Mr. FOLEY. It is not changed. The method of applying it, as I have already outlined, has been changed.

Mr. SMITH. Would you explain what is meant by that language "The term "families of low income' means families who are in the lowest income group and who cannot afford to pay enough to cause private enterprise in their locality or metropolitan area to build an adequate supply of decent, safe, and sanitary dwellings for their ordinary use"? Just what does that mean?

Mr. FOLEY. To me, Congressman, the meaning is reasonably clear in the language itself, as a basic definition. The problem always revolves, of course, around applying it to local conditions. That is where the definition presents its difficulties. Actually in applying it, the policy has been and is not only to determine whether or not, the income such families are able to pay, can result in the building new of an adequate supply, but whether, in new or old, there is decent, adequate supply of housing available for their use. That gives a

better definition.

Mr. SMITH. I do not think that touches my question.

Mr. FOLEY. I am sorry, Congressman.

Mr. SMITH. Does this mean that the housing starts with the people having the very lowest income, and goes on up to cover the program, or where does it start and where does it end?

Mr. FOLEY. It starts, Congressman, as to income limits with the families of lowest income who are applicants in the community, and who are badly housed, to start with, and it ends, under the present setup, at a point determined locally, which is at least 20 percent below what income groups are being served locally with an adequate supply of housing.

Mr. SMITH. Under the United States Housing Authority Act, were the lowest income families provided with homes?

Mr. FOLEY. I am not sure I understand your question, Congressman, but I will answer it as I understand it.

Mr. SMITH. Did the United States Housing Authority Act actually supply houses for the lowest income group?

Mr. FOLEY. Yes, on the basis that I have just outlined to you, and on that method of selection. The admissions are all on that basis, Congressman. What has happened, as I outlined earlier, is that during the war period families that were admitted under that test developed higher incomes and because of the conditions could not be removed.

Mr. SMITH. They have to pay a certain rent. Is it your contention that the very poorest people in the country are able to pay the rent that is required to be paid under the United States Housing Authority Act?

Mr. FOLEY. Without knowing, Congressman, just how poor the very poorest people in the country are, it would be difficult to answer the question. I am quite sure that under the limitations of the act itself, which require certain levels of rent to be set because of limitations upon the subsidy that can be made, there probably are in fact, I am sure there are-persons who are not able to pay even that rent. Such persons, quite frequently, are the ones we find as welfare cases.

Mr. SMITH. You would certainly have statistics covering that point, would you not?

Mr. FOLEY. We will be glad to furnish you statistics, if I understand you correctly, on the level of income, and the experience in connection with income, of those persons who have been admitted.

Mr. SMITH. Yes, but in detail, so that we can understand exactly what we are doing.

I will give you an illustration. You have a statutory limitation on the amount of money a person can earn to be eligible for occupancy in slum clearance projects. I have here some statistics which were furnished by the housing authorities in Willard Park and Lakeview projects, in Buffalo, N. Y. This information was given me in 1939. At that time I wrote to a great many housing authorities in the United States and asked them to set up figures showing just what the income of the people who occupied those homes was and what rent they paid.

I received replies from only two in the United States. I have those two, and they are the ones I mentioned.

Now, families with incomes ranging from $1,606 down to $780 living in those houses represented 62.43 percent of the total number of occupants; down to $780, approximately 82.5 percent; and down to $665, about 94 percent.

Mr. GAMBLE. Percent of what, Doctor?

Mr. SMITH. Of the total occupants in the projects. So that you have left only about 5 percent of the people having incomes under $665. So you did not carry out the provisions of the Act, if the intention was to build houses for the lowest income groups. There are a great many families earning less than $665; there are millions of families having incomes below that figure that are not eligible for this housing. So why do you claim that this houses the lowest income groups when it certainly has not worked out that way in practice.

I have other figures here, but I do not have the time to go into them.

Mr. FOLEY. Congressman, I will be happy to furnish you an analysis of the income levels or persons admitted to public housing in any project you desire. I am sure we can get it.

Mr. SMITH. Could you furnish that for each project?

Mr. FOLEY. I am not sure that we could furnish it for each project very quickly because I am sure we would have to get it from the local housing authority, but certainly for typical projects we could do it reasonably rapidly.

I will be very happy to furnish it for you, sir.

Mr. SMITH. Typical projects may mean one thing and a picture of the whole may mean something else.

Mr. FOLEY. I think we can give it to you so that it will be a picture of the whole, sir.

Mr. SMITH. I do not mean to insinuate that you would select projects especially to satisfy my curiosity, but there is one thing certain: All the evidence indicates that you have not housed the lowest income groups, and I would like to have you present to this committee some proof that that statement is incorrect.

Mr. FOLEY. I will be glad to furnish the material, Doctor.

Mr. SMITH. Your interpretation of this definition, then, is that it means families of the lowest income group?

Mr. FOLEY. In general, yes, Congressman. There are many factors, however, that must be considered besides just dollar income.

For instance, an income, for one family, may be a much more adequate income than the same number of dollars would be for another family. For instance, a couple with a thousand dollars a year have a better income than another couple with four children having the same income.

Mr. SMITH. I understand that, but I do not think that touches the point.

Mr. FOLEY. Well, I believe, Congressman, that it does since the word used is "family's" and I think we must consider the connota

tions in that word.

However, we will be glad to furnish you any and all information on the subject.

Mr. MONRONEY. I think that would also work so that if there were two or three or four in the family who were employed it would disqualify them from accepting low-cost housing.

Mr. FOLEY. It would increase the family income; yes.

