Thank you, Mr. Chairman. The CHAIRMAN. Thank you, sir. Mr. SNYDER. Thank you very much, Mr. Chairman. The charts that I used this morning, with your permission, I am going to have photographed and, if I may, I would like them inserted as a part of the testimony. Just the three charts. The CHAIRMAN. If they are in such condition that they can be inserted, without objection they will be inserted. (The charts above referred to have been distributed to the Committee and made a part of committee file.) Mr. BUCHANAN. Mr. Chairman, Mr. Edward R. Carr would like to have an article which is in the January 1948, National Home Builders magazine included in the record. The CHAIRMAN. Without objection, that will be done. (The document above referred to is as follows:) FOR A NATION-WIDE EXPOSE OF PUBLIC HOUSING! (By Clarke Daniel, advisory director member, Public Housing Committee) Using our study and comparison here in Washington as a springboard, let's inaugurate an exposition of the waste, extravagances, excessive costs, maladministration, and unsound building practices of public housing in cities throughout the United States. Let's educate the people to the fact that public housing spends more money than private enterprise to develop projects, and that public housing deteriorates in most cases far more rapidly than do private projects. Let's point out to the home owner that his local taxes are higher because public housing does not pay full taxes, yet all municipal services must be supplied, and that every time a new project is added his local tax goes up just that much. Let's reveal that appropriations of millions in annual Federal subsidies to make up the deficits of local housing authorities add that much to Federal taxes; that the economic rents of public housing are generally higher than private rents for comparable accommodations in spite of subsidies. Few citizens realize what public housing is doing to the country. Unfortunately, many builders and realestate men don't fully appreciate the consequences. The houses pictured on the next page' would be referred to by many as substandard. They are poorly constructed, improperly ventilated, unsanitary, cold, and damp. Appropriate as this description may be, you are looking at pictures of the Stoddert dwellings public housing project (financed over 35 years, located on Ridge Road, Southeast, near Minnesota Avenue. The pictures were taken on September 30, 1947). No, the project is not 30 or 40 years old. The first units were not completed until January 1942 but all were finished by March 1942. Yet last September a complete overhauling job was necessary on practically every unit. Typical of the repairs required were replacement of the sills, center girder, joists, and subflooring. The principal reason for the rapid deterioration is that Stoddert dwellings were constructed without regard to sound building practice or District of Columbia building codes. The erection of the units too close to the ground prevented proper ventilation and resulted in decay of the substructure. In addition the grade was such as to impound water under the units. Builders throughout the country are working feverishly to produce the housing for which there is a demand and yet it is necessary to use valuable materials to repair projects improperly constructed under the direction of the public housers. Tenants interviewed on the site described their homes as "cold and damp," stated it was possible "to hear every time the neighbors in the next apartment sneezed" due to the cardboard-style walls and further said, in reply to questioning as to the possibility of sale of the units: "we wouldn't buy these houses even if we had a chance to do so, and don't want any of our friends to get stuck with them. We are going to tell any prospective buyer just how we fell." As one picture shows, drainage around some of the houses was obtained by means of ditches in the backyards. The resulting stagnation caused a highly disagreeable odor. This condition has now to a certain extent been remedied. 1 Pictures deleted. One of our association committee members, conducted the staff of the Senate Expenditures Committee on a tour of public housing in the District of Columbia and compared private-housing developments built at approximately the same time with the public. During the tour of Stoddert dwellings many workmen were repairing the buildings. One was asked, "Do you think that after the repairs are made they will last for 35 years?" He replied, "How can they, I ask you how can they? Naturally you will have the same trouble again in a few years because the defects have not been remedied." A spokesman for the National Capital Housing Authority on the site answered the same question differently by stating "I believe so" (meaning in his opinion they would hold up for 35 years). The NCHA representative pointed with pride to the aluminum used to reface the lower part of the structures and said it didn't cost anything because it was obtained from the Federal Public Housing Authority through War Assets Administration. It was significant that a member of the Senate Expenditures Committee staff then remarked that whether it came from War Assets or not it still had been paid for by the taxpayer. Stoddert Dwellings was constructed under authority of the Lanham Act. The total cost for 200 of