CALCULATION OF SUBSIDY NEEDED, ALL U.S. METRO AREAS, RENTERS BELOW SOCIAL SECURITY 7. Renters needing partial subsidy (income between line 5 and line 2) (thousands).. 510 650 330 240 200 145 180 370 1,960 8. Median income of renters needing partial subsidy.. $1,200 $1,600 $2,000 $2,700 $3,200 9. Median amount available for housing (line 8 $3,850 Note: The calculation is based on the lowest commonly used measure of poverty; it would, for example, exclude a substantial portion of families with incomes below public housing maximum admission limits. Source: Estimated from cumulative distribution curves based on 1960 Housing Census, vol. II, No. 1, table B-2. CUMULATIVE EFFECTS OF THE DEFICIT OF REASONABLE HOUSING AT LOW-INCOME LEVELS The real gap in available housing at a reasonable cost is at the bottom of the income scale. To use the rough standard that a family should have to spend only twenty percent of its income on housing, if a family's income is $2,000 its rent should be only $33; if $3,000 it should be only $50; if $4,000 it should be only $67, and so forth. The 1960 Census indicates that in each of the twelve largest standard metropolitan areas in the country, there is a gap between the number of units of housing available at $33 rent and the number of renter households with an income of less than $2,000. In seven of these metropolitan areas, there is also a gap between the units available at $50 rent and the number of households with incomes from $2,000 to $3,000. The lack of housing available in the lowest rental range not only forces the poorest families to spend an excessive amount of their income on rent; it also creates a situation in which families with incomes of $3,000, $4,000, and even $5,000 also may not be able to find housing at twenty percent of their income. There is not a sufficient surplus of renter units at the next to lowest rental levels to immediately absorb the lower income families. Therefore, it is important to determine the point at which a city's cumulative deficit of housing creases to exist and a cumulative surplus of housing available, over housing needed, appears. (This apparent surplus is explained by the existence of an apparent deficit at the upper end of the income scale. This deficit results from the diminishing percentage of income spent on housing as income rises, not to a need for more expensive housing.) In Philadelphia, Pittsburgh, and St. Louis, a cumulative surplus of reasonable housing exists first for those families able to pay up to $67 rent ($3-4,000 income level). In New York and San Francisco, it exists first at the $83 rent level ($4-5,000 income). For the remaining cities, the deficit caused by a lack of low rental units is not absorbed by the housing supply until the $100 rent level ($5-6,000 income) is reached. An analysis of the income and renter unit figures for the entire country reveal a similar pattern. There is a deficit of 3,073,000 renter units for families with an income of $2,000 and below. This dearth in low-cost housing results in a cumulative deficit at the $3,000 and $4,000 income levels as well. There is a surplus of housing available for families with incomes of up to $7,000, and then there develops the "false deficit” of the most costly rented units. The United States is divided into nine divisions for census purposes. Only the Middle Atlantic Division is able to meet the cumulative need for housing by the $4,000 income level. The New England, East North Central, and West North Central Divisions can only fully provide reasonable housing to families with an income of $5,000. In the Mountain and Pacific Divisions, this is not possible until the $6,000 income level is reached. In the South Atlantic, the East South Central, and the South Central Divisions, the cumulative deficit in housing is only absorbed when all those families which do not pay cash rent are added into the calculations. In contrast to the metropolitan areas, where this group represents on the average 3.4% of the renter households, and the whole country where it represents 7.1%, the families which do not pay cash rent make up on the average 12.3% of the renter population in these three divisions, which tends to make the housing problem appear even more serious than it actually is in these areas. Senator BROOKE. The next and final and perhaps the most patient witness is Mr. George Schermer, consultant on urban problems. Mr. Schermer, we really apologize to you, and I am going to ask you to do what I asked Mrs. Dolbeare to do, and that is talk about what you think to be the most important things in your entire state ment. Your entire statement will be printed for the record and we may wish to then submit questions to you for you to submit answers for the record (see p. 1052). STATEMENT OF GEORGE SCHERMER, CONSULTANT ON URBAN SOCIAL PROBLEMS Mr. SCHERMER. I want to thank you for the opportunity to appear before you, and I will be very brief indeed. Much has been said about the physical conditions in public housing and I have commented extensively on