Section 221, paragraph (d), subsection 3, provides that a nonprofit corporation or association regulated under Federal or State laws, or by political subdivisions of State or agencies thereof, may borrow money for the construction and operation of housing. The preference given public or quasi-public organizations is obvious. The private builder is granted financing of 85 percent of appraised value on individual homes-the public association is granted 100 percent financing of appraised value and up to $5 million in funds. In addition this public organization could build any place at 100 percent financing, while the private builder under section 220 will be restricted to slum renewal areas at 90 percent financing. We object to the inclusion of this provision for several reasons:

1. Because we believe it permits unfair competition with private enterprise. 2. Because it will discourage the entrepreneur from constructing and operating housing in renewal areas.

3. Because the 100 percent financing coupled with a nonprofit organization "regulated or supervised under Federal or State laws" makes this very closely related to public housing. This provision could be used to circumvent limitations placed on the construction of public housing.

This section 221, paragraph (d), subsection 3, should be deleted in its entirety.

PUBLIC HOUSING

We regret that the need for more public housing will not be reviewed this year. It has become more and more apparent that public housing is not being occupied by the indigent or the needy but by people in moderate circumstances who could provide for themselves. The relief client, the pensioner, the public charge is the exception rather than the rule.

Frankly it is impossible to determine just exactly who occupies public housing and the legal right to their being there. Nor are the financial operations available for review. The directors of public housing are reluctant to divulge any information concerning both their tenancy and their operations. Inasmuch as these are quasi-public institutions subsisting on public money, we believe that Congress should make it mandatory for all public housing directors to make available their books for review to responsible organizations.

We believe that public housing should be made available to the people for whom it was meant. All public housing now standing and under construction should be available under priority to:

1. For indigent families supported by relief.

2. Veterans dependent principally on their pensions or disability payments.

3. Any dwellings left over should be available to the lowest economic tenth of the community.

Unless this is provided the existence of public housing cannot be reconciled. When these limitations are adopted we can then determine with comparative accuracy our need for future public housing, if any.

We believe that all Lanham housing should be sold or disposed of as quickly as possible. There is little or no reason for the continuation of Government operation of this type of housing at the present time. Many public housing - administrators refuse to relinquish their control of these housing units for private or personal reasons or as a matter of ideology. However, they have served their purpose and their sale will not diminish the amount of housing available for the American public. They should be sold as soon as possible-in any event within the next 12 months.

CONCLUSION

We have discussed the various provisions of the bill concerning rehabilitation, slum elimination, and urban renewal. We believe that this program is practical and that thereby sound civic goals can be achieved. However, as we stated previously, money is not the only tool necessary to insure the success of this program. We need planning and guidance for the borrowers to insure actual improvement to their homes. Occupans must be held responsible for the exterior housekeeping of their premises. We must recognize that responsibility for exterior maintenance must be mandatory upon the owner if we are to prevent future slums.

We do not believe that the present generous provisions for the financing of homes should be increased at this time. We are maintaining a very high rate of construction. Any overproduction would be deflationary, thereby wiping out the slim equities of the very homeowners created by this bill.

At the beginning of our testimony we suggested that we would limit our consideration of the housing bill to its possible impact on our existing housing inventory. I use the word inventory purposely in the hope that it will remind us of our superabundant inventory in other products. These inventory problems are tremendous-and they are rising every day-not only in farm products but in so many commodities such as autos, steel, etc.

If there is any purpose for my being here it is in the hope that I have shown you that housing can stand just so much of the hypodermic needle before it too can be overbuilt. In fact, I hope I have shown you that the overproduction of butter is child's play compared to the overproduction of housing. Butter spoils in a relatively short time-but it takes years to work off an overbuilt housing situation.

I hope I have shown you that in considering this bill we are deciding not so much the future of the housing to be built as the future of the 43 million nonfarm housing units now on hand. And if, at this critical stage, we are to become concerned, let us also be concerned with the 30 or more million homeowners who have had the courage and thrift to save for their homes as well as with the few who haven't.

Under this bill we believe we may increase the construction of housing abnormally. We maintain such abnormal stimulation is the most dangerous thing possible to our economy. We are debasing the biggest asset owned by the majority of our people their home. We are endangering its value, its desirability, and the financial standing of all homeowners.

This bill, unless substantially modified, offers a sure method for deliberately creating overbuilding, overfinancing, abnormal rise in private debt, and, as the end result, a financial depression caused by inability of the borrowers to meet their mortgage obligations. Basic housing is now available to everyone at very small effort through modest savings. Little more can be asked or should be granted.

