GENERAL HOUSING MONDAY, MAY 17, 1948 1 HOUSE OF REPRESENTATIVES, COMMITTEE ON BANKING AND CURRENCY, Washington, D. C. The committee reconvened at 10 a. m., pursuant to adjournment, Hon. Jesse P. Wolcott (chairman) presiding. Present: Messrs. Wolcott, Smith, Talle, Sundstrom, McMillen, Buffett, Cole, Hull, Banta, Nicholson, Spence, Brown, Patman, Folger, and Buchanan. The CHAIRMAN. The committee will come to order, and we will proceed with the hearings on S. 866 and related bills. We have with us this morning Mr. Alfred K. Stern, chairman of the housing committee of the National Wallace for President Committee; is that correct, Mr. Stern? Mr. STERN. Yes, sir. The CHAIRMAN. We are very glad to have you proceed, Mr. Stern. Mr. STERN. Thank you, sir. Mr. SMITH. Mr. Chairman, could we have the witness' background? The CHAIRMAN. Mr. Stern. Mr. STERN. Do you wish me to give that? The CHAIRMAN. Yes. Dr. Smith suggests that you give the committee some of your background. Mr. STERN. I gave Mr. Hallahan a statement containing the background of both Mr. Colloms and myself. The CHAIRMAN. That may be placed in the record. (The document referred to is as follows:) ALFRED K. STERN Harvard University-class of 1921. Officer and trustee of Julius Rosenwald Fund for 10 years; school units for Negroes constructed under his supervision costing $15,000,000. President of the Michigan Boulevard Garden Apartments Corp. Constructed a $3,000,000 housing project in Chicago 1928-a sound business venture financed by Julius Rosenwald which, however, proved the limitations of private capital in this field. Chairman, 1931-32, of the Large Scale Operations Committee of President Hoover's Conference on Home Building and Home Finance. Vice president, 1933-36, of the National Association of Housing Officials. Chairman, 1931-37, of the Illinois State Housing Board and consultant to the Federal Public Works Administration. Studied the housing problem in England, France, Germany, and Austria. Member for 10 years of the board of directors of the Citizens' Housing and Planning Council of New York. For many years a member of board of directors of the National Public Housing Conference. Chairman of Emergency Committee on Rent and Housing, 1946-47. Chairman of national rent and housing committee of the National PCA. Active member of National Wallace for President Committee. Yale University-1925. Yale Law School-1927. ALBERT L. COLLOMS Administration, United States Housing Authority, Washington, D. C., 1938-40. In charge of utility rates. Chief of enforcement of rent and consumer goods in the Office of Price Administration in New York City, 1942-46. Chairman of the housing committee of the National Lawyers Guild, 1940–43. Chairman of the Queens County Committee on Rent and Housing, New York City. Representative of the National Progressive Citizens of America and the National Wallace for President Committee. The CHAIRMAN. Proceed, Mr. Stern. STATEMENT OF ALFRED K. STERN, ACCOMPANIED BY ALBERT L. COLLOMS, REPRESENTING THE NATIONAL WALLACE FOR PRESIDENT COMMITTEE Mr. STERN. Congress has broken every housing promise and pledge made to the returning veterans. While millions of them are forced to live with in-laws, in trailers, rooming houses, and even in reassembled Quonset huts, the very huts which housed them during the war, Congress ignores their desperate need. This has truly been a "do nothing" Congress when it comes to housing. One disheartened veteran asked me before I came down here, "How is it this country erected thousands of Army camps and installations in a few months but cannot provide a house I can afford to live in?" This committee is certainly conscious of the total failure to make a dent in the housing need. It does not require a detailed bill of particulars at this time to show the series of steps by which this failure was brought about. A few instances will suffice. One of President Truman's first major acts on the economic front was the lifting of the regulation known as L-41, which had channeled and controlled the use of basic construction materials during the war. A Republican Congress then permitted the complete break-down of all the remaining controls and vitiated the Wyatt program for emergency housing construction with veterans' preferences. What followed was a complete victory for the real-estate interests, the materials industry, and home-financing institutions and a defeat for the people in their housing needs. The control of Congress by the Republican Party as a result of the 1946 elections and its cooperation with the aims and program of the real-estate lobby in a short time completely shattered any hope of a reasonable housing program. Here are the results of the complete elimination of construction controls and the veterans' housing program. Offering prices of homes in New York City have risen to $13,500 as compared with $5,600 ten years ago, the New York Times reported