Mr. MONRONEY. It is not spelled out, though, that that number of houses must be in existence before these projects are undertaken? Mr. FOLEY. Yes. On page 65 of the bill, Congressman, line 4 "that there be a feasible method for the temporary relocation of families displaced from the project area, and there, there are available or are being provided in the project area or in other areas not less desirable with regard to public utilities and public and commercial facilities, and at rents or prices within the financial means of the families displaced from the project area, decent, safe, and sanitary dwellings equal in number to the number of such displaced families." That is pretty carefully spelled out, Congressman. Mr. GAMBLE. Mr. Foley, that constitutes an amendment of the present United States Housing Act provision which says that the lower cost housing should be built on the area which is being demolished, or cleared. Is that not the section which has caused difficulty? Mr. FOLEY. Of course it is a different provision but- Mr. GAMBLE. I mean what you are getting at there is trying to cure that provision, which says that you shall demolish a slum and build a low cost housing building on that particular site which has stymied construction in certain places; is that not right? Mr. FOLEY. Yes. Of course, the equivalent provisions in the United States Housing Authority Act were vague and there is some clarification of them in the miscellaneous provisions of this act, Congressman. Mr. GAMBLE. Which is a very good thing, because it is dictated by experience. Mr. FOLEY. Correct. Mr. RILEY. Mr. Foley, in your statement you say that none of these funds will be used for rebuilding on the property after slum clearance. But, of course, private funds insured by the Federal Housing Administration could be made available to individuals or corporations. Mr. FOLEY. That is true, sir, for a project eligible under the Federal Housing Administration requirements, private funds insured by the Federal Housing Administration could be made available. Mr. RILEY. These capital grants would be supplied through regular appropriation procedures, would they not? Mr. FOLEY. That is correct. Mr. RILEY. And charged to the operation of the bill? Mr. RILEY. Thank you. Mr. STRATTON. Mr. Foley, would you care to estimate how many years it would take before you could show substantial results under this program? Would you estimate 5 years? Mr. FOLEY. On the urban redevelopment program now, Congressman? Mr. STRATTON. Yes. Mr. FOLEY. It would be very difficult to estimate. It would be relatively slow starting, of course, because of the very nature of the problem, and the safeguards that the bill very properly puts about the whole operation, such as the over-all planning of the community, and so on. I would hesitate to say very definitely, but I think it would be a matter of a few years, at least, before substantial visible results were obtained. Much of the difficult work would be the preliminary work, which is not seen. Mr. STRATTON. But in other words, this is necessarily a rather long range program; is not that correct? Mr. FOLEY. The total program, of course, is very long range, that is, the total program that might be envisaged, this being a relatively small part of the final need, but it is in that sense a long range program, Mr. McMILLEN. Mr. Foley, you feel that the entire responsibility for clearance and rebuilding of the slum rests with the Federal Government and the municipality? Mr. FOLEY. Not necessarily. Mr. McMILLEN. You do not feel that the individual States should share that responsibility and loss perhaps brought about in many instances by the neglect of the States to pass proper legislation? Furthermore, on the theory that the States are far more able financially to bear a part of the responsibility and loss than the Federal Government? Mr. FOLEY. Apropos of the first part of your question, Congressman, I do not want to be understood to say that I do not think the States have an interest, or even a responsibility in connection with the matter, because I think very definitely that they have an interest and could well have a responsibility. As to the latter part of your question, as to whether the States are in a better position to give fiscal aid at this time, I think I discussed that briefly a while ago and would like to put some studies on that into the record, if I may, since my statement was necessarily rather crude. But the fact that this bill makes the division as between cities and the Federal Government, does not, of course, preclude the States from giving assistance to the cities within their borders in meeting their portion as described by the bill. Mr. TALLE. Mr. Chairman. The CHAIRMAN. Mr. Talle. Mr. TALLE. Under title III, housing research, Mr. Foley, page 11 of your statement, you point out that housing costs too much, and that the pending bill would "authorize the Housing and Homę Finance Administrator to undertake a program of technical housing research aimed primarily at cooperating with and assisting the housing industry in achieving improved methods of production and consequently in achieving