international situation result in new housing dislocations, the mobile homing resources may well prove to be a decisive factor on the homefront.

Third, the proposed amendments will improve general property values and community relations by encouraging modern standards for trailer-coach dwelling. Wherever substandard conditions do exist in trailer parks this proposed legislation would permit private enterprise to do the job of property improvement and modernization.

Fourth, in this far-flung industry, the effect of providing more reasonable credit terms will be to sustain employment in more than 150 factories employing, with their component suppliers, nearly 100,000 workers. When consideration is given to the 3,000 dealers and more than 12,000 park operators in the country, the economic benefits are further evident.

At no cost to the taxpayer.

Finally, I would like to make this point unmistakably clear: there are no subsidies involved in this proposal. Not a cent of cost to the taxpayer. Not a cent to tack on to the national debt. We are talking here of extending credit on secured loans with reasonable limitations and conditions. In our opinion the insurance premiums which the FHA will receive would very substantially exceed the losses. This will be a fully self-supporting and self-amortizing program.

That completes my prepared statement, Mr. Chairman. With your permission, I would like to file attachments which include a draft of the specific amendments we are supporting.

The CHAIRMAN. Without objection they will be printed in the record and without objection this entire statement-you have other exhibits here, do you not?

Mr. KAUL. Mr. Chairman, we have this additional exhibit, attachment B which was not available this morning.

The CHAIRMAN. Without objection, everything that you have here will be made a part of the record. You may tell the reporter exactly what you wish placed in the record and he will see that it is placed in there, if there is no objection.

Mr. PAINTER. We will file the Mobile Home Dealers Association's statement with your permission. We would like to have that included in the record also.

The CHAIRMAN. Anything you wish to file, you may do so up until the time our hearings are finished.

(The documents referred to follow :)

STATEMENT OF MOBILE HOMES MANUFACTURERS ASSOCIATION, CHICAGO, ILL.

Two million Americans are housed today in more than 750,000 mobile homes. Included in this figure are about 125,000 service families who find the answer to their housing problem in this type of dwelling. If all these 2 million mobile-home dwellers were to locate in the same area, it would create overnight the sixth largest city in the United States.

Mobile homes today represent the best example of successful, low-cost, unsubsidized, prefabricated housing.

Though the industry is some 23 years old, it became prominent first in the period of World War II. Trailers, as they have generally been known, date back to 1930 when total sales represented some $1.3 million. By 1937, this figure had grown to $17 million.

At war's end in 1945, sales for trailers in the United States totaled $39 million and leaped in 1946 to $114 million as their utility for housing began to be realized by the general public. This upsweep in use continued through 1948, in which year sales totaled $204 million. 1953 mobile home sales totaled $320 million.

Last year, production of mobile homes was just under 77,000 units. However, this was down somewhat from 1952 production of 83,000 units, and 1948, which was the high year, with 85,000 units production.

It was in the period of World War II that the trailer really began to outgrow its name and become in fact, a mobile home and to be so used. In the early days of the war, the Government purchased for the use of defense workers and other essential personnel, some 35,500 trailer homes. An additional 2,500 units for special purposes such as offices, laundries, etc., were bought by the Government. These units did yeoman service throughout the war, particularly in such jobs as housing personnel who were rushed into Oak Ridge to build the first atomic energy production center.

It has been estimated that during the war, and down to 1950, these Government-owned units were moved on the average of 11 times. This figure alone would indicate the utility of mobile housing and its adaptability to many requirements. In the post-war period, these trailers were utilized effectively in meeting the needs of the returning veteran, and in meeting similar problems. • It might be pointed out that similar uses have been found for trailers in civilian disaster areas such as Texas City in 1947; the Vanport, Oreg., flood of 1948; Kansas City flood in 1951; and similar emergency requirements. In the recent past, great reliance was placed upon mobile housing for the workers at the Savannah River atomic energy installation and at Portsmouth, Ohio. The Defense Housing Act of 1950 provided for the Government purchasing of mobile homes.

While this demonstrates beyond question, the great utility of this type of housing in unique situations, it is therefore, more significant to note that over 90 percent of the mobile home owners today use them as permanent homes. Sales figures for the past several years show a substantial maiority of mobile home sales going to military personnel and defense workers. For example, a survey showed that in the first 6 months of 1951, these 2 grouns bought 93 percent of all mobile homes sold. This was, of course, stimulated by the Korean crisis. However, there is every reason to believe that about 70 percent of all sales today are being purchased by these groups.

