Senator SPARKMAN. Well, Congress is supposed to legislate, but we are not legislating here. We are turning it over to the Secretary to make these decisions not only for us but for the cities themselves. Now, I do not care to go into any great argument, but I just hope you will read these very carefully. Mr. BLACKMON. Yes. Senator SPARKMAN. Every one of them. Mr. BLACKMON. You will find, Mr. Chairman, I am sure, that if in your wisdom you enact this into law, each year there will have to be some guidelines set up and some things actually taken Senator SPARKMAN. "Guidelines" is a little hot word in 17 Southern States right now, because we have seen what they can do there by giving it to a man to do over and above and beyond and out of the range of the law that Congress wrote. I am not willing to have a new program of guidelines by anybody. And I think Congress ought to stick to its job and write the laws quite specifically. I just do not believe that I can go along with the demonstration cities under the terms of the bill as now drawn. I share the feeling of the Senator from New Hampshire. Certainly the power is there. I have a great deal of confidence in Secretary Weaver. He assures us that all cities will have a fair show. But we know by the natural working of things that the big city with its manifold problems deserves attention and they are in position to be able to employ an able staff of planners, whereas the little city in New Hampshire and Alabama and other places like that go begging for planners. We do not have the planners to do it. We have tried time after time to get a program going whereby there might be trained planners to help the small cities. It seems to me that the small cities would be almost forgotten in the program. Mr. BLACKMON. Well, as you remember, earlier in our testimony we said that we have many problems in our industry in this Nation today that we hope the committee will give some thought to solving before we enthusiastically jump into new programs. Senator SPARKMAN. I agree with you on that too. I think that is applicable, because this is certainly a new program. I want to see a vigorous program for helping to rehabilitate and rebuild our cities. And I am for it. But I just wonder if we are ready to go this far yet. Mr. BLACKMON. There are lots of areas of last year's legislation that could be very helpful in these fields Senator SPARKMAN. Right Mr. BLACKMON (continuing). If we moved forward. Senator SPARKMAN. As a matter of fact, some of the witnesses have brought to our attention that there ought to be an expansion of our urban renewal programs before we plunge into a new program of setting up what is called demonstration cities. I just hope you will consider that very carefully. Mr. BLACKMON. Yes sir. Thank you. Senator SPARKMAN. We certainly thank you, gentlemen. Mr. BLACK MON. Thank you, Mr. Chairman. (The attachments to Mr. Blackmon's prepared statement follow :) NATIONAL HOUSING CENTER Top of The News ... re Rising teen-age joblessness was sponsible for a one-tenth of 1% increase in the March unemployment rate to 3.8%, the Labor Department reports. However, the number of workers on nonfarm payrolls rose by 520,000 to a total of 61,722,000 and the average factory work week increased to 41.5 hours in March. Unemployment among adult men is expected to drop sharply by May because of a pick-up in outdoor work. Treasury Secretary Fowler is urging bankers to turn down loans that might lead to inflationary spending. His plea follows President Johnson's appeal to housewives, businessmen, and just about every one else to cut out unnecessary spending so prices won't be bid up. House Republicans are opposed to a tax increase to counter threatening inflation. Meeting this week on the economic situation, they issued a statement saying, "We do not want another tax increase." Instead they asked President Johnson to cut government spending. Increased funds for the rent supplement program got the support of Sen. Paul Douglas (D-III.). He wants the Senate to approve the full $30 million asked by President Johnson, terming the $12 million approved by the House as a "very puny effort." Consumer installment credit rose by a seasonally adjusted $536 million in February. It was the smallest increase since November, 1964. The January increase was $622 million. New loans in all categories in February were below the January levels. The Federal Reserve Board has asked Congress for tough new powers in regulating banking operations. ASSOCIATION The UNITED STATES 1625 L STREET, N.W. WASHINGTON, D. C. "Who does care about home building?" An Urgent Message from Larry Blackmon, President governmental action and lack of action-have contributed to today's gloom. Now another blow! Fannie Mae has put a $15,000 limit on the unpaid amounts of mortgages