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The site must be acceptable to the municipality as well as to Ontario Housing Corp., and the lender—which in this case is Central Mortgage and Housing Corporation, the Federal housing agency. And of course the private developer does all the legal work in terms of zoning and getting building permits to go ahead.
The housing can be produced under two different sections of the National Housing Act. One which provides for a partnership arrangement between the Federal-Provincial governments of the order of 75 percent—25 percent in terms of capital costs and operating losses. The other arrangement comes under section 36, of the National Housing Act which permits the Ontario Housing Corp. to borrow 90 percent of the costs from the Federal Government, with the Province of Ontario supplying the 10-percent equity. Operating losses are met 50 percent by the Federal Government, 42% percent by the Provincial government, and 72 percent by the municipality.
As I said earlier, at the end of 1964 the Province of Ontario had 6,000 public housing units under administration. By the end of 1971 they will have 60,000 units under administration. The record of the Ontario Housing Corp. in the production area I think is impressive. In 1965 they accounted for 1.8 percent of the total housing starts in Ontario, in 1970 12.5 percent.
By the end of 1971 with other programs initiated by the corporation in the rent-geared-to-income program, condominium housing, and homeownership under leasehold arrangements the Ontario Housing Corp. will account for approximately 25 percent of the housing starts. In other words, they will account for one out of every four housirg starts. In fact, the Ontario Housing Corp. is the third largest producer of public housing in North America, being behind only New York and Chicago. There are people in our country, of course, who are saying that this is too much of an intrusion by government in the housing field. I am working on a committee of Government Production established by the Province of Ontario to look at ways and means of increasing the participation by private enterprise in the residential housing field. Naturally these houses are not built by the government, they are built by private industry. And we think the builder-proposal technique has worked out very effectively in terms of the product we are getting both in terms of the quality and cost.
The Ontario Housing Corp. has also undertaken recently-1966—to get involved in student housing programs under the same builderproposal technique. At the University of Western Ontario student beds were running in capital costs from $10,000 to $11,000 each. Under the builder-proposal technique we are getting a price of $6,000 per student bed. So obviously there is some merit to this approach-nor do we have to sacrifice quality of design or end product.
I recall another example in Windsor, right across from Detroit, where we had plans and specifications prepared for a town housing development on municipally owned land; and the tender price was something of the order of $19.500 or $20,000 per unit which we thought was too high for low-income housing. So we called for proposals from merchant builders. The lowest price received was $13,500. Now, I don't think there was that much change in the product either. But the technique allows the builder to take full advantage of all his expertise in terms of development. The builder, the architect, the planner, and the engineer work as a team providing a climate of economic efficiency.
The corporation today--I am talking about the Ontario Housing Corp. is now directing tis interests toward the promotion of homeownership by means of controlling the price of housing on land developed by the corporation. I know Dr. Weaver said in his statement here this morning that he favored, if I understand him correctly, the acquisition of land by government for price control purposes. The Ontario Housing Corp. has done a great deal of this during the past 4 or 5 years. They picke lup 3,000 acres in the Kitchener-Waterloo area, and 4,000 acres in Metropolitan Toronto and another 900 acres in Metropolitan Hamilton. The Government is working jointly with private enterprise to insure that a substantial portion of these land holdings are directed to people in the low- to moderate-income field, both for rent and/or purchase.
The government controls the operation by virtue of the fact that loans under condominium arrangements are only made where the selling price of the units does not exceed the established limits, these being $15,000 for three-bedroom units, $16,000 for four-bedroom, and $17,000 for five-bedroom units. This is for building only, the bricks and mortar part of it. Land, municipal underground services, and other carrying charges are not within these limits.
Now, on the property management side the Ontario Housing Corp. is experiencing a fair amount of difficulty because they are directly managing about 50 percent of the public housing real estate. Now, to be a private landlord today is a very difficult operation certainly in Ontario. There is no glory in being a large landlord. And there is certainly a lot less glory in being a large public landlord.
