SENIOR CITIZENS' VILLAGE Sponsored by the CALIFORNIA INSTITUTE of SOCIAL WELFARE Mr. RAINS. I have your feeling that while the housing program for the elderly under FHA has merit, there are still a great many people who cannot pay the high rents which must be charged. I would be happy if projects such as yours could be financed otherwise. I will yield first to my good friend Clem Miller from California. Do you have a question? Mr. MILLER. Mr. Chairman, I am certainly grateful that George McLain is here to speak on behalf of the elderly. He has been a stout fighter on their behalf for many years and I know he has been in my office many, many times on this subject of how he can finance dwelling units for them at a price that they can pay. As he has said $75 and $80 is not the price that we are talking about. I am hopeful of introducing on Monday a proposed amendment to this legislation which would give people like George McLain, who have pioneered in housing for the elderly, the same rate that we are going to be giving to other developers if this legislation is successful. I certainly sincerely hope that his pioneering efforts will result in praise and reward rather than in being penalized as he has indicated might happen if terms are not made retroactive or if an amendment which would not include units such as his within the purview of our consideration. I want to commend him for his statement and the detailed analysis he has made of the heavy carrying charges which must then be saddled on people who cannot afford them. I don't have any questions, but I want to thank you for his opportunity of making the statement. Mr. RAINS. Now another real good friend of housing for the elderly from California, Mr. McDonough. Mr. MCDONOUGH. Mr. McLain and I have known each other for years and I know of his determined efforts to do the best for elderly in California and other parts of the Nation. I was hopeful that his application for this project in Fresno might have been converted to the direct-loan feature rather than FHA immediately after the direct loan became effective. You did make efforts to obtain that, didn't you, Mr. McLain? Mr. MCLAIN. Unfortunately, Congressman McDonough, the House was not as considerate as was the Senate. As you will recall they cut down the direct loan from $50 million recommended by the Senate down to $5 million and then finally they compromised at $20 million. Mr. RAINS. Let me correct you. That was the Appropriations Committee, Mr. McLain, that wasn't us. Mr. MCLAIN. I stand corrected. Thank you very much, Congressman Rains, it was the Appropriations Committee. The result was you had $20 million to divide among 50 States. The result was they had to make the loans very limited, to not more than 50 units. That left us out because it has been our experience that these projects to arrive at the low rental have to be a large one where you can put in a community center and spread it thin among all of the renters and that was the reason why we tried awfully hard, but we couldn't cut the mustard. Now I have read the paper, I don't know whether I read it correctly, you gentlemen are experts, but it looked like the $100 million was cut down in committee to $50 million. Mr. RAINS. I don't know what the Senate did on that. According to our information the Senate Subcommittee put in an additional $50 million which would make $100 million. Mr. McLAIN. I see. Mr. McDONOUGH. Now on the recommendations Mr. McLain has made to the regulations of FHA for elderly housing, I think that this could be construed as special assistance and should be construed as special assistance to a particular group of people seeking housing. The thing I am thinking about however, is if such special assistance is granted, that is the rates are reduced to meet the recommendation that you are making that those people who are eligible are not only elderly but also eligible because of their income limitation. You can't just simply say this is elderly housing for all elderly housing people because you may get people in it that could pay higher rent than you would charge. Mr. McLAIN. I think that that point is well taken, Congressman McDonough, that wherefore the Government makes any consideration in this field it in turn should be for the benefit of reducing the rentals. Mr. MCDONOUGH. And to people who are eligible for that type of aid. In your experience with this application do you know of any other nonprofit group in the United States that went through it at about the same time that you did and that had difficulties? Mr. McLAIN. I don't know of any nonprofit corporation that consists of elderly people that has gone into this approach to seek lowrent housing for the elderly. I don't know of any other group in the United States under the housing for the elderly. Now there has been a considerable amount of activity in that field, but it is for life care to where the elderly person has to be an affluent person putting up anywhere from $7,500 to $35,000 to get into the place and then they pay $185 a month for life care, including furnishing their place, and when they die the money they post goes to the nonprofit corporation. Mr. MCDONOUGH. What about the fraternal organization groups and beneficient organizations that don't have these people as members. Have they operated under FHA applications? Mr. MCLAIN. I don't know. Of course we know the fraternal groups have been in the field for many years where they have provided a certain amount of housing, like the Moose and Masonic and different ones that have gone into that field that I have been aware of. Of course I have had my nose to the grindstone on this one so heavily that I have not had an opportunity to go around the country and look at some of these other housing projects, but I do know that we are practically the only ones in the field that had the courage to go into this to try to come up with low-rent housing for the elderly. Now in our endeavors in California, of course, since we are dedicated to charitable purposes for the entire existence of the corporation that owns the project and runs the project, we get a break on the taxes to the tune of about $9,000 a year on ad valorem taxes on the value of the land which I have not included in my speech. The way I see it, I do believe as I have pointed out here on page 6, the need for two approaches in the field of housing for the elderly, one the direct loan. and one the FHA insured loans with the provision that I have provided for here, because, for instance otherwise housing for the elderly would be stymied because we don't know what the Appropriations Committee is going to do in the future regarding making appropriations for direct loans and therefore all your program would be stopped 69408 0-61-28 |