Mr. SMITH. Does this language, families of low income, mean families who are in the lowest income group? And then follows this language: "And who cannot afford to pay enough to cause private enterprise in their locality or metropolitan area to build," and so forth. Does that last phrase have anything to do with the part of the definition previously given?

Mr. FOLEY. I think it has a great deal to do with it. In fact, it is the key to it,

Mr. SMITH. In your public statements, ever since the United States Housing Authority Act has been passed, you have continuously harped on the idea that this is housing for the lowest income group and the Nation generally has received that impression. How are you going to square that with this definition?

Mr. FOLEY. I think it squares with it, sir; and we will be glad to furnish you the data.

(The material referred to is as follows:)

Net annual income of families moving into developments under original U. S. Housing Act, by race,1 1946-47

Includes Public Law 412 and PWA projects except in Puerto Rico and Virgin Islands.

Source: Housing and Home Finance Agency, Public Housing Administration.

75674-489

Mr. SMITH. But can you not state how it squares with it?

Mr. FOLEY. I have already, I think, stated it, sir. I will repeat it, if you wish.

I do not think you can take just a dollar amount and thereby decide whether it is the lowest income family, with reference to its housing needs, unless you know a great deal more, unless you know what is its housing need, and unless you know where the family is and what that amount of dollars will buy in the community or area

where it is.

Quite possibly a family may have only $500 a year income and be possessed of a very acceptable home.

Mr. SMITH. Is it not a fact that all these people who apply for tenancy in United States Housing Authority projects must earn a certain amount of money before they can be admitted to them?

Mr. FOLEY. I do not believe there is, in any statement of policy, an instruction of the kind that I understand you to be making reference to, Congressman.

I will ask Mr. Egan whether there is anything that requires that people must be earning a certain income before they are admitted. It is rather an upper limit than a lower limit, is it not?

Mr. EGAN. That is right. As a matter of fact, Mr. Congressman, there is no low limit for admission. For instance, a family may have absolutely no other income and get relief, and could be admitted. We do not look at the source of the income. There is a certain minimum rent that would have to be paid. But from what source it would be supplied

Mr. SMITH. We are not talking about the source at all. You fix your rent and only people capable of meeting the minimum rent are admitted; is that correct?

Mr. EGAN. The minimum rent; yes, sir.

Mr. SMITH. Therefore, you do have a means for determining that only people with certain incomes, from a practical standpoint, can be admitted to these structures.

Mr. EGAN. That is correct. We set the rent.

Mr. FLETCHER. What is the minimum rent?

Mr. SMITH. The minimum rent varies.

Mr. FLETCHER. But the lowest minimum rent in the country, what is it?

Mr. EGAN. The minimum rent is the rent that you can set with maximum subsidy.

Mr. FLETCHER. Actually, throughout the country, what is the minimum rent set at?

Mr. EGAN. It averages, around the country, about 8 to 10 dollars. Mr. FLETCHER. Thank you, sir.

Mr. GAMBLE. That was the amendment Senator McCarthy tried to get into the bill, was it not, to take care of people having an income less than those capable of paying the minimum rent? Do you recall that in the debate in the Senate?

Mr. FOLEY. Are you speaking to me?

Mr. GAMBLE. I was speaking to Mr. Egan.

Mr. EGAN. I think there was some discussion on that. I think Senator McCarthy was figuring that we should even get more subsidy to get down to the very bottom rent, practically-I do not know what

figure he had in mind, but something evidently below 5 dollars, we will say.

Mr. GAMBLE. I know there was a discussion of welfare rent. I have not read all of the debate. But you fix your minimum rent as determined by the amount of subsidy you have. If the maximum subsidy will not let you rent to a person who has an income of $500 it might take care of a person who has an income of $650.

Mr. EGAN. That is correct.

Mr. GAMBLE. So the maximum subsidy is the determining factor, is it not?

Mr. EGAN. That is correct.

Mr. FOLEY. Mr. Chairman, I think it might help the Committee if Commissioner Egan should take the stand. It would probably expedite the matter, since I do not pretend to know all of the details of the operation.

Mr. SMITH. Just one more question.

Houses that would be built, Mr. Foley, under title VI of S. 866, would, in effect, be nationalized, would it not?

Mr. FOLEY. I am quite sure I do not understand your question, Congressman. Would you repeat it?

Mr. SMITH. The houses that would be built under title VI of S. 866, would they be nationalized?

Mr. FOLEY. I do not believe so, sir. I would not so define it myself. They would be under public management and ownership and control, but that would be local rather than national.

Mr. SMITH. Is it your contention that this is actually owned and operated by a local housing authority?

Mr. FOLEY. That is correct, sir.

Mr. SMITH. The Federal Government has nothing whatsoever to do with the project, then, except to do what? Make loans? Is that all the interest the Federal Government has in those projects?

Mr. FOLEY. No, sir; and everything I have said up to now, I am sure, states the contrary. Addressing myself to your question as to whether they are nationalized, I stated that since the ownership is local, and the management is local, I did not consider them to be nationalized.

In order to carry out the purpose of the Congress in the legislation which it has passed hitherto authorizing such projects, certain provisions are made for audit, for seeing that the original contracts entered into protect the low-rent character of the project-in other words, that the objective of the Congress, in providing this authority, is carried out.

To my way of thinking that is not nationalization, Mr. Congress

man.

Mr. SMITH. The Federal Government pays annual contributions sufficient to cover the cost of the project; is that correct?

Mr. FOLEY. Sufficient to make up the difference between the moneys necessary for the operation and the debt servicing, and the net yield, which is lessened because of the low-rent character. That represents the amount of subsidy that is paid annually, and that, of course, has varied from the first year, when it was, in the first projects, about 100 percent of the maximum that it could be under the law, down