A major defect in the public housing program is that low-income families, including the elderly, are limited in their choice of decent dwellings to the public housing project. Yet for the same Federal and local subsidy, the choice could be widened so that they could make their selection from any number of other decent dwellings on the market. If a monthly rental subsidy equal to the present subsidy were made available to any eligible low-income family qualified by the public agency, private builders or nonprofit associations could make housing available to them in the city or the suburbs and at rents within their means.

Under this formula, the private building industry would be assured of a vast and untapped market for new and rehabilitated dwellings, whether they are conventionally financed or built under section 221 (d) (3) and (4), cooperative housing, or other Federal programs. There would be a more logical distribution of families where the work location is and many families who prefer not to live in public housing would find decent accommodations.

We now come to the subject most dear to the Governor's heart, and that is the problem of providing home-base housing for agricultural workers.

In that connection, we recommend an amendment to the public housing program to provide an additional subsidy, to provide up to $120 per year for dwelling units occupied by low-income agricultural workers. This would be similar to that which is now provided under public housing for elderly families and under the new bill which is being expanded to include displaced families of low income.

Senator CLARK. May I ask what you mean by "home-base housing"? Mr. STALFORD. Yes, sir; this would be for the agricultural worker who would establish his housing within a given community and that would be his home base. And it is anticipated that, where he does not have a year-round job at that location, at least that would be where he would locate his family, and where there is seasonal work in other parts of the State for a few weeks of harvesting that he could then by himself go on to that other area to help out.

Senator CLARK. So he would be a migratory worker?

Mr. STALFORD. No; he would be a home-base worker. He would maintain his base in an area where there is substantial employment most of the year.

Senator CLARK. But then he would migrate the rest of the time? Mr. STALFORD. To a limited extent, where he is needed in other sections of the State for short periods of harvesting.

Senator SPARKMAN. But may I interject this. The distinction is this: He is primarily a homeworker

Mr. STALFORD. Correct.

Senator SPARKMAN (continuing). Living there, even though he might work in some community away from there part of the time. Mr. STALFORD. Part of the time.

Senator SPARKMAN. His major employment would be right where he lives in a community.

Mr. STALFORD. That is correct.

Senator SPARKMAN. As opposed to the migrant worker who makes it a practice to move from job to job.

Senator CLARK. This fellow then is not a farmer? He does not own any land? He is a laborer?

Senator SPARKMAN. Farmworker.

Senator CLARK. The idea is to give him homebase housing. I understand it now. Then he can wander around the whole country as far as that is concerned from time to time when he cannot find employment in his home base?

Senator SPARKMAN. Yes.

May I interrupt at this time to say I have another very important committee meeting that I need to attend. Senator Clark has very kindly agreed to continue the hearings this morning.

I apologize to you gentlemen and to the witnesses that follow you for having to leave, but when these committee assignments come up the way they do we simply have to pick among them, and this other one is one I think I need to attend. I am sure my friend from Pennsylvania will agree with me.

Senator CLARK. I am happy to do so. I have just left the Bobby Baker hearing to come here. There is a very attractive witness on the stand down there. But I felt duty called to housing.

Senator SPARKMAN. There is no television where I am going. In fact, it is an executive meeting.

Senator CLARK. Please go right ahead, if you will, sir.
Mr. STALFORD. Thank you, Senator Clark.

We have just four more items which all relate to rural housing loans. Senator CLARK. Before you do that, let me ask you, because what you have said about home-base housing is a new thought to me: Superficially, it sounds like a very good one. The problem does not exist as far as I know in the Commonwealth of Pennsylvania. How big a problem is this in California?

Mr. STALFORD. Well, we have an average domestic labor force of approximately 245,000.

Senator CLARK. Do you really?

Mr. STALFORD. We have submitted the Governor's testimony in its entirety, in which he points out the frightful conditions under which these people are now living. It includes statistics.

Senator CLARK. Thank you very much.