It is reasonable to conclude that the advantages of a permanent home that travels with the family as the military or job requirements dictate, have brought the mobile home into high prominence in the thinking of a large and substantial segment of our population.

With this upsweep in demand, there has been, of course, a revolution in design and conception of mobile home living. It is difficult to assess cause and effect in such a picture, but the manufacturers are satisfied that much of the public acceptance of this type of housing must be attributed to the comfort and adequacy of the modern mobile home.

Pre-World War II trailers seldom reached 20 feet in length. Little housing was expected from this trailer beyond vacation needs. Even by 1948, only 17 percent of the trailers sold were 30 feet or longer. This 17 percent grew to 64 percent in 1951, to 74 percent in 1952, and remains about the same today. (Length is a standard consideration in mobile homes for highway requirements in moving, etc., limit their width to 8 feet and their height to 14 feet; hence, growth of trailer size is limited to length.)

Production last year found 20 percent in the 35-foot class, by far the largest grouping.

It seems certain that the trend to larger sizes will continue and the era of the 40-foot trailer is not far away.

Pricewise, the mobile home represents the most housing for the least money available today. Last year, the average unit cost was $4,200. In price range, the mobile home dweller has the choice of models ranging from $2.800 up to $6.000, furnished with the essentials of housing from cooking to bathing. Two bedroom units are commonplace and bathtub and shower bathing almost standard equipment. Complete electrical equipment is included, and toilet facilities. The modern mobile home has a kitchenette with refrigerator and stove arrangements that leave nothing to be desired. The air-conditioned mobile home will, no doubt, be introduced shortly.

It should be noted too, that the mobile home comes equipped with all furnishings, thus providing at these low prices, an answer to two problems for the homemaker, i. e., a house and its furniture and furnishings.

Comparing industry production and sales figures with FHA's report on its low-cost (under $6,000) houses it appears that mobile homes are supplying about 90 percent of this market. Only about 6.000 such fixed-to-site houses are produced under section 8 of title I of the National Housing Act each year whereas about 80,000 mobile homes are produced and sold each year.

Contrary to common belief, the desire to travel is not the prime motivation of mobile home dwellers. Mobile or semimobile occupation workers make up the largest class of current mobile home buyers (about 60 percent), followed by military personnel (25 percent), as mentioned earlier. Retired people make up a third definite class (about 10 percent) and the rest are lumped as miscellaneous. Their average annual income in 1950 was $4,500 as compared to the national average of $3,313. This past year, their income approached $5,000, still far above the national average. About 40 percent of the mobile home dwellers have children. Statisticians figure it at over 2.5 persons per mobile home.

Further statistics on the mobile home dweller show that 3 out of 5 of them are under 40 years of age, with 25 percent of the mobile population being young married couples. One in eight has passed 60 years of age. And finally, 14 out of 20 of these mobile dwellers now say they plan to live indefinitely in a mobile home.

This seems reasonable when the surveys show that 2 out of 6 such mobile dwellers have lived this way more than 5 years and 3 out of 6, or 50 percent have lived "mobile" from 2 to 5 years.

In this connection, the most significant figure developed out of last year's sales showed that over 60 percent were repeat sales. These were people who had owned at least one other mobile home.

That mobile home living is now an established part of our American way of life appears, therefore, beyond question. It leaves only the matter of how this group is to be fitted into the general housing picture.

Clearly there is a considerable economic gain for our society to have available, a moving or movable body of skilled labor that can be concentrated quickly and easily when it is needed. Sociologically, it would seem equally clear that it is desirable that this group be able, by virtue of mobile housing, to keep the family unit intact. Each of these considerations is part of the other. Society as a whole, has the economic resources of the skilled groups who can move. The standard of living and family conditions of this group of mobile workers are assuredly better as they take their families and literally their "home" with them.

There is the same consideration in the case of the military. Here, however, we must confess that the authorities in the services have only in varying degrees seen fit to accept the mobile housing in their plans. They have taken the restricted view that mobile housing is acceptable only for emergency and/or temporary housing.

