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around $70 a thousand. They could not get very much help under this kind of a bill, could they?.

Mr. VOORHIS. Why not?

Mr. NICHOLSON. Because, in the first place, on a $10,000 house they would have to pay $700 in taxes. They would have to pay 3 percent, at least, for their mortgage. They would have to pay insurance on the house when it is brand new, and a fellow would have to make an awful lot of money before he could start to build a house in Boston.

Mr. Voorhis. Of course, that is a Boston problem and one that neither I nor the Congress can solve.

Mr. NICHOLSON. So this kind of a thing would not help out too much a city or a town that had tax rates like that to pay.

Mr. Voorhis. The Boston people think it would, and I have talked to a great many of them. They seem to think it would help a great deal. They seem to think that it would bring a whole lot of folks into the market for housing that are not now an effective part of that market. I just don't know what the tax rates are, and I am not, therefore, in a position to comment on it.

Mr. NICHOLSON. A bill like this wouldn't help them any, would it?

Mr. VOORHIS. I think it would. I think it would help them very much. Certainly the tax rate isn't going to be any worse if the bill is passed than it is now.

Mr. Chairman, could I give out these books, as far as they will go.

Mr. MULTER. Before you do that, let me clear up this subject of Swedish subsidies. In Sweden there are two types of subsidies, one called the rent subsidy made to the families, rich or poor, on the basis of number of children, so much per child, and it is applied against rent. It is paid to everybody and anybody so long as there are children in the family. It has nothing to do with housing or cooperatives. It is based on the number of children. It is intended to encourage large families.

Another type of subsidy they are granting in Sweden is a so-called fuel subsidy which is granted to make up the difference between the cost of fuel, because the fuel supply is so short and they could not buy their fúel unless the Government stepped in and helped them.

The only subsidy in Sweden which is strictly a rent subsidy is the one which is made to tenants of the low-income groups in municipally owned housing. None of that subsidy goes to cooperatives. It is analogous to our public housing program. The projects are wholly municipal-owned for the benefit only of the low-income groups. The rent subsidy amounts to 3 kronor per year per square meter of floor space, or about 15 percent of the rent.

Mr. VOORHIS. Yes. Well, I am much obliged for that information. Mr. DEANE. I was interested in the closing part of your statement. The opposition to this legislation was coming from those who considered the income group here involved as offering the best source of profit to the opposition. Could you amplify on that!

Mr. Voorhis. No. I did that quick because I thought the committee was in a hurry. If that was the impression that I left, it wasn't right. What I said was that the tight supply of housing, the fact that there isn't nearly enough housing to go around, does make possible a high level of charges for housing. It does put certain interests in a very favorable position right now, today, and I think that it is

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true that that position wouldn't be maintained if the housing shortage is abated. I think that that is the real reason that this group is against the bill. I don't think it is a good reason.

Mr. DEANE. One other question that was mentioned was the Metropolitan Life Insurance Co. going into certain areas in the New York City area and the erection of buildings. I find that these large financial institutions are not interested in going to the smaller communities.

Mr. VOORHIS. No.

Mr. DEANE. For that reason I can see certain advantages in this particular legislation. Will you comment on that?

Mr. VOORHIS. I would like to say that there has been perhaps morewell, there has been way more cooperative activity in rural than in your urban areas up to this point. Everybody knows that.

In the second place, I would like to say that I think this bill is just as well adapted and will probably find almost more use among members-people in smaller- and moderate-sized communities who are interested in free-standing homes-than it will in cooperative apartmenttype developments in the big cities. I agree with the last witness in his comments about that quite completely.

I would like to say, though, that if it be true that any other interests in the country can build housing at rents that these middle-income people can afford and just have not done it yet, the very best way to get them to do it would be to pass a bill; and then after that, if they do a better job than the cooperatives can do, they are just going to take the business; that is all there is to it; but we believe this as a fundamental matter: Give the people an opportunity to prove that the people can do it for themselves. Let them prove it two or three places over and over and keep on proving it, and then we know that there are going to be instances where other folks are going to come along and do a very good job of meeting a certain need. We are all for it.

Mr. DEANE. Do you think it would be wise to provide in a bill ways and means by which a private organization could, in the event that some cooperative should begin to slip, come in and take it over?

