(The resolution referred to is as follows:)

ENDORSEMENT OF SPARKMAN BILL

RESOLUTION NO. 653

Whereas the American Legion has consistently urged the formulation of a complete and well-rounded housing program for the aid of veterans of all income groups and at its last annual convention adopted a specific program for that purpose; and

Whereas the various specific proposals which have been advanced by the American Legion have been presented to Congress and, in part, have been enacted into law; and

Whereas the uncompleted portion of the Legion program is embodied in legislation now pending before Congress, known as the Sparkman bill (S. 2246), which includes, among others, provision for liberalization of existing FHA-loan-insurance and GI-loan-guaranty laws, a secondary market for GI loans and direct GI loans where private loans are not available, maintenance of the present 4-percent GI interest rate, elimination of the costly FHA-GI combination loan, direct Government loans to nonprofit veterans' cooperatives, and veterans' preference in the disposition of war housing; and

Whereas this legislation is expected to receive consideration in the near future at this session of Congress : Now, therefore, be it

Resolved by the American Legion in convention assembled at Philadelphia, Pa., August 29-31, September 1, 1949, That the national legislative committee of the American Legion be instructed to exert every effort to secure its speedy enactment into law;

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Mr. DEANE. Assuming that you had a block of land and it is acquired as a cooperative, with each individual member building his own home, this would be a cooperative effort in your views?

Mr. DINGER. No; I am speaking about the development of a housing project, where you have plenty of land that can be acquired at a reasonable rate and the construction of individual houses, individual free-standing housing in a project, such as this Baton Rouge project. Mr. DEANE. That is what I am speaking about. Here is a block of land but it is not built as one unit but built as separate units.

Mr. DINGER. That is right.

Mr. DEANE. On page 3 of your statement, you say:

We feel strongly, however, that the committee should give very careful consideration to the reasons presented for providing that the program be administered by a division director in the Office of the Administrator, rather than by a constituent agency as proposed in the original title III.

Please go into detail and explain why you take this position.

Mr. DINGER. Various veterans' organizations and public-interest groups who have been working for the past 2 years on this program have developed the thinking, through their experience, that the present FHA local offices often have no desire to give too much thought to this cooperative idea. I think probably some of the other witnesses might be able to testify a little more in detail on that subject, but there is a general feeling that if this isn't put into a constituent agency, where it will have special consideration, specialized administration, that it may get lost in all of the various other programs and responsibilities of the Housing and Home Finance agencies.

We feel as though this is a step, a new step, in a direction which we haven't ever experienced in this country before and we believe that it should have special emphasis in the attitude at the administrative level and, also, at the local offices level.

Mr. DEANE. I can appreciate that this is a program which, if initiated, will need vigorous, strong leadership, but what concerns me is

the growth of an administrative unit, both at the Washington and State levels.

Mr. DINGER. I think it would be very desirable to have a person specialized in this background of this program in your local offices. I think that that could be handled within the present local offices that you have, but I think there should be some person there given the special responsibilities of handling this cooperative program.

Mrs. WOODHOUSE. Referring to the personality of the person heading up this program, whether he is the head of a constituent agency or the head of a division, if we are going to set up a constituent agency with every new type of policy, are we not going to have a fearful conglomeration of only semicoordinated units, and do you not think in time we should have an over-all coordinated housing program?

Mr. DINGER. Yes; I think there is a lot in what you say, although it is our position that it should be a constituent agency. As I said previously, I am probably not as well qualified to speak on the reasons as to why it should be that way than some of the others, Mrs. Woodhouse.

Mrs. WOODHOUSE. Do you not think that local FHA officials have not been very cooperative?

Mr. DINGER. That has been our experience.

Mrs. WOODHOUSE. And the division of the FHA would not have to do with this particular program. It would be handled by the director of the division?

Mr. DINGER. At the Washington level; yes. Of course, our complaint does not come from the Washington level. Our complaint comes from the local level, from the field offices, where there just isn't too much recognition of this cooperative method of developing houses. Mrs. WOODHOUSE. If I might make the suggestion, I think it would be a very good thing to bring specific cases of noncooperation of this type of thing to the attention of the people here on this committee, because I think we all want the FHA to serve the public it is supposed to serve and not just set itself up as a hierarchy.

