, and wholesale purchases of fixtures and materials. Furthermore, all of the road building, clearing, grading, and basement and septic-tank excavation was done by the participating members as well as the painting, electric wiring, and installation of the plumbing and heating system. Labor accounts were kept in terms of hours worked.

The project of 14 houses was financed from funds of the Service Employees Corp. and by loans from an insurance company and by FHA insurance. The cost ranged from $2,750 to $5,000. The labor cost of the typical house averaged about $1,200, of which the personal labor of the members accounted for about $500. A 10-percent down payment was required with initial monthly charges on a typical house averaging $23.34.

Iona Self-Help Cooperative, Iona, Idaho

To fulfill an urgent need for habitable living quarters for amounts which they could afford, 15 families in Iona, Idaho, (later joined by six others) undertook a self-help housing project in 1934. A small revolving fund was obtained from the State-Federal self-help program in effect at that time, and this has been used to make loans to members for housing purvoses.

In order to receive a loan, the member is required to own a plot of land with title clear. Upon fulfilling this requirement, he may receive a cash lo n of not to exceed $500 plus a "labor loan" consisting of part-time assistance by this fellow members in building his house. The lot is accepted as security for the loan.

The labor loan must be repaid by the borrower in labor on the houses of the other members, and the cash loan is paid over a period of from 2 to 5 years. Payments range from $3 to $10 per month, which is generally less than the amount previously paid in rent. When the loan is paid and the labor claims satisfied, the borrower receives title to the property. Generally, three loans are necessary to provide for the construction of a complete house.

Thus in a period of 6 to 10 years the family was enabled to pay for a house worth some $2,000 to $2,500 without owing more than $400 to $500 in cash at any one time or paying more than $12 in interest in any year. The exchange of labor accounted for a very great reduction in the cash lay-out otherwise necessary. From the start the housing project was successful and made earnings. In the first six years of operation, the revolving fund grew from $1,650 to $3,000. Although the fund provided sufficient money to finance the participating group, one of the leaders pointed out "if there had been more in the fund, we could have touched more people."

OTHER JOINT HOUSING PROJECTS SPONSORED BY COOPERATIVE

HOUSING ASSOCIATIONS

Crestwood Community, Madison, Wis.

Present

Crestwood is the housing development sponsored by the Wisconsin Cooperative Housing Association in Madison. The original group that planned the housing project in 1936 consisted of persons employed in the various State offices. membership includes not only State employees but also Federal employees, members of the State university faculty, a few local businessmen, and some returned

veterans.

Actual construction of the houses did not begin until 1938. In the interval a tract of 75 acres of land (space for 200 dwelling units) was acquired in a convenient suburb, and plans were drawn up for a large-scale development of houses which would be owned by the association and leased to the individual members. After long negotiations with FHA, the association changed its original plan and pro

vided for individual ownership of both lots and houses. Finally construction plans for 20 houses were approved by FHA, and building operations began in August 1938.

The achievements of the cooperative association have been the following: (1) The purchase and plotting of the tract, (2) the financing and installation of a water and sewer system, (3) the creation of a sanitary district, (4) the furnishing of architectural service, (5) the supplying of title insurance for members, and (6) the building of a small number of houses. All but three of the houses were constructed by individual contract and the association has no control over them except to pass upon the general style of architecture, to see that the cost does not fall below the minimum of $3,000, and to pass upon the acceptability of purchasers. Should the association not exercise its option, no controls are imposed as to sale price.

SPONSORED BY LABOR ORGANIZATIONS

Carl Mackley Apartments, Philadelphia, Pa.

The Carl Mackley Apartments, Philadelphia, constituted the first housing project undertaken in 1934 by the Public Works Administration as part of its employment program. The project was planned and sponsored by the American Federation of Hosiery Workers (CIO), with the purpose of providing suitable housing for its members, many of whom were living under substandard conditions. The union exchanged a piece of land owned by it in the downtown section for one of 42 acres (valued at $85,000) in the Frankford district. A 35-year 4-percent Federal loan of $1,039,000 was obtained, and additional funds were supplied by the union, by a public-spirited friend, and by other individuals. A limiteddividend corporation, the Juniata Park Housing Corp., was formed which supervised the construction and still holds ownership and management of the project. In this project the resident never becomes the owner of either his apartment or of equivalent stock in the association. For as long as he remains in the project, he is a renter only.

The

When vacancies occur in the project, preference is given to union hosiery workers, other unionized industrial workers, and other industrial workers, in the order named. Although textile workers form the largest group in the present population of the houses, many other occupations are represented, including both manual and white-collar workers. Families with children are preferred. general requirement is that the monthly family income should not be less than three times nor more than five times the monthly rent of the apartment desired. The project has suffered from the effects of two early financial assumptions that proved to be mistaken: (1) The total cost of construction proved to be some $200,000 more than had been anticipated (because of this, certain planned features had to be either eliminated or curtailed); and (2) at the time the project was started, it was expected that legislation would provide tax exemption for a certain period (as is the case under the New York housing law for limited-dividend corporations). Rentals were set accordingly. For 3 years, expecting such legislation, the corporation paid no real-estate taxes. At the end of that time, taxes were due for the whole 3-year period, amounting to some $20,000 on an assessed valuation of $660,000. The corporation has kept up its interest payments on its Government loan, and part of its amortization. Neither the union (which, apart from the Government, is the heaviest stockholder in the corporation) nor any of the other investors has received any interest.