Mr. Voorhis. I think that is amply provided for. I think it is provided that the National Cooperative Mortgage Corporation for Housing Cooperatives would take over that property in that case and dispose of it the best way they knew. They, after all, are the people who have the loan; and I think the bill should protect them as it does in that respect.

Mr. DEANE. You think that the bill makes that provision?
Mr. Voorhis. I think it makes that provision.

Mr. CHAIRMAN. The only Government preference or advantage given to these people are the low interest rates?

Mr. VOORHIS. That is right and that is not a subsidized interest rate.

The CHAIRMAN. Any cooperative would have the same power as these cooperatives!

Mr. VOORHIS. Exactly.

The CHAIRMAN. There is no other advantage given to these cooperatives except that one thing!

Mr. Voorhis. That is right and that isn't a subsidized rate, Mr. Chairman. It is a rate that is entirely justifiable as it has been justified in many other instances and in many other agencies.

The CHAIRMAN. It is not a subsidy in the sense that the Government will necessarily lose any money on it, because the Government can afford securities at a low interest rate and give these people the advantage of it.

Mr. VOORHIS. That is right.

The CHAIRMAN. Over a long period of amortization, that means a great deal, does it not?

Mr. VOORHIS. Indeed it does. Indeed it does, and over the monthly charges it means a great deal, too.

The CHAIRMAN. It means a great deal both in the cost of the home and in the rents that there will be?

Mr. VOORHIS. Exactly. In fact, it is the most important single element that can be readily effective.

I have a little pamphlet about cooperative housing in Sweden that I would also like to leave for the committee members, if I could.

The CHAIRMAN. Very well. If there are no further questions, you may stand aside, Mr. Voorhis. We are glad to have your views. Thank you, sir.

Mr. VOORHis. Thank you, very much.

The CHAIRMAN. We will adjourn, to meet tomorrow morning at 10 o'clock.

(Whereupon, at 12:15 p. m., the committee adjourned to reconvene at 10 a. m., Friday, Feb. 3, 1950.)

COOPERATIVE HOUSING

FRIDAY, FEBRUARY 3, 1950

HOUSE OF REPRESENTATIVES,
COMMITTEE ON BANKING AND CURRENCY,

Washington, D.O. The committee met, pursuant to adjournment, at 10 a. m., Hon. Brent Spence (chairman), presiding.

Present: Messrs. Buchanan, Multer, Deane, Mitchell, O'Hara, Wolcott, Talle, McMillen, Kilburn, Cole, Nicholson, and Mrs. Woodhouse.

The CHAIRMAN. The committee will be in order. Mr. Frank S. Ketcham is our first witness.

STATEMENT OF FRANK S. KETCHAM, ATTORNEY, COUNCIL FOR SOCIAL ACTION OF THE CONGREGATIONAL CHRISTIAN CHURCHES

Mr. KETCHAM. My name is Frank S. Ketcham. I am attorney for Council of Social Action of the Congregational Chritian Churches. The Reverend Thomas B. Keehn, who was originally scheduled to appear before your committee this morning was unexpectedly called to New York. Accordingly, he asked me to appear on his behalf and present his statement. This statement is submitted in behalf of the Council for Social Action; an official agency of the Congregational Christian Churches. It represents only the Council for Social Action. In a democratic organization like the Congregational Christian Churches, no individual or group is empowered to speak for all members and churches.

In May 1949, the Council for Social Action adopted the following policy statement :

The Council for Social Action and the General Council of Christian Churches have approved the following general policy on a national housing program.

We recommend the establishment of an adequate, comprehensive, national redevelopment and housing policy in order that every family may have the advantage of decent, safe, healthful shelter available within its economic means; and we specifically endorse public housing as a method, within the frame of the capitalistic economy, of achieving the aforesaid policy.

The Council for Social Action supports in principle S. 1070 and H. R. 4009 as carrying out, in part, the purpose of this policy. These bills provide for a program of slum clearance, urban development and redevelopment, construction of low-cost housing, a housing research program and a new program of rural housing.

We also support legislation to provide more adequate housing opportunities for the middle-income group. We favor nonsubsidized cooperatives, financed at a low-interest rate, to direct governmental loans to cooperatives.

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