increase than income for white families in occupancy, reflecting, again, the change in characteristics of white families.

The median annual income of families in public housing occupancy between 1952 and 1961 increased by only 13 per cent from $2124 to $2406. The gross monthly rent in public housing increased by only 20 per cent, from $35 to $42 per month, including utilities.

The significance of these trends can only be judged by viewing them in relationship to the changes that were taking place in the nation as a whole, particularly as such national shifts have affected the concept of what constitutes a low-income family under changed circumstances. small indication of some of this relationship can be seen by noting that in the period when the median income of public housing households was increasing by 13 per cent, the national median income gained by 44 per cent, from $3467 to $5009. Average costs of private one-family houses constructed in non-farm areas rose from $9475 in 1952 to $13,875 in 1961-a gain of 46 per cent. The economic ability of a family to locate satisfactory housing on the private housing market was changing at the same time that incomes were rising.

The result of all the shifts of the last decade is that the defining of low income in the 1960's (and in particular, the defining of the ability of a family to procure housing within its reach) needs to be carefully examined in terms of the types and characteristics of families who are most affected by lack of housing opportunity. The accommodation of the public housing program to the small-sized elderly household has, without question, identified one of the key areas of low-income housing need in the 1960's. There are indications, also, that the housing needs of the large low-income family of six persons or more is another area of prime need that is becoming increasingly acute and pressing for solution. The identification of the types of low-income families needing housing assistance in the 1960's has complex facets related to the size of family and its economic and social

status.

Again, the 1960 census of housing can yield some meaningful insights through examination of data on the concentration of low-income families living in deficient housing by income group and household size.

Table 5 shows that almost half of the households with incomes under $2000 live in deficient housing but, also, that significant proportions (24 per cent and 17 per cent) of households in the income groups from $4000 to $6000 occupy such housing. Again, the census tables reveal that while 36 per cent of one-person households live in deficient housing, an identical percentage of households of six persons or more occupy such housing.

Even the comprehensive 1960 census of housing does not contain published data that shows the interrelationships of income, household characteristics, employment, health, and educational status that would yield meaningful guides for a largescale low-income housing effort. Some of this data could be made available through special cross-tabulations of information from the housing and population census: a meaningful first step. But, even beyond this, the understanding of the most effective kind of housing assistance for lowincome families in the 1960's involves more than the collection and analysis of statistical data. It involves an intelligent effort to match statisticallydefined need with effective programs

6,074,466 53,023,875

that will assist a variety of types of low-income families and will encourage initiative among families themselves to achieve the most adequate housing within their reach.

NAHRO believes that it is a matter of priority importance to undertake a full-scale comprehensive study of types of low-income families in the 1960's who need housing assistance and to relate these needs to program recommendations.

Recommendation "d"

A comprehensive study of the needs for low-income housing assistance in the 1960's and the translation of these findings into program goals I will take time. For this reason, NAHRO recommends that the present public housing program be extended for the next two-year fiscal period at the current rate of assistance demand, about 70,000 housing units per year. This rate of assistance would represent about 5 per cent of total annual residential production.

Additional authorization of assistance funds should be based on a more refined analysis of the volume of production and rehabilitation of existing structures needed to achieve defined low-income housing goals.

The word flexibility is defined in the dictionary as the capacity to be adapted, modified or molded-or to be responsive or readily adjusted to changing conditions.

If the need in the low-income housing program for the future can be summed up in one word, this is it: flexibility.

For, over the next few years, this program must be recast into a new framework that will enable it to undertake a full-scale effort to assist low-income families to achieve better housing. A way must also be found to make low-income housing an inte gral part of urban renewal. In addition, the financial structure of the public housing program, affected by static rental income and rising operating costs, as well as the need for modernization of older housing developments, must be adjusted.

An essential first step in understanding the implications of adjusting to these challenges is to recognize that there is no sure-proof way of predicting either the economic climate or the total housing market situation within which the low-income housing program will have to operate. In fact, no national appraisal taken at this moment would reflect fully the variety of economic circumstances and housing situations that now exist in various parts of the United States. What may be a useful method of providing low-income housing as sistance in one area, may be less

useful in another. What fits the situation today, may be unsatisfactory

tomorrow.

The need is clearly for a set of low-income housing assistance tools that can be used alternatively or selectively to meet situations as they exist. Public housing can no longer be considered in isolation from the trends in the total housing market; nor can there be complete depend. ence on only one method of applying the public housing financial formula.

The end result of providing a variety of assistance methods, as covered in the NAHRO recommendations, may well be what was advocated by Dr. Ernest M. Fisher in his report to the administrator of the Housing and Home Finance Agency in 1960: the achievement in each community of a balanced inventory of publicly-assisted low-income housing including old and new, large and small, scattered and concentrated, single and multi-family, highand low-rise. And we might add to Dr. Fisher's list:

some publicly

owned and some privately owned; some held in public ownership for short as well as long periods of time.

NAHRO recommendations, as presented on the opposite page and explained below, are aimed at bringing new flexibility into low-income housing assistance methods, particularly in relation to opportunities in the private housing market. So, before getting to the specific recommendations, let's take a look at the private

market.