Stonewall Heights, Front Royal, Va.

In view of the acute housing situation in Front Royal during World War II which was aggravated by the extension of a large viscose plant, the local union of the United Textile Workers (CIO) formed a housing committee to see what could be done about the situation. The first step was the construction of a sample house. A tentative goal of $5,000 for house and lot was set, but the final actual cost was $7,800. In the belief that a considerable element in this high cost was the fact of its being a single unit, the union decided to undertake a large-scale housing construction project. A tract of farm land was purchased and plans were drawn for a new community. The plans provided for 158 units, but only 50 units were actually undertaken. By August 1946 all 50 homes were completed. An unusual number of difficulties were encountered by the group. The first was the inability of the local union to hold title to real estate under Virginia law. As a result of union efforts, an amendment was obtained which removed this disability. Also, the union found it necessary through its regular stock corporation, the Old Dominion Housing Corp., to act as its own contractor because of

There

the inability to obtain a suitable arrangement with a private contractor. was also delay before approval of the local planning commission could be obtained. A further problem was that since the land purchased for the site was outside the corporate limits of Front Royal the corporation had to build connections-an operation which added at least $1,000 to the cost of each house. Sharp price rises and delays in obtaining supplies and equipment produced problems. Not the least of the many difficulties was the problem of financing. Several of the leaders contributed all their savings, local unionists advanced funds, the local unions in Roanoke, Parkersburg, and Front Royal made loans out of the union treasuries, and the national union also helped. Finally a loan was made through a local bank. Nevertheless, funds were barely sufficient to cover operations.

The first few houses completed were built for $5,000 and $6,000, the next 30 cost nearly $7,000 each, and the final lot about $8,000. No profit was involved at any stage. The total costs were averaged and for the whole group of 50 houses, the purchase price was set at $6,050. The purchaser was required to make a down payment of $650 (which includes settlement costs of $114) and monthly payments of $33.68 over a period of about 25 years.

It is pointed out that, because of the nonprofit feature of the project, dwellings of comparable size and construction could not be found elsewhere for less than $8,500 to $9,500. Actually, the report made to the union membership notes, the $6,050 charged does not entirely cover the true cost (about $7,800, because of the sharply rising prices). The difference was covered from amounts realized from the sale of surplus land not needed for the project.

OTHER SPONSORSHIP

Garden Homes Co., Milwaukee, Wis.

An experiment carried out in Milwaukee under the leadership of the mayor, some 20 years ago, is of interest here, in that it provided a method of financing probably unique in this country, although it has been fairly common in Europe. Briefly, the plan provided for participation by cities and counties through their investment in the preferred stock of a housing enterprise. Subscription for such stock was also open to other organizations and to individuals. The preferred stock was retired as the tenant owners paid for common stock to replace it. The plan involved no public subsidy or expense to the taxpayers, for interest was paid in the meantime.

The original plan contemplated the erection of about 3,500 houses. Actually, only 105 were built, and as far as the Bureau's information goes, no further action has ever been taken. However, although the plan did not materialize on the scale that was contemplated and the cooperative feature of common ownership was dropped, the enabling legislation is still on the Wisconsin statute books. Building-guild experiment, Suffern, N. Y.

An assault on the high cost of home owning, through a system of building guilds, was carried on in several places in New York and New Jersey in the middle and late 1930's, using a plan worked out by Ralph Borsodi, economist, writer, and teacher. The experiment began in a small way about 1935.

Each homestead project involved four parties: The Independence Foundation, a homestead association, the individual homesteader, and a "building guild." The Independence Foundation was a nonprofit agency formed to sponsor, finance, and provide technical supervision and cost accounting for the various building projects. Its funds were raised through the public sale of its investment certificates (bearing 6 percent interest) and loans from banks, building and loan associations, and other agencies. It purchased land at acreage rates and subdivided it into plots large enough to provide space for subsistence gardening.

In connection with each project, a homestead association was formed by the foundation to purchase the land, over a period of years, from the foundation and hold it as a collective agency of the individual homesteaders, granting use of the land to them under a 99-year lease. The houses in the homestead project, on the other hand, were held in fee simple by the occupying homesteaders, and were constructed by an association of building-trades workers (guild) formed for the purpose.