Mr. STALFORD. Now, under rural housing loans and grants under title V, the Housing and Community Development Act of 1964 creates a new section 518 to authorize grants to any nonprofit organization, or nonprofit association of domestic farm labor, to assist in providing housing and related families for domestic farm labor in an amount up to two-thirds of the development cost, less any amount the Secretary of Agriculture determined could practically be obtained from other sources.

Rents would be controlled by the Secretary. Appropriations would be authorized not to exceed $75 million under this section through June 30, 1968.

The creation of this new section 518 would prove to be an excellent aid to provide badly needed housing for low-income agricultural workers. However, the amount of the authorization is woefully inadequate to attempt to meet the need for a 4-year period.

Further, a State or political subdivision is excluded as a recipient under this section, and we believe they can serve as important facilities to provide low-cost housing under this program.

We propose a solution to increase the amount of authorization under section 506 to $100 million annually, on a cumulative basis, through

June 30, 1968. In addition, include a State or political subdivision as an eligible participant.

The next problem is the need for a below-market interest rate, longterm insured loan program to provide rental and sale housing for low- and moderate-income agricultural workers. This type of loan could be used to supplement grants under the new section 518 and could minimize the amount of grants needed for each project.

The proposed solution would be to create an additional section to title V to authorize the insurance of loans by the Secretary of Agriculture to public, nonprofit, and limited dividend mortgagors similar in concept to the section 221 (d) (3) program, with purchase of the loans by FNMA under the special assistance functions.

The next problem is that under section 516(d) the present authority of the Secretary of Agriculture to enter into repurchase agreements with lenders will be terminated for loans insured under sections 514 and 515(b). This repurchase feature has been instrumental in obtaining lenders willing to purchase these loans at a net rate of 44 to 42 percent, dependent upon the term of the repurchase agreement and the money market.

Elimination of the repurchase feature and a net rate to the lender of 42 percent under the new act will result in sales of their loans only at substantial discounts.

Solution: Add section 516(e)-the Secretary is authorized to make agreements with respect to the repurchase of loans insured hereunder on such terms and conditions as he may prescribe, except that no such agreement shall provide for purchase by the Secretary at a date sooner than 3 years from the date of the note, pursuant to section 308 of the Consolidated Farmers Home Administration Act of 1961.

We have only one additional problem to bring up, and that is the proposed act under "conforming amendments," section 507 (b). Section 514(a) of the Housing Act of 1949 is amended by striking out "any State or political subdivision thereof, or any public or" and inserting in lieu thereof "or any." This provision eliminates public agencies as sponsors of projects under section 514, and we strongly recommend that this form of sponsorship be included.

Further, we recommend that section 515 be amended to include a State or political subdivision as an eligible sponsor of housing for the elderly.

Senator, that concludes the condensation of our legislative recommendations. They are being put into the record in their entirety. Senator CLARK. Thank you, sir. You are Mr. Stalford? Mr. STALFORD. That is correct.

Senator CLARK. I am sorry I came in late, and I did not have an opportunity to meet you.

I want to welcome you, as I am sure Senator Sparkment did.
Mr. STALFORD. He did indeed.

Senator CLARK. And I ask you to convey the warm regards of the members of the subcommittee, I think I can say on both sides of the chair, to Governor Brown, and to thank him for his helpful testimony. And I want to thank you, sir, for your meticulous attention to the detail of this bill. That is what we need.

I imagine that you have been working largely from the bill, S. 2468, which Senator Sparkman introduced by request. That is the administration bill.

Mr. STALFORD. That is correct, sir.

Senator CLARK. I want to call your attention to another bill which is S. 2031, introduced by Senator Humphrey, Senator Pell, Senator Ribicoff, and me last August as a result of pretty extensive conversations we had with the U.S. Conference of Mayors and the NAHRO people.

Frankly, I am a bit disappointed in some of the provisions of the administration bill. Senator Sparkman has already indicated he is opposed to some of these provisions. And we are going to have to bring out of the committee, I think, if we are to get a bill the committee can agree upon and for which we can press enactment in the Senate, sort of a combination of a number of different bills.

I would ask you if you would to take a look at S. 2031. It has more extensive provisions for both public housing and urban renewal. It deals, I think. more effectively with problems of housing for the elderly and middle income housing and has a number of provisions in it which are either quite different from or conflict with the provisions

of S. 2468.