that it will purchase in its secondary-market opera- Housing starts are at their lowest level in three years. The price of available credit has increased sharply. The money market grows tighter. Materials costs go higher. Lumber prices are skyrocketing. Labor becomes scarcer. There's an appalling slowness in putting into effect housing programs approved last year by Congress. That is the situation in which the home building industry is operating while virtually all other sectors of the national economy boom and inflation grows more real. The question is: Who does care about home building? Ironically, the single concrete act to curb the economy's unbridled zip (other than White House suasion) dampened only the home building industry and small business. That was the Fed's action last December in increasing the rediscount rate. The blow fell on home building. It did little to restrain expansionary tendencies of large commercial and industrial enterprises. It bailed out commercial banks by raising the allowable interest rate (with no guide lines) to be paid on Certificates of Deposit. FHA's increase in the interest rate from 5% to 5% % was too little and too late. Discounts now are greater than before that action one month ago. With all this is mind, it's time to review the steps that have been taken by NAHB officers to put home building's case before all levels-the White House, the Congress, and the Department of Housing and Urban Development. (Continued on Next Page) Blackmon Page 1 Continued Important decisions will have to be made by the NAHB Board of Directors in its meeting in Washington, April 2226. The Board's guidance and support will be necessary for future action. Late last month we outlined, in detail and specifics, home building's dilemma to President Johnson's Special Counsel. We told him that we support the Administration in its effort to curb inflation. However, we do not feel that we should be the sacrificial goats. We believe that other sectors in the economy should share in the restraints. It may well be necessary to consider the imposition of selective credit restraints, higher taxes, removal of the investment tax credit, and similar meas ures if the entire economy is to share in the kind of effort that is necessary to keep the American economy at a high level without inflation. We told him that we have assured our members that their problems were being given every consideration by the Administration. But bluntly, we reported that the members have as yet seen no signs of this. The White House has replied that it will watch with interest the policy actions taken by our Board later this monh. Earlier in the year when the effects of the Fed's action were becoming very apparent to our home builders, we suggested to FHA that it consider incorporating discounts in its final mortgage evaluations. We felt then, and still feel, based on the computations made by our Economics Department of typical mortgages, that the discount hardship-to buyer and builder could be minimized by such action. FHA, however, rejected this proposal and, instead, later raised the interest rate 4%, a wholly futile action. Relief from the current unrealistic FHA rate is imperative. Subsequently, while testifying before the House Housing Subcommittee on the proposed "Demonstration Cities" Act, we laid our case before the members of Congress. The immediate problems of basic mortgage finance now confronting the home building industry are of vital importance, the Representatives were told. Several members of the Subcommittee were deeply interested in our suggestions for incorporting discounts in evaluation and supporting material for our case has been submitted to them. We shall again bring to the attention of Congress the parlous state of home building in testimony before the Senate Housing Subcommittee on April 22. The inflationary stresses which are twisting the home building industry again were brought to the attention of Philip N. Brownstein, who is FHA Commissioner and Assistant Secretary for Mortgage Credit in H. U. D. He was told that the building industry is faced with the serious problem of rising materials costs. This national problem is developing at a very rapid rate and the pace is such that it is impossible for government statistics to keep abreast. In light of this, Brownstein was told, it is of great importance that the FHA Field Offices be made fully aware of how critical the situation is. In the normal processing cycles of new construction, particularly multifamily projects, the cost data on which proposals may be developed may actually be invalid in this situation by the time construction begins. (Continued on Back Page) DIGEST How To Speed FHA 'Multi' FHA wants to reduce the time now required for processing multifamily housing cases. A major study by