that in my statement. Because it is redundant by this time I will skip over that. In the last several years I have conducted several studies of public housing and have taken a close look at public housing in some 30 cities in the United States. One of the most important observations and one that has not been stressed as much here as some other factors have been, is the social environment that prevails in public housing. I will admit that not all public housing is as bad as some of the worst that gets publicized, but there are many developments where the social environment, in my opinion, is a little better than it is in the privately owned and operated slum communities. The physical safety is better. Few people in public housing lose their lives in fires. The roofs generally are tight. Not very many people are subjected to cold. The social environment is one that leaves everything to be desired. In that connection I find that in cutting down the length of my written statement, a paragraph was inadvertently left out in which I emphasized that very point. A major problem in public housing is security. Those people living in public housing are terribly frightened, and this is especially true in high-rise public housing. Incidentally, it is not nearly as critical a problem in low-rise buildings because people have more control over the immediate environment outside their house under those conditions. A second very critical factor lies in the very nature of public housing. It has created a general attitude among tenants that they have no stake in that community. To most people it is a way station. They may be unrealistic about that, and they may have to live there the rest of their lives, but it is not the place where they aspire to live, and when they think about doing something for their own future they are thinking of some other place, and I think this contributes very critically to the social conditions, the social environment we have in the public housing areas. One of the points mentioned in my paper is the fact that, while some public housing is not bad, the local authorities are devoting all their attention to managing a few properties well rather than to solving the housing problems of the poor. I cite one particular authority where things are quite good. But I come to the conclusion that top management spends all of its time thinking about the 1,500 units that it is managing and doing a good job and making no effort whatever to work on the rest of the housing problems of the city. They love their little estate that they have and they do a nice job with it. Incidentally in those developments where conditions are fairly good, the authorities are rather more concerned about the social environment of the properties they are managing than doing a total job. They are quite selective of their tenants; they accommodate the nice people who are poor. The two principal points I make in my statement are: First, the development of projects exclusively for the poor is a gross error and I don't think we should do any more of it in this country. We should build substantially more housing. We should increase our housing supply. We should design in such a manner that the houses suitable for the needs of the very poor, the not-so-poor, and the lower middle income people. Basically we should build good houses. We should apply the subsidy to the family, not to the house. We should not have any more houses that have a subsidy attached to them specifically so that they are reserved exclusively for the poor. We ought not to go on creating more and more neighborhoods that are exclusively poor. Now, in that connection I strongly endorse the objectives of the Senate bill 4087, the Abandoned Properties and Neighborhoods Act, because it is one way in which we can preserve existing communities that are not necessarily exclusively for the poor. Again I would endorse 4087 because it would enable thousands of families, if it is adequately funded, to find their homes, suitable homes in the larger community, not necessarily in neighborhoods that are restricted to the poor. Senator BROOKE. You realize that is an experimental only project, you understand that? Mr. SCHERMER. Pardon? Senator BROOKE. That is experimental only. Mr. SCHERMER. Yes, I understand that. But I hope it will work out. I will be disappointed if it does not. Senator BROOKE. I want you to understand that we certainly did recognize that that is not sufficient money to begin to do the job in that area, but we are hopeful if it does work out that we can continue it. We hope then that we can go for proper funding for such a pro gram. Go ahead. Mr. SCHERMER. Now, the second point that I want to emphasize here is that we will have to deal realistically with the problems in the existing public housing. In that connection I am consultant to a couple of cities to which I am recommending that the local public housing supply first be very substantially increased through leasing programs and the development of many small scattered sites, that the existing