in the Sunday edition of May 9. Furthermore, Department of Commerce statistics show that this $13,500 home only 18 months ago had a price ceiling on it of $10,000. In 18 months the cost of a house has gone up 35 percent. Now construction analysts predict (also as reported in the New York Times) that as a result of the new rearmament and foreign-aid programs, the cost of housing materials are expected to rise 20 to 25 percent further this year. This situation obtains all over the country. I have further statistics to give you which just recently appeared in the Wall Street Journal, if you would like to have them. In Los Angeles the typical buyer is forced to pay more than $14,800 for a home. Federal housing experts report that builder profits per house are now at least $1,500 as compared to a typical profit per house of $500 before the war. One New Jersey contractor informs me that $1,500 is a very small profit on a house these days-that actually he has made as much as $3,000 on a new $13,000 6-room frame house. The average family obviously cannot afford these prices for new homes nor can it afford to pay the excessively high rentals for new apartment houses now coming on the market in metropolitan areas across the country. Typical are monthly rentals of $110 and $120 for three- and four-room apartments in modest suburban neighborhoods. A recent and shocking instance is the new so-called housing cooperative planned for veterans under the banner of the State of New York itself. This is supposed to be a break for veterans. Do you know how much it costs a veteran to get in? It costs him $10,000 for a fouror five-room apartment. A very small percentage of families can afford these excessively high costs. Even this State-sponsored enterprise has been able to secure-according to latest reports-only 105 veteran families to sign up for this project of about 800 suites. This condition is typical of the situation in the country at large. In our great and wealthy Nation you find families in Chicago living in cellars; trailer camps that are beginning to look like "Hoovervilles" surrounding southern cities; children in Detroit crowded into slums and general occupancy of substandard dwellings which, but for the desperate housing situation, would long ago have been demolished. At this very time the British Government, despite severe economic obstacles, has launched a bold and far-sighted program to replace crowded urban conditions with planned, integrated, livable communities for its people. If our junior partner can afford this, why can we not? America's enormous housing need is conceded. Both congressional and other studies indicate a minimum need of 3,000,000 dwellings for families now without homes or apartments of their own and at least 12,000,000 additional units for those living in substandard rural and urban housing. The "one-third of a nation" that the late President Roosevelt singled out as ill-housed over a decade ago, has increased to nearly half the Nation today. In spite of the high rate of construction in the last 2 years, with about 800,000 dwelling units built in 1946, and again in 1947, and with a comparable high rate of construction estimated for 1948, there has been little or no relief to the critical housing problem which President Truman recently referred to as "almost fatal." The reason for this crisis is that there has been practically no effort to build for middleand low-income groups. Less than 10 percent of American families can afford the housing built today. The filtering down theory-about which I am sure you have all heard that was supposed to provide housing for people of moderate means has completely failed. This fact must be frankly admitted. The record over the past generation has amply proved its failure. It has been estimated that at least 90 percent of the benefits of the proposed Taft-Ellender-Wagner bill will supply aid only to high cost and inflated housing, the demand for which is rapidly dwindling. Mr. 75674-48- -40 Colloms will elaborate upon our recommendations regarding specific provisions to the Taft-Ellender-Wagner bill as recently passed by the Senate. The cost to the Nation in human terms-the infant mortality, the increasing juvenile delinquency, crime and disease, the family breakups-although they cannot be measured in terms of dollars, cost this Nation infinitely more than an adequate housing program would cost. It is time we think in terms of an American recovery program in which housing must play a leading role-a genuine American recovery program. Despite every Government aid to provide industry, it has completely failed to meet the need. Private enterprise continually has built only for the topmost income group. The other two-thirds of the Nation are still living in unhealthy, cramped conditions, in totally inadequate temporary shelter or in the outmoded hand-me-downs of another era. These conditions are the result