these units was $908,000. Financing is over a period of 35 years. The rents were set up on the basis that the project would last 35 years. Yet after only 6 years of existence, the first major overhaul job has already been completed and anyone inspecting Stoddert Dwellings will be immediately convinced that it will not last anything like 35 years. The shorter the life, the greater the loss to the taxpayer and the Federal Treasury. Typical of the extravagance surrounding Stoddert Dwellings was an expense item of $9,943.59 for field inspection. Please bear in mind this amount was paid for the inspection of 200 units like the ones shown in the accompanying photos. If there were no inspection it would be difficult to believe these houses would be in worse condition today. However, a most satisfactory inspection could have been obtained for only a fraction of the amount spent. John Ihlder, executive officer of the National Capital Housing Authority, justifies the high cost and disregard of building codes in the construction of Stoddert Dwellings, as a war measure, and says it was necessary to get the housing. This position is particularly difficult to uphold inasmuch as the contract for Stoddert Dwellings was awarded months before Pearl Harbor. In addition, the Greenway Apartments located just across the street were also constructed in 1941 by private enterprise at a substantially less cost per room than Stoddert Dwellings. Greenway units are modern, brick, first rate, fireproof, centrally heated structures with many architectural refinements and appointments and are in excellent condition today. Stoddert Dwellings are little better than frame shacks although the construction cost was $1,107 per room, whereas Greenway was built for $849 per room. Why should the NCHA be permitted to justify the excessive cost and improper construction of Stoddert Dwellings as a national defense measure when the private builder erected substantially superior accommodations across the street in the same year at a much lower cost? Greenway apartments have distinctive architectural design and many refinements such as parquet floors, tile baths, casement windows, and attractively landscaped grounds. Stoddert Dwellings has been the scene of many fires and is constructed with inferior materials throughout. Comparisons such as Stoddert Dwellings and Greenway are possible in every city where public housing is located. We have made numerous similar comparisons here in Washington. With Congress now seriously considering authorizing the appropriation of $7,000,000,000 more to be spent on public housing we should attempt to wake the people up before it is to late. A service will be rendered to the Nation if we can prevent passage of this gigantic measure to plunge the country into state socialism. Probably the best way to stop the WET bill would be to show how the previous sums appropriated for public housing have been squandered. This can be done by builders and real-estate men in all communities of 100,000 and over by contrasting public and private housing. It will be of little value, however, unless wide publicity can be given to your findings in your local papers. Then let the Washington Home Builders have a copy of your report. Here are a number of suggestions to be used in contrasting public and private housing and in exposing the deficiencies of the former: 1. In making selections of projects to compare, be sure that the circumstances surrounding the public and private project are similar; construction should be in the same year; if possible they should be located adjacent to each other but if this is not possible they should not be more than a few blocks apart. 2. Contrast the construction costs. In each case we studied the public housing costs were much higher, and if allowances were made for the difference in the type of accommodations furnished, public housing costs were noticeably higher. You will, of course, have no difficulty in obtaining cost break-downs of private developments. If you run into trouble with the public housers when you request the same information from them, we will be glad to cooperate. The cost of public housing is an open public record, and you should have no trouble. 3. Compare the rents of the private project with that of the public. In the latter be sure to add the proper amount necessary to cover tax-exemption, subsidy, and 60-year amortization (35 years in the case of Lanham Act housing and on which there is no subsidy). In many instances public housing is heated by individual space heaters and, therefore, the price of the coal should be added to the rent. Also, make allowance for the type of accommodations received. Our surveys show public and private housing rents to be about the same if allowance is made for tax-exemption, subsidy, and 60-year financing, yet the public housing units are far inferior. 4. Invite attention to excessive architect and inspection fees as well as to other questionable expenditures. For example, the architect's fee for the 796 units in the Greenway private housing project was $10,000 whereas the architect's fee for the 313-unit Frederick Douglass public housing project was $61,000. 