Private Market Trends

If the prevailing winds can be deduced for the shifting housing market over the next few years, they would seem to indicate the following:

a continuing emphasis on new apartment construction, with the resulting release of many older apartments and apartment buildings for new occupancy.

a move by private builders from low-cost housing.

... a continuing slow market for

older houses and, particularly, for houses in so-called neglected neighborhoods.

New Rental Housing: Over the past five years, construction of rental housing has moved from one-fifth to one-third of total new housing starts and the end of this trend is not yet in sight. While the total impact of this switch has not yet been fully felt, the Chase Manhattan Bank could comment in its spring 1963 report on Real Estate Values that: "there may be imbalance in the rate of expansion, since apartments are currently 30 per cent of new construction and only 16 per cent of existing units."

Already there has been some reflection in the total housing inventory of the new rental housing coming on the market. Vacancies in rental housing in the United States for the second quarter of 1963 were maintaining a high level of 7.5 per cent, while vacancies in completed rental housing supported by the Federal Housing Administration mortgage insurance were 5.1 per cent of total available units in March of this year.

The National Association of Real Estate Boards could report in its spring 1963 market report that: "At no time since the 1930's has there been such a wide variety of apartments available for occupancy."

Home Builders Steer Away from Low-Income Market: The largest unsatisfied source of current housing need is housing for low-income families. Yet, experience over the past year has seen the hopeful interest of

home builders a few years

in reaching this market replaced by a trend away from low-cost homes. The National Association of Home Builders reported in the spring 1963 survey of its Builders' Economic Council that:

"... there is no question about it: BEC members are switching away from lower priced homes to more expensive ones... the median sales price of 1963 homes is going to be $15,800, up $800 over 1961 ... there is no dominating reason that explains this shift from lowerpriced homes however, there is some evidence that the typical sale house today tends to be larger and less modest than a few years ago... the higher typical price represents less building of smaller, more modest houses. This is not to say that there is no potential market for low-cost housing, but the marketing problems are

difficult and becoming more so
every year."

Slow Market for Existing Older Housing: Another factor in the dynamic pattern of the housing market shifts is the slow pace of activity for sales of older houses, particularly those in so-called "neglected neighborhoods." NAREB reports that transfers of existing single family homes, and their prices, were signif icantly lower in 1963 over 1962 for structures of all ages. Transfers of existing single family homes in "neglected neighborhoods" were lower in 1963 in two-thirds of all the reporting areas in the United States. These facts are shown in Tables 3 and 4.

There are strong indications that the housing market is in transition to a new period, which will be influenced by different forces than those of the decade of the 1950's. Along this line, some second thoughts have appeared lately on the prospects for a housing boom in the late 1960's, set off by a rise in new family forma. tions. Until recent weeks, this has been a commonly accepted prospect. However, more careful analysis of recent population trends by such auchorities as Dr. Philip M. Hauser of the University of Chicago evokes a different picture. Dr. Hauser has stated that he believes "the age structure is taking the bottom out of the housing market for the 1960's" and that there may well be "a glutted labor market with wages pushed down and marriage age pushed up, with a resulting delay in family formation and questionable demand for housing."

Public Housing, Private Market

The traditional approach of the public housing program has been almost entirely toward the construction of new dwellings to be owned and operated by a public agency over a long period of time. While there is continuing utility for this approach, complete dependence on it as a method would overlook significant opportunities made available by private market trends. The objective fact is that the public housing program is not a type of housing or type of family but a financial formula or method by which housing assistance can be brought to the low-income family. It involves three essential components: low interest rates, partial tax exemption, and cash subsidy. The fact that the application of this formula in the past has been almost

It's a

exclusively in new construction, for long-term use, is not inherent in the formula itself.

Some idea of the potential flexibility in the use of the combination of assistance aids under the umbrella of the public housing formula can be seen in recent activities of many local housing authorities. Some of these efforts are described in separate stories in this issue of the JOURNAL. But as the commissioner of the Public Housing Administration, Marie McGuire, pointed out in an important letter to local housing authorities on October 31, 1961, the variations possible in the application of the public housing financial formula, under different circumstances and to meet different needs, have hardly been explored.

What we are exploring here is not only what can be done under the present formula-but methods and techniques that can be set up as supplements to the present public housing financing vehicle.

Recommendation (a)

If the opportunity provided by an increasing supply of vacant existing housing is to be utilized, a greater emphasis must be placed on the re

per

habilitation of existing structures as a part of the public housing program. There may be significant opportunities over the next few years for local housing authorities to acquire and rehabilitate apartment structures, as they have already done with a number of FHA-defaulted housing developments. Another special opportunity for rehabilitation may exist among the growing supply of existing single family houses that are available for sale. If proper coordination is undertaken with urban renewal planning, many structures in "neglected neighborhoods" might be rehabilitated for low-income use as an integral part of the total renewal process.

Recommendation (d)

Potential opportunity for bringing housing assistance to low-income families is through a system of loans and/or grants to low-income home owners living in housing that might be rehabilitated. Something of the potential for this approach can be seen in the fact that, of the more than 10 million households living either in sound housing lacking plumbing or in deteriorating housing, almost 3.5 million, or one-third,