of the restrictive practices of the industry which have limited production of homes, the monopoly control of building materials, the pre-industrial methods of construction, and the high costs of land and money. The Government shares a large part of the responsibility for these conditions. In summary: America came out of World War II with the accumulated deficits of a housing shortage of a generation during which private enterprise consistently built only for the topmost income group. During this period there was little or no improvement of housing for the two-thirds of urban and rural families who represent the bulk of American people. The housing program for the future must provide for these two-thirds of urban and rural families, which private enterprise has not and apparently cannot serve. The National Wallace for President Committee recognizes that conditions referred to in this statement are such that they cannot be remedied unless Congress declares a national housing emergency and the Government assumes the responsibility of providing every American family-regardless of race, creed, or color-with a decent home in a good community at a price or rent it can afford. The responsibility of solving this housing crisis rests fully on Congress. It can no longer evade this responsibility. The National Wallace for President Committee maintains that any Congressman who opposes such a housing program will be held strictly accountable by the people at the polls on November 2. The CHAIRMAN. Mr. Stern, in your statement you do not comment upon the attitude of the National Wallace for President Commmittee with respect to S. 866, which is one of the bills before us. What attitude do you take with respect to that? Mr. STERN. Mr. Colloms has testimony to present regarding specific recommendations to the Committee with respect to that bill. I would be glad to answer any questions with reference to my testimony. I have statistical data with which to confirm these statements. The CHAIRMAN. Will you refer to your statistical data and tell us how you got this statement of 800,000 units the Government built in 1946? Mr. STERN. I got it from the record. The CHAIRMAN. What record? Mr. STERN. This is taken from a Government analysis. Mr. STERN. I took this out of a book. What was the name of it, Mr. Colloms? Well, it is a matter of record. The CHAIRMAN. Where is the record? We have never had this figure before, and you have rather surprised us. Mr. STERN. Well, I am a little low on the 1947 record. I believe it was 853,000 units, as I recall. The CHAIRMAN. I am asking about 1946, Mr. Stern. Mr. STERN. I said 800,000. It is a little higher. 853,000, I think. The CHAIRMAN. 1946? Mr. STERN. 1947. The CHAIRMAN. What about 1946? Mr. STERN. 1946 was 796,000 units, broken down The CHAIRMAN. Where did you get that figure? Mr. STERN. The National Bureau of Economic Research, the Department of Labor and Bureau of Labor Statistics, published in the construction industry in the United States Bulletin 76. Subsequent and current data are published in monthly releases. That is the source of these figures. The CHAIRMAN. Will you leave that for the record? Mr. STERN. Surely. The CHAIRMAN. We have never seen those figures before. There is a difference of 160,000 units between those figures and the figures given to this Committee by the Bureau of Labor Statistics. Mr. STERN. Well, this states 796,000. The CHAIRMAN. We would like to check those figures. Mr. STERN. Very well. I will leave that with you. Are there further questions? The CHAIRMAN. Where did you get the figures showing that onethird of the Nation are still living in poor housing units? Mr. STERN. I do not have to confirm what President Roosevelt said 10 years ago. The CHAIRMAN. He said one-third? Mr. STERN. Yes. The CHAIRMAN. Now, you say, it is two-thirds? Mr. STERN. That is changed by the 10 years of deterioration which has gone on. I have these figures. The CHAIRMAN. If you will pardon the personal reference, my home was built in another era and I was wondering if I was living in a substandard home. I hope that you will not call my wife's attention to that. Mr. STERN. I am sure you are among the one-third that is wellhouse, Mr. Chairman. The CHAIRMAN. In the first place, according to the United States Census Report for 1937, in series P-20-11, of February 11, 1948, it is reported that there were 39,138,000 units in the United States. They are broken down as follows: 24,000,000 urban units; 8,600,000 rural nonfarm units; 7,000,000 rural farm units. These are the figures on which we are basing our estimate. Three million dwellings for families now without homes or apartments that I referred to. We have a figure from the United States Census Report on Household Composition in 1947, based on an April, 1947, sample survey. This showed a total of 3,500,000 subfamiliesand these, I understand, are known as related, but separate family |