Myself, I have an open mind as to what we should report out of here, but it would be most useful to us if you could send us a memorandum giving us your critique and your thinking on S. 2031. Mr. STALFORD. I will be very happy to, Senator.

(The memorandum was not received prior to the printing of the hearings.)

Mr. STALFORD. I would like to point out that, although we used the administration bill as the basis for our testimony, many of the suggestions that we have made are of our own origination, of our own authorship.

Senator CLARK. I understand that.

Now, the staff has pointed out to me I should make the same comments to you with a request for your comments on S. 981, which is Senator Williams' bill dealing with the subject of farm labor, which your testimony dealt with rather extensively.

We would like to know whether you think the provisions of that bill are adequate to meet the problems which you raise.

Mr. STALFORD. I would be very happy to, sir. I understand many of the features of S. 981 have been carried into the administration bill. Senator CLARK. That is right.

Mr. STALFORD. But not all of those.

Senator CLARK. That is right.

Mr. STALFORD. We have made certain recommendations here for the further extension of aid in the form of insured loans and grants to provide housing for agricultural labor.

Senator CLARK. Thank you, sir.

Mr. STALFORD. Thank you very much.

(The recommendations were not received prior to the printing of the hearings.)

Senator CLARK. Senator Douglas.

Senator DOUGLAS. I wanted to ask a question on 221 (d) (3). I notice that you wish to have it amended so as to eliminate the requirement of a "workable program"-in quotes. Now, we have had other testimony asking to have this program accelerated and made more specific. I wondered why you want to eliminate this requirement of a workable program.

Mr. STALFORD. Firstly, I would like to point out, Senator Douglas, that we are very much in favor of the principles and concept of the workable program, and we are encouraging our communities in the State to undertake such programs.

However, we find that many of the communities have failed to act because they are not interested in other provisions of the Housing Act such as urban renewal or public housing, and that merely to qualify a community for eligibility under section 221(d) (3) has not been sufficient incentive for the communities to adopt workable programs. In the meantime, hundreds of thousands of our low income in the State are just ineligible or cannot find adequate housing because their communities have failed to act.

And, of course, the low income of our country are probably the least organized and the ones least able to provide pressure on their communities to undertake workable programs.

Senator DOUGLAS. Are you saying, therefore, that the Federal authority should have the power to act in this matter even though the community has failed to come up with a program?

Mr. STALFORD. Well, I am saying that I think that the 221 (d) (3) should be eligible for communities without regard to whether or not the community has adopted a workable program.

Now, I bring out in my testimony another factor, and that is that even in those communities that have workable programs the sponsors have filed applications with the Federal Housing Administration only to find out that by the time FHA completes its processing the workable program has expired.

And, accordingly, FHA is unable to issue its commitment under existing legislation. And the sponsor in the meantime has purchased land, invested in plans and many, many months of processing.

Senator DOUGLAS. You have actually found specific cases of this? Mr. STALFORD. Yes, sir; I have.

Senator DOUGLAS. Would you name the communities?

Mr. STALFORD. One of them is in Alameda, Calif. We had this instance last summer. Another that is current at the present moment is in Vallejo, Calif., where FHA is completing the processing of a 221 (d) (3) project and the workable program has not been extended yet by HHFA simply because the community has failed to comply with all of the requirements of recertification.

Senator DOUGLAS. Are these communities well-to-do communities which are dominated by a power structure hostile to housing for low income and transient labor and which therefore disregard the needs of the submerged two-tenths, three-tenths, four-tenths of the community?

Mr. STALFORD. These are communities of average income I would say, and I think there are other factors that influence the question of complying with recertification rather than just 221(d) (3).

These communities must at time of recertification have shown progress to HHFA, and if they have not satisfied that agency, their recertification is delayed.

So we find that the community not moving along fast enough in this area of workable program to satisfy HHFA means that in the meantime the sponsors are caught in the middle where they filed an application with FHA when a certification was in existence, only to find it has expired by the time the commitment is ready for issuance.