Statistics

NUMBER OF VACANT DWELLING UNITS IF HOUSING USED AS IN 1940

Vacant__

Vacancy factor_

1 Census, p. 20, No. 41; Census, HC-8, No. 1.

6, 500, 000 units.

13 + percent.

Census, p. 20, No. 41.

The CHAIRMAN. Since we can't finish this morning, I think we might as well recess until 2:30-I was going to say if anyone has just a short statement that they could handle in about 3 or 4 minutes, we might take them now.

Mr. MITCHELL. It might take 5 minutes.

The CHAIRMAN. All right. Mr. Mitchell for the National Association for the Advancement of Colored People.

STATEMENT OF CLARENCE MITCHELL, NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COLORED PEOPLE

Mr. MITCHELL. I have one chart I would like to put up, and refer to it, after I summarize my testimony.

Mr. Chairman and gentlemen of the committee, I am Clarence Mitchell, director of the Washington Bureau of the National Association for the Advancement of Colored People.

I have my prepared statement which I would like to submit for the record.

The CHAIRMAN. Without objection, your statement, as prepared, will be inserted in the record. I don't think we can put that chart in, can we?

Mr. MITCHELL. We have an attachment.

The CHAIRMAN. We will place that chart in the record, too, at the end of your remarks.

Mr. MITCHELL. I want to call the committee's attention to the first part of our statement where, in the third paragraph of page 1, we offer an amendment to the basic housing legislation.

We ask that "The aids and powers made available under the several titles of this act are not to be conditioned or limited in any way on account of race, religion, or national origin of builders, lenders, renters, buyers, or families to be benefited."

We have pointed out in our statement, that it is our firm conviction that if the present housing laws were properly administered, there would be no need for this amendment. The problem is that the housing agencies have studiously ignored their responsibilities. They have not had the courage to adopt such programs and policies as would eliminate the discrimination that exists under the present housing legislation.

We have said in our statement here that the policies which are followed by the housing agencies would not in any sense embarrass the present Malan government of South Africa, which is a prosegregation Government. Curiously enough there is in this morning's New York Times a statement about the Malan government of South Africa embarking upon a program of clearing Negroes out of the slums areas over there, and apparently they will do it in about the same principle followed in this country; namely, that government money is used for the purpose of clearing colored people out of areas where they now live, reducing the land available to them, and all with the assistance of tax-supported aid of one kind or another.

Now, we want to call the committee's attention specifically to Savannah, Ga., where we have an area which is a place where a great many colored people have lived for years, and that area has been cleared out.

Right in the middle of it there is a wonderful and enormous new housing development with grass plots, trees, playgrounds, and whatnot, for whites only, and all around it, of course, are these shacks unpaved streets, slum areas, where the colored people are forced to live.

I would like to offer if I may, Mr. Chairman, for the record, a request that we submitted to the housing agencies way back in 1952, asking them if they would change these policies, and they have to date

The CHAIRMAN. Without objection, that will be made a part of the record.

(The information follows:)

STATEMENT ON HOUSING SUBMITTED TO MR. RAYMOND M. FOLEY, ADMINISTRATOR OF THE HOUSING AND HOME FINANCE AGENCY

There has been a steady and dangerous trend in the application of racial pol icies by the housing agencies of the Federal Government since the United States Supreme Court decided the restrictive covenant cases in May of 1948. When the Court made that decision, it opened the door for colored homeseekers to purchase and use property in any neighborhood where there is a willing seller. This has resulted in a steady expansion of the colored population out of the racial ghetto into nonsegregated housing areas in communities such as Los Angeles, Calif.; Cleveland, Ohio; Washington, D. C.; and Richmond, Va. The chief threat now to this progress in eliminating Negro ghettos comes from the Federal Gov. ernment itself through the operations of the Housing and Home Finance Agency and its constituent agencies.

Under the slum clearance and urban redevelopment program, colored residents of some areas that will be cleared are being forced to move out while white persons will be the only racial group admitted to the new rental or sales housing to be erected on the cleared site.

The number one illustration of this incredible type of discrimination, with the assistance of the Federal Government, is Baltimore, Md., where there are two areas designated for redevelopment-one known as the Waverly project and the other in the vicinity of the Johns Hopkins Hospital.

In several cities, public-housing projects will be built in areas where colored people have lived for many years but when the new projects are completed they will be designated for white occupancy.