Because of this rather negative attitude, it is significant that some 125,000 service families now own their own mobile housing. Moreover, the services have in the face of inadequate available commercial facilities, constructed many of their own courts for parking servicemen's mobile homes. Congressional committees such as the so-called Preparedness Subcommittee from time to time during the Korean crisis, recommended that the services provide more facilities for trailers and mobile homes in the face of the housing emergency. Recent policy statements by the Department of the Army have improved this situation considerably.

It would seem that the same considerations might apply to the services as did in the case of the Savannah River atomic energy installation where mobile housing was largely relied upon to furnish housing for family workers. These could be, and were, rolled away at the end of their period of need, thus avoiding the danger and the waste of creating substandard areas or slums through leftover temporary housing.

In the case of military personnel who buy their own mobile homes (we are not urging purchases by the services, incidentally) they take them with them as they move from base to base, or as they return to civilian life at the end of their tour of duty.

As for the retired people who now make up 10 percent of the mobile home users, over 200,000 people, there seems little doubt that this group will grow. Increased life expectancy, as we know, has increased tremendously the size of our "retired" population. Social security and general prosperity have made mobile living available and attractive to this group. The simplicity of mobile living with its refinement of convenience makes it most attractive to older people.

The ability to follow the seasons and to take their home with them has a great attraction for these people, as it would for almost anyone.

From the rough and uncertain beginnings of the early 1930's, our industry has grown to more than 150 companies. However, no one of them does as much as 10 percent of the business. There is keen competition and most manufacturers make several models.

The process of manufacture is actually assembly, which has built up necessarily a large group of suppliers. Perhaps 500 suppliers can be said to be doing a substantial business with the mobile home builders.

Although design varies from model to model, the modern trailer is built of steel, aluminum, and high grade wood construction. It is certain that the useful life of the modern trailer is far beyond its proposed mortgage or loan life.

The financing of mobile homes has been a somewhat slowly developing feature of the industry. Many problems have had to be faced, including the mo bility of the mortgaged property, an uncertain depreciation rate for used units, etc.

It is estimated now that there is about $400 million of mobile home paper in circulation. While it is a growing field for lending institutions, it is only very recently that it could be said that more than a few were participating. The one single feature in this industry that has brought more credit facilities into the picture, has been the development of the trailer into a mobile home. The increased usage of these units as homes has done much to win the confidence of the bankers and others.

This, plus the obviously solid character and income status of the average mobile home dweller and the outstanding record of minimum defaults on the paper has reassured the lenders.

Nevertheless, it is clear that more capital is required in the future if this industry is to continue to expand. We are, of course, certain that Federal recognition of mobile homes as housing, such as this legislation would provide, will assist tremendously in attracting more capital. We believe too, that it is only fair that Federal housing should include this very substantial group of our citizenry, and what is available to others in the form of governmental housing assistance should, in principle be available to them.

The average installment sale contract for a mobile home today is running about $3,000 for new units and $1,400 for used. Typical terms are one-third down, 3 to 5 years on the balance. Interest rates range between 5 and 8 percent discount, or 9% to 15% percent simple interest.

A recent survey of banks and finance companies elicited replies from 274 who handled mobile home paper; 255 of these replies reported no losses or negligible losses. Fifteen reported losses less than half of 1 percent. The largest reporting lending institution which carries currently about $31 million in mobile home paper, calculated its loss ratio at one-eighth of 1 percent.

Overall, the loss ratio on mobile home paper is estimated at less than onequarter of 1 percent. This is indeed an impressive record.

Despite this outstanding record for mobile home paper, and the efforts that our organization has put forth in bringing it to the attention of the lending authorities in this country, we are still concerned that our sources of credit will prove inadequate in the future. Because of our concern for the future, we are urging your careful consideration of the amendments before you today. We believe these amendments would be most helpful because mobile homes, which in unit cost represent low cost housing, become high cost housing due entirely to high financing requirements.

If mobile housing is able, by this legislation, to qualify for the rates now provided in title I of 42 to 5 percent discount, it would mean a reduction of 20 to 35 percent of this financing cost.

The establishment of a 7-year pattern for this financing would similarly achieve a reduction of 35 percent in the monthly payment. For example, if a contract of $4,000 is assumed-4 years at 6 percent discount-under present day terms it requires a monthly payment of $109 including insurance.