an NAHB Multifamily Housing Task Force is aimed at helping the agency attain its goal. The special Task Force is made up of multifamily housing builders appointed by NAHB President Blackmon. National staff specialists have assisted. Plans call for a report and recommendations to be made in May to Assistant Secretary Phillip Brownstein of the Housing and Urban Development Department. FHA Offices Are Cooperative Members of the Task Force and the staff professionals will have visited nine FHA offices over the country. The agency has cooperated by making records, personnel, techniques and procedures available for information. From a study of the information, the NAHB advisory group will try to suggest processing methods which would shorten the time between preliminary application and commitment. Offices are cooperating at Providence, Boston, Detroit, Philadelphia, Pittsburgh, Atlanta, Chicago, Cleveland and Hartford. NAHB's James A. Lyons, Mortgage Finance and Specialized Housing Director, and William H. Garmany, Multifamily Housing Director, have assisted the Task Force. The work has been under way more than a month. Group To Meet April 25 A similar study is being made in the same offices by the professional staff of Urban America's Redevelopment Division. A joint report will be filed. The Task Force will meet at the Spring Meeting. Monday, April 25, in Washington, to prepare a preliminary report. NAHB's Richard J. Canavan, Staff Vice President for Builder Services, said FHA has made much progress in reducing processing time for single-family housing, and wants to do the same for multifamily. There have been instances, he said, when the completion of multifamily housing projects has taken so long that the anticipated market has disappeared to the detriment of the sponsor. A SUMMARY OF ASSOCIATION AIMS, ACTIVITIES AND SERVICES Lawmakers Respond Early, Senators and Representatives are accepting invitations to the annual Congressional Reception and Banquet at a faster rate than last year, says John J. Linnehan, Director of NAHB's Department of Governmental Affairs. The traditional event will be the high point of social activity at the NAHB Spring Meeting, April 22-26, in Washington. The reception will start at 6 p.m., Tuesday, April 26, in the Georgetown, Jefferson and Lincoln ballrooms of the Washington Hilton Hotel. The banquet will start at 7:30 p.m., in the International Ballroom. Invitations have been extended directly to the lawmakers, and other distinguished guests from HBAs of their own states and districts. Responses are being processed through Linnehan's office. At mid-week, acceptances from the lawmakers and their wives had passed 300. A possible record attendance of members and guests was indicated. In addition to the Congressional invitations, guests will include many invited representatives of Congressional and administrative agency staffs on Capitol Hill. Outstanding entertainment has been arranged for the banquet program. HOHOHOHOHOHOHOHOHOHOHOHOHOHOHOHOHOHOHOHJ Lively Interest Shown "Quiet Living" is exciting lively interest among HBAs planning Parades of Homes. Various consumer and trade publications are appearing with ads of manufacturers featuring "Quiet Living", adding to the interest of HBAs and the public. Feature stories are also appearing in consumer magazines and newspapers. The following dates for "Quiet Living" Parades have been reported to NAHB's John C. Pollock, Marketing Department Director: Sabine Area, Beaumont, Tex., May 1, 7, 14 and 15. Lorain County, Virmillion, O., May 21-30. Jacksonville, Fla., Jacksonville Beach, May 28-June 12. Greater Columbus, Columbus, O., June 11-19. Austin HBA, Austin, Tex., July 9-17. Mid-Florida, Orlando, Sept. 25-Oct. 2. Monroe County, Bloomington, Ind., June 18-19, June 25-26. Other associations are planning use of the theme. Many have ordered copies of a planning guide being prepared under Marketing Department direction. A 16 mm. sound-color film is being loaned to HBAs in order of receipt of their requests. It is for showing to members and Parade committees to give them background information on the "Quiet Living" Parade idea and help them decide whether to sponsor such a Parade. WASHINGTON REPRESENTATIVES of National Housing Center Council members attended an annual get-acquainted luncheon at the Center this week. NAHB Executive Vice President Nathaniel H. Rogg (at podium) introduces national staff members with whom the representatives have contact. Thirtynine manufacturer representatives attended. The program accented the potential value of NAHB and National Housing Center facilities to Council members. Blackmon Page 2 Continued This poses a serious problem in processing and cost data must be kept up to the minute. Brownstein was urged to instruct Field Offices to be flexible and alert to