5. Publicize the disregard of minimum building, health, and sanitary codes in the construction of public housing. This can be done most effectively by comparing the condition today of the respective public and private projects built at the same time. The indifference toward building codes has in most instances resulted in the walls separating from the floor, leaking walls, rotting floor joists, and many other examples of deterioration. 6. After your findings are complete, plan to conduct a party of leading citizens on a tour of inspection of the projects so that your effort will bear fruit and the investigation will receive public attention. Here in Washington we took the Senate Expenditures Committee staff on the tour and made our findings public in a letter to Senator Aiken, chairman of the committee. To further illustrate the type of comparison suggested, let's contrast two other projects here in Washington which were part of our survey. They are the Skyland Terrace private housing development and the Frederick Douglass public housing project. Skyland Terrace was constructed in 1939 (in Washington 1939 building costs were about the same as in 1941. 1940 costs were higher than 1939 or 1941), is of good-grade brick, has a central heating plant, and is in excellent condition today. The cost of construction per rental room was $1,035.74 which includes the land, the shopping center, the tenant's recreation room, and landscaping. The project is amortized on a 25-year basis. In addition to being built to District of Columbia code requirements and in accordance with sound engineering and construction principles, there are many refinements and fixtures of quality such as parquet floors, tile baths, fully equipped kitchens, large airy rooms, distinctive styling and architecture, and most attractive landscaping. Our inspection group was unable to detect the need of any repair work whatsoever at this time. There was no evidence of leaking walls inside or brick separating from the cement on the outside. An excellent job of maintenance was apparent. The unit visited, which was selected at random, had been most satisfactory, according to the tenants, and they had no complaints. It was a 2-bedroom apartment renting for $64 per month. This figure included heat and water but not electricity. Although financed over 25 years, it is obvious that this development will continue as well above standard housing for much longer than 25 years. Only a few blocks from Skyland Terrace is the public housing project known as Frederick Douglass. Constructed in 1941, the apartments are chiefly of frame with some half masonry buildings. There are 313 units in all, and the cost was $1,120 per rental room, including land. Amortization is for a period of 60 years. On approaching these apartments, it was immediately apparent that the grounds were not properly maintained and all units were in need of paint. Most of them were very badly in need of paint. Tenants said that the rooms were quite drafty. This was undoubtedly due to no weather stripping and dislocated windows. In the unit inspected (again chosen at random) the floor beams on the first floor were apparently sagging at the outside walls, causing floor to separate from walls. The plaster was in lamentable condition. There was need of complete interior overhauling. These findings make it impossible for the maintenance fund to care for the project. The fund is only adequate to rebuild one-third in 60 years whereas the present down-grade trend would indicate that in all likelihood it would have to be more than rebuilt completely in 60 years. Typical of the extravagances in the construction of Frederick Douglass was an architects' and engineering fee of $61,000 paid for plans and specifications. This fee is over and above the cost of a fully staffed architectural and engineering group maintained by the public housing authority. No central heating is provided and space heaters are used in the living room. All utilities are furnished but not heat. This necessitates each tenant purchasing his own coal. A two-bedroom unit rents for $40.50. Conversation with the tenant of the unit which was inspected indicated that the cost of coal per month on a year-around basis would be approximately $5 per month. This would bring the rent to $15.50. To this must be added other amounts for tax exemption, Federal subsidy and 60-year amortization and thus the rent would be the $64 or above received by Skyland Terrace for the same amount of space for a unit built over a year earlier by private enterprise. Although the rent is greater, the accommodations are nothing like comparable. Most tragic of all is that even these subsidized-tax-exempt rents were set up on a 60-year basis and the units can't possibly maintain these rents for anything like 60 years. After being in existence only 6 years (54 to go), Frederick Douglass is rapidly becoming a slum area and no doubt within a few more years it will be just as bad as the slums which the public housers have claimed they would eliminate. It was on the basis that slums would be cleared and not created that they were given large sums of public money. Summarizing, you have Skyland Terrace, a private development in excellent condition today, having been built in 1939 at substantially less cost per room than the Frederick Douglass public housing project of vastly inferior construction, built over a year later which needs a complete overhauling job. In addition to being economically unsound, public housing