2. Demand for Housing.-Did not answer.

3. Cross-Section of Income.-Did not aswer.

4. Deferred Maintenance. This authority has been fortunate to date in that ordinary maintenance has not been postponed. However, at the continuing rate of accelerated cost increases over rent, ordinary maintenance will have to be cut back in approximately two years.

5. Management Reform.-Primary areas of management improvement have been electronic data processing of high volume accounting data and a continuing management training program. Management improvement is a constant practice, therefore, the financial impact of improvements is reflected currently. It might be noted that efficient management requires a certain amount of consistency in operating goals, standards, and reporting requirements. Confidence in a reasonably consistent pattern is difficult in the light of the Housing and Urban Development's history of repeated revisions and internal reorganization.

6. Vandalism and Tenant Responsibility.-Fortunately tenant vandalism and damage has been held to a minimum. The Authority believes that involvement of tenants in management is desirable from the socia viewpoint. However, involvement may add rather than subtract from management costs and should not be considered as a total answer to fiscal difficulties.

LOUISVILLE MUNICIPAL HOUSING COMMISSION

(Number of Units in Management: 5,467)

1. Impact of Inflation.-The net increase in operating receipts, compared to the total net increase in operating expenditures, and substantial increase in the number of employees, clearly reflect the effect of inflation on management operations. Total operating receipts have increased 20% from 1965 to 1970 while total operating expenses have increased 40% during the same period. A 40% increase in the total number of employees from December 1967 to May 1970 is a result of the number of force account employees used in the Modernization Program. The regular employee roster has increased only 10% over this period and the total number of units in management operation has, likewise, increased 10%.

2. Demand for Housing.-The demand in need for housing is clearly shown by the number of applications on file as of June 1, 1970. Turnover in existing units is about 900 per year.

3. Cross-Section of Income.-A concerted effort has been made in the last six months to achieve higher rents by placing higher income tenants in existing vacancies. During the first three months average rent was raised $2 per month. In the remainder of the six month period, the rents began to slip back, since the supply of higher income tenants was exhausted. Louisville is now developing smaller projects on a scattered site basis, which we fell will make public housing more attractive to the general public. This method might draw some of the higher income tenants into the application pool.

4. Deferred Maintenance.-Did not answer.

5. Management Reform.-As far as Louisville is concerned, we do not feel that our management practices are a detriment to the financial situation.

6. Vandalism and Tenant Responsibility.-Vandalism and tenant destruction of property are words which are overused. This problem exists in all of the larger cities and is reflected in, not only public housing, but in schools, public buildings and even in private enterprise. If authorized funds for tenant service staffs were made available to local authorities much of this problem could be reduced and corrected.

MINNEAPOLIS HOUSING AUTHORITY

(Number of Units in Management: 7,642)

1. Impact of Inflation.-The Minneapolis Housing and Redevelopment Authority has been faced with serious financial problems recently. Our expenses for operating low-income housing are increasing at the rate of 3% per year, while the income of our tenants is remaining relatively stable. Our operating expenses would be increasing at a greater rate except for the fact that we have added substantial numbers of new Elderly Housing, which is relatively maintenance free during its early years of operation. In operating a low-income program, the majority of which is for the elderly, we do not have many of the costs of operation that are found in the housing authorities of our large Eastern cities, but

even under these circumstances, financial difficulties in the near future will occur unless we reduce services, primarily maintenance, to the point where our presently standard housing becomes substandard. If a formula for financing operating expenses is not forthcoming, Minneapolis will be in serious financial difficulty in next year's operation.

2. Demand for Housing.—Did not answer.

3. Cross-Section of Income.-It has been suggested that lha's consider housing families and elderly on a selected basis within a range of incomes so that the higher-income poor family and elderly will provide additional rental to meet operating expenses. We do not see any possibility of achieving higher rents through a cross-section of income occupancy because almost all of our applicants are very low-income families and elderly persons and, regardless of the selection process, we could not substantially increase our rents. We do not see the possibility of a solution to public housing's financial problems by this method and we also have serious questions as to whether or not public housing should exclude lowest income families in favor of higher income families since those with the lowest income obviously have the most difficulty in finding suitable housing. 4. Deferred Maintenance.-Did not answer specifically, see reference in answer to question #1.