public housing be vacated, rehabilitated and then converted to moderate income operations under nonprofit private management with lease-back of about one-third of the units to the housing authority. My assumption at the moment is that only some public housing will lend itself to this type of conversion and that most of it will continue to function as low-rent housing for low-income families. Now some public housing will lend itself to this approach, some of it will not. The traditional subsidy arrangement for public housing didn't work. You are very aware of this so I won't dwell on it-the Sparkman and Brooke amendments were intended to, I know, correct that to a considerable extent. I have not been working on public housing in the last year and my consulting work has been in other areas so I do not know how those amendments have been working, but I do have one client that told me that nothing has happened in his particular area. There have been no benefits from the Brooke amendment. Senator BROOKE. I think we have had some comments of that nature from across the country where those who have been paying more than 25 percent have received rebates, so to speak. But I think it is generally conceded that insofar as the improvement in the quality of the level of public housing projects is concerned, we have not seen. the results, because of this very narrow interpretation on the part of HUD as to what the intent of Congress was. Mr. SCHERMER. Now finally, and with this I will conclude, we must understand that if the larger society is to have the luxury of keeping the very poor and the least able concentrated in segregated colonies, it must pay the bill. We cannot use normal real estate operating costs as any sort of a measuring stick because we are trying to house a very unselective group of people. One of the things that I have come upon is the un usual ratio of children to adults in public housing. This has particular significance in high-rise housing. In private middle-class housing you may have as few as one child per four families, or one child per eight adults. In public housing, especially in high-rise apartments, it is not uncommon to have as many as three children per adult. The adult presence outside of the dwelling unit becomes almost nonexistent, except insofar as management can make its presence felt and management is so underfunded that it cannot do that. The subsidies for conventional public housing projects where there are large numbers of children, relatively fewer adults and a disproportionate number of families with emotional problems, must be based upon more realistic criteria for estimating operating costs. I am not sure that we are coming anywhere near the real cost of operation with the measures that have been provided under, say, the Brooke amendment. Senator BROOKE. Mr. Schermer, I thank you very much. Again I want to apologize for having to rush you, and also Mrs. Dolbeare. Your testimony is certainly very important to us. We are, of course, fortunate we have your statement for the record, and we can ask you for answers to any questions committee members may have. Again I want to thank you for taking the time to appear before this committee. Mr. SCHERMER. Thank you. Senator BROOKE. And let us pray that we are going to solve the housing problem in this country. Now personally I am dedicated to solving this problem. Our chairman has a long history of dedication to improving housing and I think our committee in general, generally speaking feels the same way. Again I would express my appreciation to you and all of the witnesses who have appeared here today, and to our staff members who have done a very effective job in this area. Thank you very much. Mr. SCHERMER. Thank you, sir. (The full prepared statement of Mr. Schermer follows:) STATEMENT OF GEORGE SCHERMER, CONSULTANT ON UBAN SOCIAL PROBLEMS My name is George Schermer. My home address is 210 A Street N.E. Washington, D.C. I operate a consulting service in urban social problems from an office at the same address. I deeply appreciate the privilege and opportunity of appearing before you on the subject of the Crises in Public Housing. I have had personal administrative experience in public housing, having been employed by the Chicago Housing Authority from 1938 until 1940, the Detroit Housing Commission from 1940 to 1944 and as Detroit Area Director for the then Federal Public Housing Administration in 1944 and 1945. From 1945 until 1963, I served for eight years as Director of the Detroit Mayor's Interracial Committee and for ten as Director of the Philadelphia Commission on Human Relations. The social environment of residential communities, housing opportunities for racial and ethnic minorities and housing supply were among the major concerns of those two agencies. I started my consulting service in 1963. At various interva's until 1967 I served as consultant to Dr. Robert C. Weaver, the administrator of the Housing and Home Finance Agency and first Secretary of the Department of Housing and Urban Development. |