Moving in the direction of decentralization of real estate management to local housing authorities, we think this is an area where you have shown considerable leadership in this country. I certainly like the idea of your urban development corporation, and I like the idea of your block grants to communities. Citizen participation in this sensitive area is just plain commonsense. There has got to be a municipal input in social housing. In our earlier years we in Canada, being greatly impressed by our American cousins, followed the mistakes you made in public housing in considerable detail. In fact, we carried out your mistakes religiously, assiduously, and on occasion with undue alacrity. I was fearful for a time that that was going to be our continuing national policy. But we have all grown up to a considerable extent. And I think now we are proceeding with our housing programs in much the same manner.
The Ontario Housing Corp. is also proceeding to sell some of their public housing units. They have a sales program underway now in 16 municipalities, where the units are offered to the tenants on the most generous terms possible, in order to encourage homeownership. The down payment is 5 percent. The amortization terms are going to be up to 40 years. And the interest rate is something like 774 percent, which is high in this country, but is low in our country; our conventional rate now is 912 percent.
During the year 1970 the Federal Housing Agency, Central Mortgage and Housing Corp. injected over $200 million in a low-cost housing program, which was intended to place housing within the reach of families earning $4,000 to $6,000 per year. The Federal Government was offering low-interest rates to private developers whereby the rents would be controlled in the case of rental projects,
and whereby the selling prices would be controlled in the case of homeownership projects. One project was built in Montreal, Quebec, containing 1,000 units in all and was on display on Labor Day weekend in September 1970. The model homes were visited by over 5,000 people and within a few days of the display all of the 1,000 units had been sold. The sales prices ranged from $11,000 to $14,000, accommodating families earning $5,000 per year. So we think this was a good exercise between government and private enterprise; certainly we are going to see more of this in Ontario.
The current thinking in Ontario seems to be that the government can play its greatest role in creating a climate in which private enterprise can produce the necessary housing to meet the growing demand in the low- to moderate-income range.
My time is running out so I will just sum up by saying that the provisions that I read that are being considered by this committee in terms of local input, local control, and local allocation, and the development of these new corporations that have the muscle and expertise to provide this housing in an efficient manner, should certainly get your very serious consideration, and hopefully your favorable consideration.
Thank you very much.
Mr. BARRETT. Thank you very much, Mr. Brady. I appreciate your statement.
Before turning to Mr. Widnall, I want to pause just for a second. We have a great Congressman, John Young, from the State of Texas. He wants to make sure that all the homes and churches, when there are tornadoes or floods, are properly insured. I would like to turn now to Hon. John Young of Texas for a statement.
STATEMENT OF HON. JOHN YOUNG, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. Young. Thank you, Mr. Chairman.
Mr. Chairman and members of the committee, I deeply appreciate the honor and the privilege of being here today and being able to appear before you in the interest of
in the interest of a very small and restricted bill which I have introduced, but which I find to be quite important in the general housing picture with regard to insurance.
I want to commend the committee on the great work it has done in all this field of housing, and especially in the field of coverage of insurance in high risk areas. I recall
, as I know you do, the great work done by this committee back in 1956, before I was a Member of the Congress, and later in 1957, when we tried to get the insurance bill funded, but my colleague from Texas, who is now deceased, unfortunately, didn't see it our way, and we were unable to get the funds to put this matter into execution. It was some years later, about 10 years later, that this committee, in its persistence and drive to meet this need, did accomplish this very thing, and we now have this very fine national flood insurance program.
Now, through a series of administrative decisions I find that churches are excluded from coverage under the program.
I was very much surprised at this, because of course churches are in a unique position, they are nonprofit and I really feel like they need to be covered, and that they have been neglected.
Mr. Chairman and members of the committee, there has been considerable interest in this. In my district alone there are more than 40 churches of all denominations that are very eager for this coverage. I have been contacted by Mr. John Novitny, who is the Washington correspondent for the Religious Newspaper Service, who apparently saw the notice of the bill that I introduced, and he indicates that the churches throughout the Nation are quite interested in this coverage
So, Mr. Chairman, with the permission of the committee, I would simply like to enter my remarks in the record, and to also enter a partial list of the churches in my area that urgently need this coverage.
Mr. BARRETT. That may be done without objection. And it is so ordered.