5. Management Reform.-It has also been suggested that we reduce costs by introducing efficiencies in the operation of low-income housing. We believe that we have accomplished this in the Minneapolis program. However, no matter how efficient we become, costs continue to rise in these inflationary times without a corresponding increase in the income of tenants.

6. Vandalism and Tenant Responsibility.—Did not answer.

WASHINGTON, D.C. (NATIONAL CAPITAL HOUSING AUTHORITY)

(Number of Units in Management: 13,042)

1. Impact of inflation.-In 1969 the results of inflation became obvious as the National Capital Housing Authority ended the Fiscal Year with a budget deficit of $910,000. The Authority Annual Report for 1969 detailed a comparison of income and expense for Fiscal Years 1962 and 1969: "In Washington, D.C., the operating expenses of the NCHA have increased a total of $17.43 per dwelling unit per month (almost 33%) since 1962, although rental income has increased only $6.77 per dwelling unit per month (about 12%). Expenses would have increased even more had the Authority not cut back severely on extraordinary maintenance and capital improvements (down 67%) to balance uncontrollable increases in utilities (up 36%), maintenance and operations (up 108%), and administrative expenses (up 62% ).”

The traditional approach to financial difficulties over the years, which has been to require a local authority to increase its income or cut expenditures or both, has lost its validity. We believe a new approach is necessary. Operating subsidies are needed to finance quality housing and services for disadvantaged families. We ask the Congress to affirm this year that the new concept of providing operating subsidies authorized in the Housing and Urban Development Act of 1969 was intended to be a continuing transfusion to bring new life to a dying program and give local authorities adequate resources to do their job, and not a one-time injection. We urge the committees concerned with housing to see that adequate funds are appropriated to implement these subsidies and to see that HUD disburses them in accordance with the will of Congress.

2. Demand for Housing.-Presently there are 4800 applicants on the waiting list.

3. Cross-Section of Income.-The concept of an economic mix among tenants has validity from both a social and financial point of view. However, a local authority must have the flexibility to respond to the particular housing needs of the community it serves. In Washington, 39% of the persons on our waiting list for housing are elderly applicants who fall mostly into the lowest income brackets. Another 46% represent large families, many with severely limited incomes who have waited five or more years to move out of substandard living conditions. Government programs have displaced families and individuals who cannot afford to buy or rent adequate housing on the private market and many more will be displaced by urban renewal programs in the near future. We cannot tell these people that financial solvency must take precedence over their housing

need. Unless job opportunities and wage scales for low-income residents of the District of Columbia improve substantially, our income-expense gap will remain so long as we attempt to serve the families who need decent housing.

4. Deferred Maintenance.-Maintenance and capital improvements have been cut back 67% since 1962.

5. Management Reform.-Efficiency and economy are admittedly important aspects of any authority's operations, and this Authority recently requested a review of its operations by a task force of housing experts to evaluate the strengths and weaknesses of its program. In response to some of the panels' recommendation, we have begun to implement a series of internal changes, including a staff reorganization and installation of an automatic data-processing system. But Authority actions can have little impact on such significant budget items as Federal salary scales, costs of materials, and utility rates which continue to increase uncontrollably and to have an important effect on the level of operating expense. And there is a real danger that if local authorities are forced to arbitrarily limit expenses to a certain level in order to keep the budget balanced, the results might be cuts in essential services which would make public housing into a program of poor housing for poor people.

6. Vandalism and Tenant Responsibility.-Tenant assumption of the "responsibilities" of caring for their homes and working with their neighbors to improve their community is clearly an important goal of our program. But it is naive to think that this goal can be achieved without provision for significant tenant "rights," including the right to an input in management decision-making and the right to an adequately maintained unit. It is hypocritical to expect tenant responsibility if an authority cannot even fulfill its own obligations for maintenance and services due to limited funds.

NCHA is committed to increasing tenant involvement in the operation of its program through a city-wide Public Housing Advisory Board and through local resident councils, but we do not believe that either tenant rights or tenant responsibility can fully resolve the tensions in low-income communities. The anti-social behavior and vandalism which plague our program reflect a societal disjunction which goes far beyond the control of any individual tenant council or neighborhod group. And to expect window breakage to decline in inverse proportion to increased tenant responsibility is an over-simplification of an immensely complex problem.