Mr. DINGER. I think other witnesses that will testify will go into detail on that subject.

Mr. DEANE. I am glad you made the statement that you think the bottleneck is not at Washington level but at the State and local levels. Mr. DINGER. I say that that is where our complaints come from. We have no complaint with the operation of it at the Washington level, because they fit right into the title II program.

Mr. DEANE. That applies to the housing program in general, so far as the cost of living is concerned?

Mr. DINGER. I beg pardon.

Mr. DEANE. I say you have no complaint on the programs from the Washington level?

Mr. DINGER. No. I think the answer to your question is no, if I understood it correctly. Do we have any complaint about the operation of the housing administration here at the Washington level? Mr. DEANE. Yes.

Mr. DINGER. No.

Mr. MULTER. At that point, I know that in the New York region of FHA during the last year there has been a big change of thinking as far as cooperative housing is concerned and they are making every

effort to channel people into cooperatives. I think they have been doing considerable good work along that line. Is that in accord with your knowledge?

Mr. DINGER. Yes; I happen to know that especially in Oklahoma City and so far as I know throughout the State of Oklahoma that quite a number of cooperative housing programs are being developed and I think it is probably almost directly responsible to the State director of the program. I think that he has done a wonderful job there in getting the various interest groups and building people interested in that program, but that sort of administration of the program locally isn't a general experience throughout the country.

Mr. MULTER. I think in line with what Mrs. Woodhouse has suggested, this committee would be very happy to have any information as to any areas where there is not cooperation along that line or any other line within their jurisdiction.

Mr. DINGER. I believe I may have used the wrong word in saying there is not full cooperation. I would like to say that the general experience has been that the directors of the local offices have not been sympathetic to that approach. I have no facts to show that they haven't or have refused to have anything to do with it, but there is a general indication that there are other FHA programs which are more important and should receive priority in the operation of their local offices. I don't want to make any specific complaint on that question. I merely bring that up as a subject which was discussed by the various veterans' organizations and public-interest groups who have worked over the past 2 years in developing this housing legislation.

Mrs. WOODHOUSE. I failed to ask you one question on your cooperatives. What has been their size, Mr. Dinger? What has been your smallest number? How many houses, for how many families, have been built by the project?

Mr. DINGER. That is, your are speaking of projects developed bv American Legion posts?

Mrs. WOODHOUSE. That is right.

Mr. DINGER. I can get that information for you.

Mrs. WOODHOUSE. I would be very glad to have that because it is in line with what Mr. Rains was saying. I think that would be very helpful, because I would be interested in seeing what this bill would do. Mr. MCKINNON. Can you tell me if you have any figures that would show how many veterans in the middle-income class still need housing and are still looking for homes?

Mr. DINGER. I am afraid that those figures would be pretty hard to present. I believe the 1950 census, which we are just entering into, has the authority to make certain housing inquiries.

Mr. MCKINNON. It will be too late for us in studying this bill. Mr. DINGER. I think so. We are looking forward to getting quite a bit of detailed information from those surveys, but our estimates are based upon the reports that come into our housing committee through the local post housing committees and through the department housing committees and our estimate last year was that 67 percent of the veterans of World War II were within this middle-income group.

(Chairman Spence was called from the committee room and Mr. Patman took the chair.)

Mr. MCKINNON. Yes; but you don't know how many are looking for homes in that group.

Mr. DINGER. We don't know how many are looking for homes, but we do know that there is practically no housing available at prices that that income group can afford. There is no housing being made available, either rental or purchase, within the means of that income group. Mr. MCKINNON. În your $7,000 break-down, did I understand you to say that on $7,000 building, through cooperative building, you can cut $1,000 off of that?

Mr. DINGER. Yes; the Baton Rouge, La., group published that figure as the round saving that they realized through the cooperative efforts of this housing development.

Mr. MCKINNON. How did they break that down? $1,000 off of $7,000 making it $6,000, or $1,000 off of $8,000 making it $7,000?

Mr. DINGER. I am reading from a paper, a paragraph near the end of this brochure, which I have added to the record.