has drained off materials critically needed for private enterprise housing. We've started the ball rolling here in Washington to expose public housing. How about keeping it going? The CHAIRMAN. We have now Mr. George Fuller. We are very happy to have you proceed, Mr. Fuller. STATEMENT OF GEORGE M. FULLER, VICE PRESIDENT, NATIONAL LUMBER MANUFACTURERS ASSOCIATION Mr. FULLER. My name is George M. Fuller. I am vice president of the National Lumber Manufacturers Association, which is a federation representing 15 major regional, species and product lumber manufacturing associations in the United States. I appreciate the opportunity to appear on their behalf before this committee considering housing legislation. The lumber manufacturing industry is not motivated by any dollars-and cents self interest in opposing S. 866. Lumber will be sold regardless of who builds the houses. We oppose this bill because we are motivated by philosophical and patriotic self-interest. We believe that it will not be to the best interest of the United States. Historically we have learned that Government agencies, by their interpretation of statutes placed on the books by Congress, frequently fail to appreciate the theme and the motive that inspired Congress to write the law, and their interpretations in some instances have gone beyond the original intent of Congress, and coverage and definition of policy have been expanded. For this reason we feel that section 2, which is the policy declaration, should be carefully scrutinized. as certainly, the administrator of any public housing law of this kind is permitted sufficient latitude by the ambiguity of this declaration of policy to go far beyond what most people believe is in this bill. We wish to confine our remarks to section 2 of S. 866, which sets forth a declaration of housing goals and policies. There is danger in stating this goal in terms of a national promise. There are a great many people in this country who have a sublime faith that if Congress makes a declaration of goals and policies, as in the present instance, that the stated goal will be promptly achieved. This is, indeed, a tribute to the Congress of the United States, but it also imposes a tremendous responsibility. Let me say, that if you write the housing goal of S. 866 into law, you will find that those very people who are now urging passage will soon be back, blaming you for not solving the housing problem-for not having provided a "decent home and a suitable living environment for every American family." That is the danger in the goal. But the policies are equally misleading. For, not only can the goal never be achieved-it being an economic axiom that human wants are insatiable-but the steps proposed by the bill to approach that goal will actually retard rather than hurry us along to better housing in America. Section 2 sets forth three policies to be followed in attaining the national housing objective. I wish to comment on each of these. The first and second policies relate to private enterprise. First it is stated, "private enterprise shall be encouraged to serve as large a part of the total need as it can;" and second, "Government assistance shall be utilized where feasible to enable private enterprise to serve more of the total need." Today, private enterprise is producing housing at record levels. Production and manpower capacity are being utilized to the maximum extent. There is no way that larger production can be legislated. Private enterprise is straining to increase production, and every means is being employed to achieve larger and larger production volumes. Private enterprise is now and will always aim to serve as large a part of the total demand as it can. "Total need," which is the phrase used in the bill, is a completely different story. The concept is infiltrating into the approach on many problems, not housing alone, that need, not economic demand, must be served. The Government is being asked to grant credit on the basis of need, to loan funds on the basis of need, and to make outright grants on the basis of need. Need is rarely defined. In some instances it seems to consist in giving to certain groups in the country the comforts and advantages which a large body of citizens have obtained for themselves through hard work, self-denial, and saving. Aid given to one group is followed by a flood of demands asking for equal treatment for other groups. Provision on the basis of need in one segment of the economy only leads to demand after demand that Congress should make similar provisions in other segments of the economy. Private enterprise will serve total demand best by having a political and economic climate in which to operate which is free from paternalism. Let private enterprise have real competition. Let it undertake the risk of enterprise. That is the way to foster a strong, alert, active industry wherein competition compels a never-ending search for ways to lower cost. The third policy to be established by this bill is set forth in seven short lines. In 50 words the Government is committed to a vast slumclearance and housing program, which in the words of the bill is to be extended to those localities which estimate their own needs and demonstrate that those needs cannot be met through reliance solely upon private enterprise and upon local and State revenues. |