NEWARK HOUSING AUTHORITY

(Number of Units in Management: 13,935)

1. Impact of Inflation. The primary cause of the vast increase in the operating costs of the Newark Housing Authority is inflation. Total Routine Expenses have risen from $55.86 in fiscal year 1967 to $75.43 in fiscal year 1970. This 35% increase in expenses was much greater than the 9.7% increase in total Operating Income for the same period: from $60.39 in 1967 to $66.23 for 1970. Labor costs alone rose from $17.56 PUM in 1967 to $27.01 in 1970. Without the funds for Extraordinary Maintenance avialable from HUD's Modernization Program, routine operating costs would be even greater.

2. Demand for Housing.-The demands made on the Newark Housing Authority for housing by very low income families are enormous. Of 5,396 families, the current total number of applicants for public housing in Newark, fully onethird-approximately 1,800-have an income of $2,600 or less. Indeed, very few of these applicants make more than $4,200 a year. Families characterized as elderly now comprise fully 40.6% of all families living in Newark's public housing. Of the current applicants, 1,069 fall into this traditionally low-income group. Of these, fully one-third have incomes of less than $1,600.

As for displaced families, the median income of Urban Renewal site residents is $4.200; 2.600 such families are to be relocated. About one-third of this number of families make less than $3.700 a year: 500 families are classified as elderly, and fully one-third of these have an income of $2,300 or less. Very few of these prospective tenants of public housing have an income of over $7.500. It is estimated that 30,000 new dwelling units are now needed to house Newark's current population adequately. A good percentage of these units will have to be public housing. But at present, only 826 units units of public housing are pending construction. And of these, 366 have been designed for elderly. With

a current vacancy rate of only about 3%, the crucial need for an expanded public housing program is obvious.

3. Cross-Section of Income.-The immediate possibility of establishing a mixedincome population in Newark's public housing hardly exists. The primary obligation of any public housing authority must be to those persons who cannot afford a decent dwelling in the private realty sector. As the United States Congress affirmed in the Housing and Urban Development Act of 1968, public housing must seek the national goal of a "decent home and a suitable living environment for every American family." The current number of public housing units is inadequate even for the low-income population it was designed for. Also, the practice of using a fixed portion of each tenant's income for rent has tended to make public housing unattractive to "middle- and upper-income" families of the low income starta. Other factors, such as the location of the public housing projects, and various prejudices against low-income and black families, have further militated against achieving a variegated income population in Newark's public housing.

4. Deferred Maintenance.-Without the funds made available for the Modernization Program, much routine and ordinary maintenance would remain in abeyance. It follows then, that unless additional money is available for ordinary, every day maintenance, much of such routine work has to be postponed.

5. Management Reform.-The Newark Housing Authority reorganized its staff structure as of December 1, 1969, and at the same time instituted certain economies which resulted in financial savings. But management reform is not an elixir which will provide for the Authority's short- or long-term financial needs, as the reply to this question should indicate. Aside from the inability of income-mixing tenants in public housing in Newark, the increment in special services carried out by the Housing Authority such as social services, police services, etc., without any appreciable increase in subsidies or operating income, has made economies through management reform almost insignificant.

6. Vandalism and Tenant Responsibility.-Increased vandalism and tenant destruction is also partly responsible for the opearting costs increase. A limited tenant services staff might contribute towards the reduction of vandalism and tenant destruction, but the roots of the problem lie in other areas: the intrinstic poverty of the tenants, their feelings of alineation from the mainstream of societal and political life, and most important, their lack of hope for real improvement.

NEW YORK CITY HOUSING AUTHORITY

(Number of Units in Management: 84,383)

1. Impact of Inflation.-Salaries paid to Authority employees and routine operating expenses for projects continue to rise at a rate of approximately 6% per year. The income of tenants, however, have been rising at a rate of only 2% to 3% per year. The gap between revenues and expenses thus widens as inflation continues. The Authority has managed to stave off the ocmplete exhaustion of reserves by devices such as increases in rents for welfare tenants. It has no further such gimmicks in view. Unless HUD gives effect to the Sparkman amendment by making subsidies available to meet operating costs, the already inadequate reserve funds of this Authority will dwindle rapidly and will be exhausted within the next few years.

