Progress is more rapid now, and it is estimated that we shall have about 16,400 additional units by the end of 1948, a total by that time of 30,000 units or 55 percent of the 54,000 units estimated. The Federal Housing Administrator for the New York area has prepared charts which indicate the number of new dwelling units provided under sections 203, 603, and 608 of the Federal Housing Act and also the number provided under the FHA rental-housing program pursuant to section 608 of the act. These graphs are shown in exhibit A. With regard to the anticipated semipublic redevelopment company housing by insurance companies and savings banks, the original program called for 16,000 units. By the end of 1948 such projects will actually have furnished about 17,000 units. This phase of the program, however, was expanded by us in October 1946 to 21,000 units. Many factors have hindered its realization, including increases in construction costs, difficulties of moving tenants to comparable apartments elsewhere, etc., because of which some savings banks and other financial institutions have postponed their projects indefinitely. A bright spot in the redevelopment field is the record of the Metropolitan Life Insurance Co., which has completed Riverton in Harlem and is now well along on Stuyvesant Town and Peter Cooper Village on Manhattan's lower East Side. Riverton will provide 1,232 apartments for about 3,500 people. Peter Cooper Village and Stuyvesant Town will provide a total of about 11,250 apartments for about 31,000 people. The slum area cleared for these three projects totals over 100 acres. The total cost of these projects is over $130,000,000. The city provided partial tax exemption for Riverton and Stuyvesant Town. This kept the rental figures down to $14 per room per month for Riverton and $17 for Stuyvesant Town. Originally the figures were $12.50 for Riverton and $14 for Stuyvesant Town. Increases in construction costs, which amounted to almost 50 percent, required amendment of the original agreement between the city and the Metropolitan Life Insurance Co. to permit the higher rental figures. It should be added that the New York Life Insurance Co. and the Equitable are also building on a large scale in spite of price and other discouragements. The savings banks, as distinguished from the life-insurance companies, with a few exceptions such as the Bowery Savings Bank of New York City, have greatly disappointed us in our attack upon the housing problem. I refer to both equity investment and mortgage loans. The fault is largely but not altogether with the banks. The regulations of the Federal Deposit Insurance Corporation and of the State banking department have encouraged large reserves and thus have driven more and more savings bank capital into Government bonds. At the same time the savings banks, with few exceptions, have clung tenaciously to their demand for 4-percent interest on mortgage loans and have thereby discouraged cooperative, limited dividend, and even speculative housing. In the field of permanent public housing for persons of low income, our minimum program anticipated 34,500 units. These were to be established in 24 projects-2 city projects, 1 Federal project, Jacob Riis houses, under the existing Federal laws and a financial contract, and 7 Federal projects under the TaftEllender-Wagner bill, and 14 State projects. It should be remembered that the city makes a substantial financial contribution, in the form of tax exemption, cash subsidy, and related improvements to these Federal and State projects. This portion of the permanent program has lagged in spite of our efforts to speed it up. Only 11,000 units will be ready by the end of 1948. Eventually, under improved administrative arrangements, its realization is expected except as to the new federally aided projects. Funds for these projects have failed to materialize. Besides seven originally proposed Federal projects providing 7,500 units, an additional 22,500 units were anticipated if the Taft-Ellender-Wagner bill became law, or 30,000 units in all. Increased costs would now cut this Federal total of 30,000 back to 20,000, but even these are not in sight. The federally aided portion of Jacob Riis houses, which had been contracted for with the Federal Public Housing Administration, would not have been built if the city had not guaranteed funds for its completion. The Federal Public Housing Administration was not permitted to finance the project pursuant to its contract because construction costs per room exceeded the allowable legal limit fixed by the Federal Housing Act of 1937. It required the enactment of a special law by Congress this year to enable the Government to fulfill its original obligation and only to the extent of the original cost limits, thus requiring the city to contribute $4,000,000 to complete the projects. The State program is expected to be realized eventually. The State housing commissioner contracted to finance 13 new State projects and tentatively agreed to six additional projects, but rising construction costs threatened these six additional projects. At my request, Governor Dewey asked the State legislature to authorize a vote of the people on the question of additional State housing funds in the amount of $135,000,000. The vote was favorable. Of this amount $120,000,000 is earmarked for New York City and will be used to construct the six additional projects tentatively agreed upon which would provide somewhat in excess of 10,000 units. The people also voted