reduced costs." That is a consummation devoutly to be wished. How far do you propose to go with the research program? In other words, what are the elements in the cost of a house to which you would direct your research? Mr. FOLEY. Starting first with your first question, Congressman, of course the distance to which we could go would depend almost entirely upon the subsequent action, even after the adoption of this bill, of the Congress in connection with the necessary appropriations. I individually and officially have been keenly interested in this question for a long time, for the reasons that I have stated fairly briefly in the written statement. How far we might go and in what directions, I think, would gradually develop out of experience and submission of the results from time to time to the Congress. At the beginning, if you would like me to mention a few of the of the high spots-is that what you have in mind, sir Mr. TALLE. Yes. Mr. FOLEY. There is a very definite field in which we have been able to do some, but not enough, work in connection with new materials and new methods. For instance, a matter that was of great interest to various committees of this Congress is modular coordination, which has been developed to a very considerable extent, and which should be developed much further. There is presently no central place to do it unless it be done by the Government. In the field of building techniques, the distance to which prefabrication can be adapted, not only it toto but in partial prefabrication, to what is otherwise called conventional construction is another promising area. Others are: the testing of the materials already in use for their better use or more economical use and many matters of techniques. For instance we have put out a bulletin recently on proper methods for nailing, which has created tremendous interest, and is being used in apprentice schools everywhere. There is a wide variety of things. But I have in mind, in considering the responsibilities that, in the event of passage of this title of the bill, would rest upon the Administrator, it would be something like this, Congressman. There is a great deal which has been done and is being done, in connection with research, both as to materials and as to technical, statistical and economic research, privately and publicly. There has never been anybody, however, who has had the authority or the means to call together all of the major groups that are interested in production particularly and say, "Here is what the over-all need in research is. Let us map it out. Let us find out what could well be done," and then piece together the various things which are already being done, and thus determine what are the gaps, and decide which of those ought to be properly done by private enterprise, and can be so done-and certainly as many of them as can should be so assigned and then the inevitable gaps which cannot otherwise be filled, would become the task of the Federal Government. But there presently is no one required, having the authority and responsibility to draw together what has already been done, and to make it most widely useful because most widely known. That would be what I would broadly envision as the type of task to be done in the way of technical research under this title. Its key, it would seem to me, would be working in close cooperation with private industry and close coordination of the activities already, or to be, assumed by the Government. Mr. TALLE. I assume that under technical research you perhaps would not pay attention to zoning regulations, or would you? Mr. FOLEY. That is one of the fields in which a great deal of work needs to be done. Model codes, I should have mentioned-one of the outstanding things in that field, I think, is the draft of a model plumbing code which has been developed under the leadership of the Housing and Home Finance Agency, by the people most interested in the business and labor field. Then there is the subject of local codes for building, in general, building codes. Many States, for instance, have a very cluttered situation with respect to building codes, which, in one place, add unnecessarily to costs, and in another place in the same State, leave the community with little or no protection-those are all subjects for such an activity, sir. But, of course, this activity would not involve any power, or desire to have power, to enforce the adoption by the local communities or the States. Mr. TALLE. The two broad factors that must be brought together in building any housing unit are materials and labor-I am leaving out the land because of the fact that there is much variation because of location. Mr. FOLEY. Yes. Mr. TALLE. In the total cost of the housing unit, how do those two broad factors stack up, percentage-wise? Mr. FOLEY. I think I would like to ask one of our people what the latest figures on that are. By that, are you referring to on-site labor, Congressman? Mr. TALLE. Yes. Mr. FOLEY. I am sorry I do not have it in mind at the moment. Apparently no one else here has an exact figure. I am told that on-site labor, before the war, was 30 percent. The difficulty, of course, is in