These houses provided an effective substitue for rental housing, since the monthly savings compare favorably with rentals with much less commodious quarters. In addition, due to the nonprofit sponsorship of the American Legion, each veteran acquiring one of these houses will have an equity of approximately $1,000 in his house the day he moved in because it will be acquired at a cost at least that much under the prevailing market.

Mr. MCKINNON. That is a pretty general statement. Do you have any tangible facts as to how much we can save on construction of cooperatives?

Mr. DINGER. I can immagine that that information would be available through this Nicholson Post of the American Legion in Baton Rouge. The exact figures as to what the savings would be I should immagine would differ with different communities but, of course, I want you to understand that in this particular project a considerable saving in land acquisition was realized through the purchase of some war land from the War Assets Administration.

Mr. MCKINNON. I haven't been able to get any definite information showing where and how, other than through financing costs and extension of amortization, we are going to make any savings on cooperatives. I would like to see where we can save money cooperatively in building. I would also like to find out if that cannot be extended in certain regards to the regular individual type of construction to help the great majority of veterans who will not be able to get any advantage whatsoever under this cooperative title. After all, this cooperative title is going to benefit only a handful of people. You still have the great bulk of people looking for homes at the cost beyond what they can afford to pay. There must be some other ways of extending benefits in construction to the great majority of veterans rather than simply thinking we have done a good job by passing this one little cooperative title that will benefit 35,000 the first year and after that will benefit 215,000. This is only scratching the surface of our needs.

Mr. DINGER. That is correct. I would like to say along with your statement that the American Legion is at the present time making a study of the costs of housing which can be insured under FHA from the standpoint of building codes as another means of eliminating some of your high costs in production of housing.

In answer to your question, I think if you will just take the situation where a housing cooperative is going to benefit by the purchase of land, that is a large tract of land, there is going to be some saving there. By the nature of the cooperative, you will eliminate a speculative producer of homes. It is pretty hard to say just how much that is going to be per house, but there is a very definite area of speculation in housing construction today.

Mr. MCKINNON. Does the American Legion feel that the FHA could be of assistance in reducing the cost of homes by insisting that the speculative buyer limit his profit?

Mr. DINGER. I would like to say that we still have that under study. The idea has been presented to us and we have a resolution at our last national convention to study the question of building codes and how they might be reduced, insofar as FHA standards are concerned, thereby bringing the cost of the production of the house down.

Mr. MCKINNON. Does the Legion have information which leads it to believe that FHA requirements can be reduced without cheapening a home, the quality of a home?

Mr. DINGER. Yes. That has been presented to us as a possibility and we are making a study of that at the present time.

Mr. MCKINNON. How long do you suppose it will be before your study will be complete?

Mr. DINGER. That is pretty hard for me to guess, except that to say that no official action could be taken on the result of such a study until sometime in May when our national executive committee meets.

Mr. MCKINNON. You expect to have it completed by then?

Mr. DINGER. Yes; we hope to.

Mr. MULTER. May I ask a question at this point?

The figures were presented to us by Mr. Foley, proceeding on the theory that private industry will do all the building. The cooperative is going to let out contracts to private industry which will do the actual building and the figures which he submits to us are on the basis whether it is private industry building for its own use adn resale at a profit or the cooperative building, the building and land cost will be the same. In other words, he takes a base figure of $7,000 a unit in one instance, $8,000 a unit in another and a $9,000 unit in a third instance. That is your cost that you start with. The over-all gain that is sought to be obtained here, whether the single family unit or the multifamily dwelling, is that you eliminate immediately the speculative profit that the builder may attempt to obtain by resale. In other words, that profit when one builds today for resale is immediately eliminated, because the owners are not going to sell. They are building for themselves just as you and I would do if building a home for ourselves. There is no element of profit to be obtained there on resale and none from rental.

Mr. MCKINNON. There are a lot of people doing that today, in the open market, who are employing an architect or contractor to build their home direct for them without speculation.

Mr. MULTER. That is right.

Mr. MCKINNON. And yet today we find a lot of those homes very expensive to occupy.

Mr. MULTER. In the main the man who can do that has his own capital and can put in a substantial investment and gets the balance