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The city of New York has attempted to meet the needs of these middle-income families to the fullest extent of its resources. We have under way a housing program without cash subsidy involving 18,000 units. However, that hardly scratches the surface of the over-all need in New York City for middle-income housing.
I would just like to emphasize this one point, too: That in this nonsubsidized housing which we have in New York, tax exemption is granted to the improvements for a longer period of years. And cer
. tainly, on all of this tax exemption, whether it exists in our city program or under the State program known as the limited dividend
program, the cities suffer financially because they lose the revenue given through this tax exemption and cities such as New York, which must rely on the real estate values for its borrowing capacity naturally are hurt when a good part of their property, a good part of the real estate is given exemption.
This bill certainly would be a great aid to us in overcoming the necessity for giving tax exemption and I feel, too, that it would more than meet some of the criticism that has been made against this form of tax exemption.
Without more effective Federal aid, I could not venture to predict when the housing shortage in New York City will end, or when we can begin the systematic demolition of the city's slums. I am firmly convinced that this bill, by providing housing for the middle income groups, will be an effective tool for relieving the distress and hardship resulting from the housing shortage.
In connection with the administration of the proposed program, I believe that it should be set up as a constituent unit in the over-all Housing and Home Finance Agency--on a par with the Federal Housing Administration and the Public Housing Administration. I believe that the program involves sufficient complexities to warrant independent administration and judgment.
Let us return for the moment to the question of subsidization of these cooperative nonprofit enterprises. The lower middle income group which an attempt is made to aid in this bill wants no subsidy. They want to pay their own way, and the Congress can make this possible by the adoption of the financing program and other aids which this bill provides.
For instance, in New York City, as an example again, because I am more familiar with that city than other parts of the country, we took a survey on new construction done entirely by private industry about a year and a half ago. We found that in the Borough of Manhattan the average rental per room per month in this new construction by private industry ranged from $53 to $55 a room. That lowered in Brooklyn and the Bronx-it was around $38 to $36. And Queens and Richmond, about $25 to $22. So, as you can well see, we certainly need legislation such as this to help us and to help those people who need housing so badly.
There are two more points I should like to make before I close.
First, I believe that cooperative housing can be an effective instrument for construction of housing for middle income groups. We have had cooperative housing in New York City for many years, some of them sponsored by labor organizations.
Last year, we completed the Bell Park Gardens housing project containing 800 units. That project is a veterans cooperative project,
which was organized and financed through the joint efforts of the State, the city, veterans organizations, and the Federal Government through FHÅ guaranteed loans. That project proved so successful that we have already completed plans for another similar project containing 850 units.
Secondly, I think this legislation will be of great help to veterans.
The lower interest rates set forth in this bill, combined with the greater period of amortization, will bring the cost of housing down to a point where hundreds of thousands of veterans who are unable to meet the cost under existing veterans' housing legislation will now be able to obtain accommodations at rentals which they can afford to pay. In fact, I think that veterans' groups will be the principal beneficiaries under this bill.
I urge your favorable consideration of this measure-H. R. 6618— as one more democratic step in advancing the welfare of our citizens.
The CHAIRMAN. Any questions?
Mr. BUCHANAN. Just how was the Bell Park Gardens housing project financed ?
Mr. WAGNER. It was financed by the tenants contributing a certain amount of money which they could borrow, which the corporation ; could borrow, from FHA.
It was aided by the State giving them certain benefits. It was aided by the city giving them tax exemption on the improvements. As I said before, it is a burden to some extent on the city because they lose the benefits of the taxes on the improvements of the land over a good number of years. I think it is some 50 years. And legislation such as this would allow us to have those improvements on the tax rolls and would help the financial picture of the city of New York as well as, I am sure, the municipalities which face the same problem.
The CHAIRMAN. What is the extent of the housing shortage in New York!