Under the terms of the suggested amendments the loan term is extended to 7 years at 5 percent discount. This would result in a monthly payment of $69, a reduction of $40 per monthly payment.

This leads naturally, to the situation of the mobile home court operators who, to date, have had to rely almost entirely upon equity financing and which is inadequate to the need.

Mobile homes, of course, need a site, just as any other housing, which means they have to have available to them, utility connections, water, sewerage and electricity. We have included them in our request for legislation because, in logic, the availability of sites for mobile home owners becomes a literal measure of the market. There is no advantage to owning a mobile home if no adequate home sites are available.

The Mobile Homes Manufacturers Association long ago recognized the necessity of mobile home court development including layout, sanitation, and appear

Within

ance, and inaugurated a continuing program for their improvement. our organization, the park division of MHMA, we have drafted standards for court design and construction and provided a system of inspection with recognition to courts meeting these standards. We publish a guide for the use of mobile home dwellers rating the various facilities and detailing their features. About 4,000 mobile home parks or courts meet MHMA standards today, though at least double this number of courts are in existence.

Total estimated investment in trailer parks in the United States is thought to be close to $200 million. Seemingly large, this figure is not surprising when it is considered that the average cost in a thoroughly modern park is $1,000 per mobile homesite. This includes cost of roads, sanitary and electrical facilities to each site, utility buildings, landscaping, and others, not including the cost of the land itself.

With upwards of 77,000 new mobile home units being produced and sold annually, the need for new court facilities presents a requirement of close to $77 million for court financing. At present there are no adequate mortgage funds to assist in meeting this need. To date, 98 percent of these facilities have been financed by equity capital.

As in the case of the mobile home itself, the parking courts have been slow to establish themselves in financial circles. Here again the attitude of banks and lending institutions can be traced to their early observation of trailers, courts, and their users. Formerly, trailer courts were established only along main highways and depended almost entirely on transients for business. Today transient occupancy is but a fraction of 1 percent of the business of the vast majority of mobile home courts. Courts are built now where housing is needed, and where mobile home dwellers are likely to find employment. Courts have been established near military installations where family housing is critical or nonexistence. Thus they become a definite housing resource.

We know of no national organization of park operators which is prepared to speak on behalf of legislation for assisting mobile home court expansion. Our interest, of course, is obvious in this matter but we are handicapped to that extent. It is perhaps necessary to say, too, that figures on the cost of practical and desirable courts are difficult to obtain. Naturally, they vary from one location to another, depending upon the availability of utilities, topography, soil conditions, and such.

We can pledge, however, or wholehearted cooperation with FHA in establishing standards for such facilities if this legislation is passed. We have available a sizable body of research and experience in this field which we would place at the disposal of the agency in attaining this objective. The facts are clear and official recognition that mobile home courts have a place in the housing resources of the country, such as would be afforded by this legislation, would do much to encourage lending authorities to study this type of loan.

In brief form, this is the history and the size of this industry today and the people it serves. What we have tried to outline here, are the salient facts which we believe established the reasons for your considering bringing mobile housing into the purview of the National Housing Act. We believe that such legislation is important as aiding the maintenance of a mobile body of workers whose jobs necessarily take them from place to place and from job to job. The economy is aided in this fashion and the workers themselves are better off economically and socially with the maintenance of the family unit. Similar considerations apply to the military personnel who prefer mobile dwellings.

We believe that the maintenance of a strong mobile homes industry is in the interests of the national security. Mobile homes have long since proved their worth in emergency situations. No other facility can produce so much good housing in such a short time and move it to the site of the requirement.

Federal recognition of mobile homes as housing within the purview of the housing act will encourage and assist in attracting capital and the acceptance of mobile homes and mobile home court paper by the lending authorities. Such a program, as is proposed here, will result in no added burden upon the taxpayer, and is self-amortizing. The outstanding credit record of the industry is most reassuring. The acceptance by such a large segment of the population of mobile housing should be persuasive to the Congress when considering the fairness and equity of including mobile housing in the Federal housing program.

We have presented the foregoing because we believe that too few people appreciate the size of the mobile population in the United States today and its makeup. We believe too, that too few people appreciate its future and its potential contribution to the welfare and satisfacion of our people.