affirmatively on two other propositions relating to housing. One of these propositions permits increasing the aggregate amount of State subsidy contracts entered into in any one year from $1,000,000 to $1,500,000. This will allow scheduling of a greater amount of work each year. The other increases the aggregate amount of State subsidy contracts outstanding at any one time from $9,000,000 to $13,000,000. This subsidy will support a total of $435,000,000 of loan funds. It is common knowledge that since the end of the war, the shortage of equipment and materials, has been one of the big bottlenecks in housing construction. This was due partly to repairing and replacing worn-out equipment in mills and manufacturing plants. Shortage of certain materials also caused delay. This situation is correcting itself now except as to local stringencies and a general lack of steel, soil pipe, and plywood. Another new and very difficult obstacle in the way of slum clearance and new permanent construction in old areas is that of moving tenants to satisfactory substitutes for their present homes. In this connection it must be remembered that we are compelled to clear sites for hospitals, schools, playgrounds and other urgent city improvements as well as for new housing, and that there is a limit to the amount of disruption of city life which can be tolerated at one time. The cost of moving and rehabilitating closed buildings is a new factor in the public construction business. The housing emergency in New York City is still undeniably acute. The city still needs the full amount of anticipated Federal public housing money required to finance the 20,000 units expected to be built under the Taft-Ellender-Wagner bill. Pressure for additional permanent public housing has been so great that, despite New York City's financial difficulties, we have initiated an additional program of six veteran housing projects, five of them on vacant land, to rent at $12.50 per room per month, entirely financed by the city, at a cost of $63,000,000. This program is expected to furnish 5,700 dwelling units in 1949. In anticipation of passage of the new Taft-Ellender-Wagner bill at the beginning of the new congressional session of 1947, we prepared a list of top priority projects in New York City. At the head of the list we put the seven projects which, as hereinbefore stated, we specifically selected and proposed under the original Taft-Ellender-Wagner bill. These projects included additions to four existing housing projects and three new ones. I hope that Federal assistance will be made available for these seven projects. If you contemplate reducing the original program, may I recommend to your Committee that a separate Federal public housing bill be passed which will at least take care of the additions to four existing and wholly inadequate projects, namely, Vladeck houses in lower Manhattan, Kingsborough houses in the Bedford-Stuyvesant section of Brooklyn, South Jamaica houses in Queens and Brownsville houses in central Brooklyn. These additions would cost approximately $62,000,000 at present prices, would add 6,100 additional apartments, and would care for approximately 25,000 additional people. Exhibit B shows the locations. Exhibit C is a proposed bill to carry out this recommendation. May I further recommend that the provisions for public housing funds be separated from the other provisions of the Taft-Ellender-Wagner bill so that they will not become involved with other and entirely different issues. I also strongly urge that the top limit of the construction cost per room in the existing Federal law be advanced to allow for further recent increases in building costs. Room cost limitations in the Taft-Ellender-Wagner bill should be raised an additional $250. This would mean that the ceiling would be $1,750 per room, plus an additional $250 with special approval of the Housing Administrator, except for Alaska where a construction cost of $2,200 per room is already provided. If provision for these increases is not made, the bill should provide that any costs in excess of present ceiling of the Taft-Ellender-Wagner bill may be made up by the local government. Otherwise, available Federal money may not be usable at all, as in the case of Jacob Riis houses previously referred to. A proposed amendment to this effect is attached as exhibit D. I should also like to recommend strongly, additional Federal guaranties for veterans' loans, especially for multifamily cooperative housing projects. The city and the State of New York will find it much easier to stimulate such projects under limited dividend and redevelopment laws if the Veterans' Administration were permitted to guarantee real estate loans to veterans on the basis of $6.000 per apartment instead of the present $4,000, and to make a single guarantie of loans to an entire multifamily veterans' cooperative project. I strongly urge that such legislation be adopted. A proposed bill to this effect is attached as exhibit E. The city is here asking Congress for the absolute minimum to cope with a postwar legacy far beyond the resources and capacity of local governments. We have already strained our credit to the limit and reduced other requirements to demonstrate our sincerity. The State has gone a long way to help. Congress should not let us down when we ask for so little. Very truly yours, Exhibit A (six charts following) EXHIBIT A WILLIAM O'DWYER, Mayor. CUMULATIVE DOLLAR AMOUNT OF MORTGAGE FINANCING SECTION 608 VETERANS EMERGENCY HOUSING PROJECTS |