Part II. Mayors' survey of housing conditions and needs-Continued Excerpts from mayors' comments-Continued INCOME AND HOUSING PART I: INTRODUCTION AND SUMMARY OF FINDINGS INTRODUCTION The Housing Act of 1949 sets forth the responsibility of the Federal Government to use its programs and resources to assist in the achievement of a goal of— housing production and related community development In 1949, the Nation was experiencing a serious housing shortage, due in large part to the cutback in construction during the war period. In addition, a substantial portion of the Nation's housing inventory was in poor condition, as was later shown by the 1950 census, which revealed a total of 15 million substandard dwelling units, of which 10 million were located in urban centers. Since the 1949 declaration of national policy, more than 1 million housing units a year have been built, and an unmeasured quantity of units has been improved and modernized. Rehabilitation of existing units was especially emphasized by the Housing Act of 1954. At the same time, obsolescence, demolitions, and miscellaneous losses, of which fire is the most important, have cut into the total supply of standard housing units. In formulating policies to improve the quantity and quality of the Nation's housing inventory, the Congress has continually taken note of the relationship of income and housing expense. During the depression of the 1930's, the need to create jobs and to relieve hardship among tenants and homeowners was met by large and varied Federal housing programs. Among these programs were Federal refinancing to prevent mortgage foreclosures, a system of mortgage insurance, the construction of housing for families of low income, and the reconstruction of slum areas. In only one of these programs, however, was there a precisely defined income group singled out for legislative benefits. The United States Housing Act of 1937 established a low-rent publichousing program to meet the needs of low-income families. Other income groups, such as middle-income families, have not been so specifically identified, although middle-income groups were meant to be among the beneficiaries of many of the Federal enactments. In 1 recent years, two middle-income housing proposals, substantially similar in objective and approach, have been introduced in the Congress. During the 81st Congress, the present subcommittee chairman, then chairman of the Subcommittee on Housing and Rents, introduced a middle-income housing bill (S. 2246) which failed by 5 votes to pass the Senate. The majority report of the Committee on Banking and Currency (S. Rept. No. 1286, 81st Cong., 2d sess., p. 48) stated: The gap in our present housing program lies in the area between the families in the lower-income third and the upperincome third. The low-rent housing authorized in the legislation previously reported by your committee and enacted during the first session of the 81st Congress (Public Law 171, 81st Cong., approved July 15, 1949) will result in the production of good housing available for families in the lowest-income third. The various programs of governmental insurance or guaranty of home loans, to assist the production of housing for sale and for rent, without question, result in a sizable volume of housing available for families in the highest-income third. But, in terms of both volume and suitability for adequate family life, housing that is available, or in prospect of being made available, for families in the middle-income third is wholly inadequate. During the second session of the 84th Congress, a bill (S. 3158), introduced by Senator Lehman of New York and several cosponsors, contained a provision that would have created a Government mortgage corporation with powers to make and service loans for the benefit of "families of moderate income." By a tie vote, this provision failed to be included in the omnibus housing bill (S. 3855) reported by the Committee on Banking and Currency (S. Rept. No. 2005, 84th Cong., 2d sess.). At committee hearings and during debate on S. 3855, the subcommittee chairman underscored the need for more up-to-date information on the Nation's housing conditions and needs, especially those of low-income and middle-income families. He instructed the staff to assemble such information during adjournment. SCOPE OF STUDY In this report, the relationship of income and housing has been analyzed on the basis of two quite different sources of data. First, a questionnaire was sent to a sample of 250 mayors asking them about the adequacy of the housing supply in their cities, the price structure of available dwellings, and the ability of certain groups, such as lowincome and middle-income families, minorities, and the elderly to obtain suitable shelter. The research objective was to gather data in depth that reveal the specific dimensions of local conditions and needs. The findings of this survey are presented in part II. Second, the same problems were explored through an examination of statistical series made available by Government agencies. These series are incomplete and inadequate as a guide to the current housing situation. They do not provide current information on important aspects of housing supply and demand, on conventional financing, or on house prices, even as national totals, and yield very little information of any kind on local housing situations. Some indication can be given, however, of the nature and extent of Federal programs in meeting the housing needs of low-income and middle-income families. The staff has not attempted to collect the type of data now being assembled by the Bureau of the Census in its National Housing Inventory. This $1 million census study was authorized by the Congress during the last session to provide up-to-date information on housing conditions in the Nation as a whole and in nine metropolitan areas. The census survey will give an accurate picture of conditions at the end of 1956, but is not designed to maintain any current record thereafter. Except for the nine metropolitan areas, the survey will provide no local data until the regular 1960 census. DEFINITIONS OF LOW-INCOME AND MIDDLE-INCOME For housing purposes, income groups have been defined in at least two different ways. One is a simple statistical description of the income range of a population segment, such as the lowest third or middle third. A somewhat different method has been used in legislative enactments and proposals. The first method can be illustrated by referring to tables 1 and 2, which present unpublished census figures on income distribution in 1955. Census figures are the most useful for housing analysis. (See appendix C, sec. 1.) In each table, the income range for each sixth. of the population is given. Thus, the lowest third of the families had an income range up to $3,324, and the middle third ranged from $3,325 to $5,638, and the upper third above $5,638. Middle-income families, according to this framework of analysis, correspond to the middle third, shown as the third and fourth sixths in the table. In addition to the figures for families, the distribution of income is shown for the unrelated individuals group, which is at a much lower income level than families. If the unrelated individuals group is combined with families, the middle third, for example, shows an income range of $2,701 to $5,198. A further refinement, in terms of urban-rural comparisons, is shown by the figures in table 2. The lowest third of urban families had incomes of less than $3,814. Middle-income families in urban areas ranged from $3,814 to $6,091, in sharp contrast to the middle-income farm family range of $1,359 to $3,146. In legislative enactments and proposals, the definitions of income groups are stated in terms of an income-housing expense relationship. In the Federal low-rent public housing program, the annual income of a family at the time of admission may not exceed 5 times the annual rental including utilities. Maximum rentals must be at least 20 percent below the lowest rents at which decent private housing is available in substantial supply in the community. The median income of families admitted to public housing in recent years has been in the lowest sixth; in 1955, the median was around $2,100. Proponents of middle-income housing legislation generally define middle-income groups as the people whose income is above the ceiling for low-rent public housing, but too low to afford available private |