The Independence Foundation was in existence for 3 years. During that time it lent, for land and dwellings, some $200,000. Under its auspices eight guilds were established and some 50 houses were built. The first project of 16 houses in Suffern, N. Y., was followed by others in West Nyack and Ossining, N. Y., Ringwood, N. J., and Feasterville, Pa. It ceased operations at the beginning of the

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war, when wartime restrictions on construction stopped all private building and when considerably higher earnings could be had by guild members, in war industries. On its demise, all of the projects except the Bryn Gwelyd Homesteads (Pennsylvania), reverted to the fee-simple plan of ownership of the land (the ownership of the houses had always been on that basis).

Mr. FOLEY. May I suggest that there is also an earlier report which contains additional material that you might want to call attention to? Senator MAYBANK. I think a remake of this might be of benefit to the Senators who wouldn't have time to read it all.

Senator SPARKMAN. The staff will analyze it and extract from it such parts as may be pertinent for the record.

Senator Cain?

Senator CAIN. If you will permit me a few questions, I would like to ask Mr. Foley one or two. This is my last afternoon on this committee, officially.

Mr. FOLEY. How fortunate I was to come today.

Senator CAIN. I seek to have a little more understanding of this proposal before I leave.

Mr. FOLEY. Yes.

Senator CAIN. These questions will evidence my sincere curiosity about where we seek to go.

Senator MAYBANK. May I add, since he has been such a faithful member of this committee, I feel certain the chairman will be glad to have him here at any time.

Senator CAIN. I appreciate that more than you know, Senator Maybank.

Senator SPARKMAN. We are going to miss Senator Cain from this committee. He has been a very diligent and useful member.

Senator CAIN. Senator Sparkman, I am grateful for those com

ments.

As I understand this bill, Mr. Foley, it is an operation extended to what is roughly defined as the "middle-income third." That is a correct premise; is it not?

Mr. FOLEY. That is correct; yes.

Senator CAIN. For the benefit of the record, what would you say are the upper and lower limits in dollars of that third?

Mr. FOLEY. I think, Senator, the best answer I can give is the table I have already provided to you, which covers in considerable detail and considerable break-down this question of yours.

Senator CAIN. For the benefit of the record, would you put in the upper and the lower dollar limits, as you conceive them to be, sir? Mr. FOLEY. That table shows, in the total picture, limits of from $2,654 to $4,247. The urban figure is the one I should quote. From $2,840 to $4,425.

Senator CAIN. Are those dollar limits pretty well taken care of in the definition of what a "middle-income group" family is, as defined in the bill? I can find that definition in the bill, but I do want to ask your views about it.

On page 28, subsection (c):

"Family of moderate income" shall mean any family of two or more persons within the estimated middle one-third, according to total money income from all sources, of all such families in the locality.

Unless we construe that these cooperative ventures are to be built in American municipalities in which the middle income is not very

high, we must conclude the middle-income group as included in this definition will certainly include a dollar figure of far higher than what you have suggested.

Mr. FOLEY. I am not at all sure that I understand your comment. Senator CAIN. You have said that in your opinion, looking for knowledge on this matter, that families we seek to help under this bill are those whose salaries generally will be from $2,600 to $4,200. Mr. FOLEY. $4,425 is the figure I gave.

Senator CAIN. Yes.

Mr. FOLEY. The definition contemplates that the range to come. within this definition would be found for the particular locality for which the project is proposed.

You see, there is a considerable difference, as you get higher in population.

Senator CAIN. Yes. I have not as yet had an opportunity to study those figures. I am inclined to suggest that there are a good many localities in which the cooperatives might be formed where the middleincome group has a total annual income far in excess of $4,400.

Mr. FOLEY. I see what you mean. In certain smaller areas where the characteristics of the people are such as classify them as high income?

Senator CAIN. Yes.

Mr. FOLEY. I think you would probably seldom find a situation that would include the total of the locality that would be defined here. I grant there may be exceptions.

Also, I suspect that in such locality you would probably find little impetus toward this kind of an enterprise. I may be wrong. Generally speaking, the locality considered in the definition would be large enough so that you would get a spread beyond that peculiar group of people.

Senator CAIN. Your estimate of the annual income, in my opinion, begins to define the definition included in the bill, because from any point of view that definition doesn't mean any such thing as from two thousand-odd dollars to $4,400.

I think it could mean a very great deal more than that. When you say that in those cities where the annual income is higher there would not be much inclination to go into the cooperative housing movement. I am not certain, I am merely offering that. I am thinking of a community where possibly the average income would be quite high, out of this bracket here.

In my knowledge of that particular community, I offered that suggestion.

During the several years I have been on this committee, and mixed up with the problem of the subsidized low-rent housing problem, I am reminded of the fact that it was generally construed that those establishments would only be built in our large metropolitan areas. The last time I looked at the break-down of figures since the last Congress, units of such housing around the country, I am not shocked, but I am interested in knowing they are going in the direction of communities where several years ago we didn't think they were going. Mr. FOLEY. May I comment on that, Senator?

Senator CAIN. Yes.

Mr. FOLEY. My recollection of the debates that I had a part in in the past years on that was rather the reverse. The contention