Mr. WAGNER. Mr. Chairman, it is a little difficult to estimate right at this period of time, but we still feel that we have some 200,000 families who are living doubled up. We need accommodations. We have another at least 250,000 families who are living in slum conditions at the present time, which we certainly would like to see eradicated in order to give them a decent home which I feel every American family is entitled to.
The CHAIRMAN. How does that condition compare with the conditions which prevailed a year ago?
Mr. WAGNER. The situation is a little better for a number of reasons. We haven't had too much relief for the lower income groups and middle income groups from private construction. We have had a bit, but we have had a big program of public housing, aided through the Federal Government and the State government, together with our city program and we have had some large projects put into operation which have come under our State law known as the limited-dividendcorporation law which allows private insurance companies and banks to go into the housing field.
They are given tax exemption on the improvements and their profits are limited to 6 percent over a period of years.
Mr. DEANE. Mr. Wagner, I was interested in a supplemental statement covering 10 pages, submitted during the week by Mr. John C.
Thompson, representing the National Association of Real Estate Boards. In this supplement, he breaks down various cities giving population areas, indicating that in these particular areas, which includes Brooklyn and Buffalo, N. Y., that new homes are being built for sale at $8,000.
I wonder if your organization made a survey to the extent that you think those figures are accurate?
Mr. WAGNER. I wouldn't know, except for this, Congressman, that you find very little building of private homes in a borough such as Brooklyn, which is indicated there. It is pretty well built up. There are some. The demand, certainly in New York City is for apartment units for the most part, rather than homes, because to be very frank, I think most of the people feel that they are not getting a good bargain with a home.
I don't know of very many satisfactory homes that are being built even in the Borough of Queens even at $8,000, which are good bargains.
Mr. DEANE. I wonder if you could from the record secure from reliable sources evidence to show what new houses are selling for in the Brooklyn area and in that statement give some idea of the size of the house and cost of construction or any information that would help to either substantiate or indicate that this statement may not have been, perhaps, altogether in keeping with actual facts?
Mr. WAGNER. I will be glad to do that, sir. I assume offhand that the $8,000 homes selling in Brooklyn are of the so-called ranch type which have, maybe, three or four rooms and as I said before, the demand for homes in New York City is not very great. It is more for apartment units. Although some of these homes may be available, it is interesting to note, for instance, just as one example, that in Woodside, in Queens, where one of these nonsubsidized projects was built under the city's program for 3,000 units, they had over 48,000 applications and that is so in practically all of the housing projects which we have in the city and, therefore, the so-called lower middle income groups. While there may be some homes available in Brooklyn, I will check on that and be glad to communicate with you.
Mr. MITCHELL. I wonder whether the ADA has any reports from any of the States in which it has locals in regard to the housing need.
Mr. WAGNER. I am sure it can be obtained if there are any available.
Mr. MITCHELL. I wonder if you could ask the ADA staff here to review its correspondence to find out whether it has anything which would shed light on the question asked by Mr. Deane with regard to the availability of houses in that cost class?
Mr. WAGNER. I certainly will.
(The requested information was not received at the time the hearings were printed.)
Mr. DEANE. Mr. Mitchell, will you yield there?
Mr. DEANE. For the information of Mr. Wagner, the supplement is with the Clerk.
The CHAIRMAN. We are very glad to have your views on the subject and the committee will consider your statement.
Mr. WAGNER. Thank you.
STATEMENT OF JOHN GREEN, SECRETARY OF CIO NATIONAL HOUS
ING COMMITTEE AND PRESIDENT OF THE INDUSTRIAL UNION OF MARINE AND SHIPBUILDING WORKERS OF AMERICA, CIO, ACCOMPANIED BY LEO GOODMAN
Mr. GREEN. I am John Creen, president of the Industrial Union of Marine and Shipbuilding Workers of America, CIO, and secretary of the CIO national housing committee.