2. Demand for Housing.-The need for low-rent housing in New York City is tremendous. More than one-quarter million families living in grossly substandard quarters have incomes so low that their only hope for obtaining decent quarters is through public housing. The Authority currently has on its waiting lists 135.000 eligible families who have filed applications for admission during the past two years.

3. Cross-Section of Income.-This Authority always has housed a cross-section of low-income families. The gross incomes of tenants residing in Federallyassisted projects ranges from less than $2,000 to approximately $10,000.

The proposal that we attempt to solve our financial problems through the admission of higher families is completely unrealistic and impractical. Turnover in our projects amounts to only 5% or 6% per year, negating the potential for a change in admission policies to have any appreciable effect upon revenues in the near future. Furthermore, adoption of the policy of admitting greater proportions of higher income families would completely subvert the long established

policy of this Authority, which the entire community knows and will resist changing, of selecting tenants strictly on the basis of the degree of need for housing.

4. Deferred Maintenance.-This Authority has adhered to the policy of maintaining its projects in good condition, following sound and prudent business practices. The Authority has refused to neglect or postpone necessary maintenance just as any responsible owner will do.

5. Management Reform.-Several reforms of management practices have been instituted by the Authority. Management of nearby projects has been consolidated under the supervision of one manager. Tenant associations have been formed, with the help of the Authority, in all projects. The Authority further, has stimulated the organization of voluntary tenant patrols in many of is projects to supplement its paid stag of Housing Officers.

Savings may be realized some day in the future as a result of the foregoing reforms. If such savings are realized, they will at best have only a minor effect upon overall operating costs. For the time being. no savings have been realized. 6. Vandalism and Tenant Responsibility.—This Authority has for several years had a limited tenant services staff and has had tenant organizations in most projects. Vandalism and tenant destruction of property is not a problem of serious proportions.

OAKLAND HOUSING AUTHORITY

(Number of Units in Management: 4,096)

1. Impact of Inflation. The effect of inflation on operating costs in the last few years is graphically shown in the following figures: 30% increase in labor and materials; Insurance has gone up 5 times, from a fire rate of 44¢ per $1.000 with $1,000 deductible to $2.03 per $1,000 with a deductible of 10% of the cost of the building; total operating expenditure was $42.11 PUM in 1965, $59.62 in 1969 for an increase of 41.6%; residual receipts before reserves was $10.18 in 1965 and has deceased to $.26 PUM in 1969.

2. Demand for Housing. The present waiting list of non-agency-displaced households is approximately 3,000 and is increasing at a rate of 200 per month. It is projected that the low-rent housing needs of various State and Federally assisted agencies will reach 1,434 by 1973.

3. Cross-Section of Income.-The immediate possibility of having a crosssection of income occupancy to achieve higher rents and solve financial problems is doubtful in light of the following: 90% of tenants are on some type of Welfare, 65% are on AFDC; the present waiting list is over 3.000, of this number a ratio of 5-1 are on welfare; turnover averages 3,800 units or 15 per month. 4. Deferred Maintenance.-Due to lack of funds the Authority has had to postpone the maintenance program. We have increased our maintenance staff only 15-20% from a total of 40 in 1969 to a total of 70 in 1970. Ordinary maintenance and operation increased from $15.13 PUM in 1965 to $23.49 PUM in 1969 an increase of 55.2%.

5. Management Reform.-During the last year the Authority has undertaken re-organization of the Central Maintenance Department, computerization of the Accounting Department and we are in the process of implementing the Modernization Program. We are constantly looking at our management operations and their costs. Changes are being made, with efforts to improve the economy and efficiency. We are reviewing our policies and procedures, the dwelling leases. and the education of our staff, including a college-credit course set up in conjunction with Laney College of Oakland.

6. Vandalism and Tenant Responsibility.-The LHA has a very limited Social Services Department because of the requirement that the money come from management funds. HUD Circulars tell us to get into this field more, but they do not give us the money to do a job.

OMAHA HOUSING AUTHORITY

(Number of Units in Management: 3,613)

1. Impact of Inflation.-The financial crisis of the Authority was brought about by two things: our dwelling rents were too low and, with the introduction of the Modernization Program, our reserve funds were reduced by $180,000.