OCTOBER 10, 1969 The White House The President today announced another in the present series of task forces that are being established to assist the Administration with ideas and recommendations for 1970 and beyond. Raymond J. Saulnier, Professor of Economics at Barnard College and former Chairman of the Council of Economic Advisers, will be chairman of the Task Force on Low-Income Housing. The task force will review what the public and private sectors are now doing in the field of low-income housing and recommend measures that aim to increase substantially the number of dwelling units available to low-income families. The members of the Task Force on Low-Income Housing are: Preface The housing problems of the United States, growing more difficult and more pressing all the time, are not limited to those faced by low-income families. Clearly, however, it is low-income families, and particularly low-income families living in ghetto areas of our cities, whose needs in this respect are greatest and most urgent. The conditions they face have been documented in one commendable research report after another and with the bulk of these findings, and with many of the action proposals based on them, this Task Force is in agreement. Certainly it shares the sense of urgency that earlier reports convey. Without attempting to plow ground over again, this report concentrates on certain key recommendations which it is believed will help improve the housing conditions of low-income families in the near term and, over the longer run, help produce a better all-round performance for the nation in the housing area. 48-279 - 70 pt. 2 50 CHAPTER I Financing It is absolutely essential in any program to better the housing situation of low-income families that a reasonable share of the current flow of savings finds its way-preferably through the operation of a free market for capital and credit—into the financing of residential construction. As things are, however, the housing market literally is being starved for financing. It is imperative that steps be taken to correct this condition, and there are things with promise of benefit that can be done. Naturally, interest is greatest in steps that can have impact in the near term, but long term measures should not be ignored. The most basic need is for an anti-inflation program that relies more than does the present program on a federal budget surplus, and a large one. The absence of adequate fiscal restraint in an inflationary economy compels severe and extended monetary restraint and results in soaring interest rates, sharply reduced savings flows and severely restricted availability of mortgage credit, especially for low-income housing. Accordingly, the Task Force 1. ENDORSES the Administration's request for extension of the surtax but notes that, from the point of view of assuring a better flow of savings into the housing industry, it would have been better to have an extension at the original ten percent level and continuation of this rate past July 1, 1970. Given as much insulation from the impact of tight money as a hefty federal budget surplus can provide, what is needed next are steps to make the mortgage market more flexible and more adaptable to changing economic and financial conditions. An essential step toward this end would be to make the return on loans insured or guaranteed under federal programs more competitive with alternative uses of funds. To this end the Task Force 2. URGES that statutory ceilings on FHA and VA home loan interest rates be removed permanently from the law, not merely suspended temporarily, and that no administrative ceilings be imposed in their place. The object would be to allow these rates |