Mr. Chairman and members of the committee, I have a prepared statement here but I am just wondering whether to take up the time of the committee or not because last night into my hands came a paper with an article quoting Mr. John C. Thompson, president of the New Jersey Realty Co., Newark, and the heading of it says, "Calls
, Middle Income Housing Bill Vehicle for Getting Votes.” If that is the case, Mr. Chairman, you are all reelected again, because this bill, as I understand it, is now beginning to do something for that group of people who have been in the no man's land of housing. I want to commend the committee for its forthright stand in trying to put this bill through Congress, because the CIO has consistently supported Federal housing legislation to allieviate the housing needs of the American people.
We have frequently appeared before this committee in behalf of programs seeking the solution of parts of the problem. We believe that this bill is necessary to fill the last gap in the Government's program.
This committee, and the Congress, have legislated again and again on various phases of the housing problem. This committee is to be commended for having brought about the passage of the Public Housing Act of 1949. I believe that the Eighty-first Congress will go down in history for having taken the first long step toward the elimination of America's slums.
I believe that the members of this committee will be proud of their work when the Public Housing Agency moves hundreds of thousands of families from squalid tenements into the public housing units which are being planned and programed in the face of sniping opposition by greedy business interests who fail to realize that the whole community will benefit when the slums of today are a thing of the past.
The CIO housing committee supported passage of the public-housing bill as a public service. We knew, and the members of this committee knew, that because of the income limitations the overwhelming majority of the membership of the CIO are not and will not be eligible for admission into public-housing units.
On the other hand, this committee has legislated again and again in behalf of the conventional builders and the building industry who have sought aids from the Government in the form of insurance, guaranties, and the direct allocation of Federal funds.
These programs have been opposed at one time or another by various segments of the industry, yet it is our universal experience that once these proposals are adopted and enacted into law the industry has seized the opportunity which they present and, accepting their benefits, gone on to new and higher levels of production.
In all of these considerations there has been a group who have been deliberately neglected. This group consists primarily of the middle
class, often called the backbone of the Nation. The middle third have been the neglected, the forgotten families of the American housing scene. They are the families whose needs this committee is now addressing itself to.
The CIO endorses and supports, and urges this committee to support, the administration's middle-income housing principles pending before you in H. R. 6618.
We believe this bill will achieve the results needed to bring more adequate housing within the reach of the average member of the CIO and of families similarly situated—those families who currently are too rich to be eligible for public housing yet unable to afford the luxury housing produced under the present high costs by the established industry.
We believe that this program is not competitive with any part of the established industry. This program will extend and expand the present level of production.
We have been checking into the economic status of the various family groups in America, and we find that the great bulk of American families, based upon the figures that we have in terms of savings, are disqualified from solving their housing problem. According to the Federal Reserve Board, there are about 40 percent of American families that this housing bill will deal with who have only about 15 percent of the savings in America. That is the group in which the great mass of our membership falls.
We believe that the bill before us provides a realistic approach to this problem. I think the committee will agree that anything that will strengthen the American home strengthens America, because the American home and the American family is really the core of democratic strength in America.
We believe America cannot be strong unless we take practical steps to try to strengthen the American home and the American family. Those of us who want to fight the Communists effectively have to meet the Communists' offensive, not by pious slogans but by tangible achievement in terms of trying to win a greater amount of social justice.
Certainly in housing this question is a front on which we can strike some powerful blows for freedom and against totalitarianism.
Anyone going to Europe and making an honest evaluation of the housing in countries like Switzerland and the Scandinavian countries must come to the conclusion that with less resources they have done a better job on housing in many cases than we have with greater resources.
The thing that people in Europe keep asking the American tradeunionists when they get to Europe, and when they come here, is, “We understand why we have bad housing in Europe in some places. The war destroyed a very large percentage of our housing in Europe. We have limited resources, we have all the problems of trying to rebuild and rehabilitate our economies," but they say “We can't understand why America, with all of its resources, America that was untouched by the war in terms of its housing, why you have slums, why you have inadequate housing."
Nothing would help in strengthening the whole international force of freedom in its fight against totalitarianism more effectively than if we could really do a good job on the housing front.