The most critical example of this is Savannah, Ga. In this community, a number of colored families will be moved from what is known as the Old Fort area. We are advised that, because the site selected for the housing project is Savannah is of historical interest, city officials have decided that the project must be for whites only.

Under the FHA program, the city of Washington is ringed with new develop ments for white persons only. We are informed by builders that there are ironclad agreements between FHA and various lending institutions under which new housing areas must be designated for a specific racial group. Hence, in the areas surrounding Washington, practically all of the FHA-insured developments are for whites only. This is the typical pattern of FHA operations in the North and West in the South, FHA operations generally reinforce patterns of residential segregation.

The defense housing program will, undoubtedly, follow the same pattern of segregation now in effect under the other housing operations. The policy set forth in the Administrator's letter to Congressman Abraham J. Multer, dated November 26, 1951, clearly permits continued segregation.

During the debate on the defense housing bill in the first session of the d Congress, Congressman Multer stated that he had been advised by FHA that questions pertaining to segregation in housing aided by the Federal Government had been taken care of by administrative regulation. At that same time, the FHA through its general counsel, Mr. B. C. Bovard, said the following:

"I know nothing in the National Housing Act or in rules and regulations there under which would authorize the (FHA) Commissioner to require that mortgagors disregard racial considerations in the selection of their tenants. This would appear to be a matter for determination by the mortgagor and not by thi Administration."

Thus the housing agencies, while publicly stating that they will not insure mortgages or otherwise aid housing where there is imposed a restrictive covenant, actually use the vast sums of money, powers, and knowledge at their disposal to aid and support segregation in all phases of housing.

This is the exact opposite of the following position taken by the Department of Justice in its amicus curiae brief in the case of Shelley v. Kraemer, No. 72, Supreme Court of the United States, October 1947:

"The Government is of the view that judicial enforcement of racial restrictive covenants on real property is incompatible with the spirit and letter of the Constitution and laws of the United States. It is fundamental that no agency of Government should participate in any action which will result in depriving any person of essential rights because of race or color or creed."

The time has come for the housing agencies to cease the hypocritical practice of refusing to approve written restrictive covenants while closing their eyes and ears to the actions and verbal statements of builders, lenders, local housing authorities, and others who make plain and publicly say that housing constructed with Federal assistance will be exclusively for members of a specific racial group. In essence, the Federal housing agencies are operating on a "separate but equal policy" in direct contradiction of the United States Supreme Court and national policy as stated in briefs filed by the United States Department of Justice.

This is the time for the housing agencies to deny any assistance or finances unless there is a guaranty that the housing made available will be open to all qualified applicants without regard to race.

Because the present course of the housing agencies is a serious threat to the gains made by the NAACP and other organizations through court action against restrictive covenants, we are confronted with this question: "Is it better to oppose the housing program, as such, and, thereby, halt Federal action in this field than to let the present program continue and within the next 5 years face a new and more terrible kind of restriction on the use and occupancy of housing imposed with the help of the United States Government itself?"

Mr. MITCHELL. This exhibit shows an incredible arrangement. It is from the city of Baltimore. I hope some of you members, Mr. Chairman, will go over this and take a look at the monstrosity. Here is an area of the city which at present is occupied by about a thousand colored families. The city has embarked upon a program of clearing out that slum area, but it is also going to clear out some of the good housing in there.

Here is the way they are going to do it: In this section there is substantial housing that is being occupied by colored people. That will be torn down. Here there is a white church which has great historic significance, and it will be left. Here is a white dairy which will be left, and it is going to make an unsightly appearance there, because there will be milk cans, trucks, and all that sort of thing right in that area that is to be redeveloped.

Then there is a great big warehouse, also, owned by white people. That will also be left in the area.

But, down here is a historic colored Methodist church, which must be over 100 years old, which will be demolished.

Here is another church; a colored Baptist church, which will be demolished.

And why is Baltimore doing it? The city officials are doing it because the people in charge of that plan say they want to make that area like a Beacon Hill, like the Boston Beacon Hill area. It will be one where the Negroes will be sharply limited as far as occupancy is concerned. We say that if the State of Maryland, and the city of Baltimore want to do that, it is a form of immoral conduct, but it is even more awful if the Federal Government gives the city the tax money that is collected from all of the people of the United States to carry on that kind of discrimination. We think that our amendment, if adopted, would prevent such discriminatory practices.

44750-54-pt. 1-58