the rapid changes in working with builders. We assured him of our full cooperation in working with FHA Field and Central Office staff to achieve maximum effectiveness of the FHA programs. In the case of the FNMA action in setting a purchase limitation of $15,000 (no limit in Alaska, $18,500 in Hawaii) on the unpaid amounts of mortgages, we have urged that the ceiling be rescinded as promptly as possible. We understand the need for conserving Fannie Mae funds for lower income housing purchase, but this action hobbles further our industry while the rest of the economy goes unfettered. High Cost Areas Hurt FNMA has served admirably as a backup for housing, enabling lenders to get fresh funds for investment in new construction. However, this latest action will cut off a source of funds for mortgages beyond the $15,000 limitation. Furthermore, it discriminates against higher cost areas, heavily reliant upon FHA and FNMA, in the East, the North, the West, and Southwest. That is where we stand. On this page there is a summary of the materials situation around the country as just compiled by our Economics Department. At our Board meeting later in the month we must grapple with the complex and thorny issues which confron: us. We must decide not only, what in our opinion, is best for our country, but also firmly put forth the case for our neglected industry, step-child to the economy. Kitchens, Bathrooms Rate When it comes to attractive merchandising and added special features of interest to the family, kitchens and bathrooms perhaps rate as the most important rooms of the house. The latest evidence is borne out in a new bibliography issued by the National Housing Center Library. It is Selected Reference List No. 74, entitled "Kitchens and Bathrooms," and it contains more than 130 references, from 1964 to the present. They relate to the latest ideas on design, equipment, and accessories. "The list covers everything from the small efficiency kitchen to the family living center, from the compartmental bath to the plastic bathtub," said Dr. Karl Baer, Chief Librarian It is priced at $2. The Housing Materials Situation... The materials situation as it affects home builders is becoming of increasing concern. The government reports that the steel, copper, and lumber industries are operating at peak demand. Copper seems to be, according to gov- However, the situation in lumber is Lumber-Prices in the last three "crazy market." Lumber dealers throughout the country re- JOHN G. WALSH, JR, is new Director of the Copper-About 2 million tons of copper were used last year of which construction accounted for 15%. The release of 200,000 tons from government stockpiles is expected to get into consumption in a few weeks. However, the problems of sufficient supply globally are overwhelming. There's lit le question that a shortage is going to exist for some time. The military has a high demand and non-military useage has increased with the rise in industrial production. Sporadic shortages and higher prices reported. Steel -No shortage of structural steel, but some signs of price increases in fabricated steel. Heavy demand from schools, commercial buildings, factories and the like. Trouble is anticipated in the siding and gutter operation which currently are in short supply. Bathtubs and sink manufacturers not having trouble and pipe is in adequate supply Aluminum-Industry is operating at capacity. No serious shortages anticipated. Some firms may in near future reduce some of their less profitable operations and concentrate on those pressing capacity. ALCOA has indicated it may press for price increases. Plastic-No serious shortages reported in either raw material or finished products. There has been a levelling in the decorative plastics market but a sharp upswing in the industrial plastics. a result of Viet Nam.. Women's Program At Spring The Washington chapter of the National Home Fashions League will present "Color to Excite the Senses" at the NAHB Spring Meeting. The program will be sponsored by the NAHB Women's Auxiliary. It is for all women registered for the meeting, and will start at 10:30 am.. Tuesday, April 26, in the Washington Hilton Hotel, meeting headquarters. Participants will be Vera R. Cole and Margaret Steininger. Mrs. Cole, an interior designer, is president of the chapter. Miss Steininger owns and operates "Peggy's Showroom", an interior fashions trade center in Washington. She is a member of the HBA of Metropolitan Washington. They will discuss and illustrate new and different environmental color combinations for rooms. There will be a fabrics, wallpaper and carpets display. Mrs. Marie Loucks of the NAHB staff, who is active in the home fashions league, arranged for the program, in cooperation with Miss Mildred Clark. staff coordinator for the Auxiliary. |