(The partial list of churches in the 14th Congressional District of Texas in need of flood insurance referred to by Mr. Young follows:)
PARTIAL LIST OF CHURCHES IN 14TH CONGRESSIONAL DISTRICT OF TEXAS IN
URGENT NEED OF, BUT UNABLE TO OBTAIN FLOOD INSURANCE UNDER
GOVERNMENT PROGRAMS OR FROM PRIVATE SOURCES Aransas Pass, Tex.
Rockport, Tex.-Continued Assembly of God Church
St. Peters Episcopal Church First Baptist Church
First Presbyterian Church Second Baptist Church
Peace Lutheran Church St. Marys Star of the Sea Church
First United Methodist Church First Christian Church
Portland, Tex. Church of Christ
Assembly of God Church Episcopal Church
First Baptist Church First Presbyterian Church
Our Lady Mount Carmel Catholic First United Methodist Church
Church Faith Lutherans Church
Church of Christ Church of the Nazarene
St. Christopher by the Sea Church Ingleside, Tex.
St. Stephen Lutheran Church Assembly of God Church
Presbyterian Church First Baptist Church
First United Methodist Church Templo Bautista Catholic Church Corpus Christi, Tex. Church of Christ
North Beach Baptist Church Ingleside United Methodist Church Flour Bluff Church of Christ Rockport, Tex.
Flour Bluff First Baptist Church First Assembly of God Church
Our Lady Star of the Sea Church
Church of Christ
Trinity by the Sea Episcopal Sacred Heart Catholic Church
Church Church of Christ
St. Joseph's Catholic Church Rockport Church of God
Mr. Young. And I deeply appreciate the committee's indulgence.
I for one appreciate the very effective statements that have been given by all members of the panel. There have been some very thought stirring comments.
Dr. Sternlieb, I know how familiar you are with the problems of New Jersey. You have been on top of this situation on the State, local, and county level for some time. We have had two problem areas on housing where there have been explosions in the last couple of years, Newark and Plainfield. From your own knowledge of the happenings there, was housing one of the prime causes?
Dr. STERNLIEB. I think housing certainly was very central to both eruptions. We are presently conducting a survey in Newark. As you recall, it has been 4 years since the riot. I can best summarize our findings by just a simple number. In 13 months ending this June there were approximately 1,400 housing units demolished in Newark. There were 43 new housing units built in Newark in the same 13 months. We don't seem to have learned a great deal in those 4 years.
With the depression that is taking place, the level of housing conditions has worsened.
We now have—we have used this rhetoric so frequently that the phrases are tired—but we have a situation in the public housing units there—which is on the thin edge of revolutionary. People are simply not paying their rents. The data on who has paid rent and who hasn't paid rent is so unclear that it would take all the certified public accountants in the United States a century to figure out what has gone on in the past year. The gap between the legislative requirements and the functional realities has never been wider.
Mr. WIDNALL. What is most urgently needed to get some real action?
I know of one project up in Newark in connection with which I have had a considerable number of communications and visits, the Stella Wright public housing project, where I believe there is a rent strike in progress. That whole situation seems to be deteriorating because nothing has finally been resolved. Can you report any progress on that?
Dr. STERNLIEB. There is no progress to report. There is a state of little fiefdoms within the city-and I don't think this is unique there—in which the public housing authority and the mayor's office and several of the other little mayors each occupy their own castle, and periodically make raids on each other's preserves. The only analogy is a medieval analogy. Stuck in the middle are the tenants, the citizenry, who don't really know where to turn.
Mr. WIDNALL. New legislation isn't going to solve that, is it?
In Plainfield, which was the second city that you mentioned, which similarly had a riot in 1967, we have another variant. Plainfield is an older suburb, with good solid housing, and mixed occupancy. About half of the new home buyers in our survey-when I say new homes, there are no new homes here, these are people who are buying homes currently—are black. These are middle-class aspirants. They are running away from the Newarks. They are doing what middle-class people try to do to improve themselves. And in Plainfield they have a city which is going bankrupt, and which has a tax rate which is practically unendurable. The new minority home buyer stretches himself and his wife and the kids who are working, to buy a house. And then they face an annual increment in the local tax rate of 10 percent a year compounded annually over the last 5 years. Instead of being a sort of zone of emergence, a safety valve, a rung in the ladder