dividing labor as you go back down the line. Mr. GAMBLE. Did you say on-site labor? Mr. FOLEY. Yes. Mr. GAMBLE. It was 3212 percent last year, I think. Mr. FOLEY. That was about the figure that I had in mind, Congressman. I was going to say 34 percent. It would be approximately that. Mr. GAMBLE. I think someone in the building trades stated it was around 33 or 34 percent. Mr. FOLEY. Thirty-four percent was the figure I had in mind. Mr. TALLE. And did you have in mind to look into both of those two broad factors to see what could be done in the case of both of them, to bring costs down? Mr. FOLEY. That is true, sir. We hear a great deal about what causes costs to be high in building-restrictive practices, inefficiency, undue profits, and so on. It has been my feeling, and I think everyone else's feeling who is familiar with the situation, that we are not going to bring the costs down with some few big cuts anywhere, but by the accumulation of many small savings and that would require a very careful examination of all phases. The CHAIRMAN. Will you yield to me, Mr. Talle? Mr. TALLE. Yes. The CHAIRMAN. There is a very important document of the Housing Congress of America, on page 45, with respect to labor costs. They have the statement, reported by Mr. Gray in support of his concession that the percent of on-site labor cost in construction varies from 29 to 34 percent of the total cost and has not changed substantially. Mr. FOLEY. The report and I were in agreement, then. Mr. TALLE. That is all for the moment. Mr. FLETCHER. Mr. Chairman. The CHAIRMAN. Mr. Fletcher. Mr. FLETCHER. In your study of the whole field of public housing, did you endeavor to find any alternative to the program by which the Government could own the house and rent to those who could least afford? I have given some study to the Government having a private contractor build these houses out of materials which would stand a long-term loan, 50 years, let us say, using an interest rate of something approaching the present Government bond rate, and not renting but selling to these people who can least afford to own a home, and selling therefore on a basis which would be comparable to what they would be able to rent them for under the proposed plan as contained in this bill. Has your Department given any study to any alternative plan, say, home ownership, giving these people home ownership, rather than allowing them to just continue living in a Government-owned house as a ward? Mr. FOLEY. Yes, Congressman. Fundamentally, I think our objective constantly must be to broaden the opportunity for home ownership, at all income levels, and again various of the proposals of this bill are aimed in that direction. It remains true, however, that under our present set-up, there are and probably will continue to be a great many families for whom it is impractical, if not impossible, to assume home ownership. And so a plan built solely around the possibility of making a purchase of a home available would not solve the total problem. Mr. FLETCHER. But if they could afford the rent, which would be greatly reduced as compared to the economic rent, on the basis of which I am speaking, they could also afford to purchase the home at that same rent. Worked out on a long-term plan, at a low interest rate, you will reach the same point, and give them something that they would not have otherwise and you will also prevent something taking place in this country which I think will deteriorate the moral fiber of the country, which is socialized housing. Mr. FOLEY. What you are discussing, Congressman, of course, is an effort to find another method, an alternative, or perhaps a supplemental method, of providing public aid without public ownership and management. Mr. FLETCHER. Yes; I think that management would be a very important item. Not only do we build these, but for many, many years we must maintain a very expensive management. Mr. FOLEY. It has seemed to me, and I have publicly stated before the committees of Congress many times in the past, that we should all be seeking, eventually, to find some praticable method which would contain the assurances that the objectives sought to be served by the housing would continue to be served, but whereby we can at least limit the growth of the necessity for public ownership and manage ment. Now, what you are suggesting certainly seems to me to be worth exploring. It would seem to me again only to solve a part of the problem, but in solving a part of the problem, it would be desirable. But in the meantime, as I stated in my testimony, we have not developed any other method. This one has worked reasonably well up to now, so it is proposed that it be continued, in what is, after all, a relatively moderate program as compared to the total possible needs. Mr. FLETCHER. The plan which I suggest would have the advantage of keeping these properties on the tax rolls in these various localities. Furthermore, I believe that the cities and States would be willing more readily to assist under such a plan. Because they could make contributions, perhaps of land, which the city or State owned-there are so many possibilities there. |