All houses were carefully located so as to utilize the several variations in appearance to the maximum extent. The houses are especially noteworthy for their light, airy appearance and quality of interior finishes. The following outline specifications will describe in general the type of construction utilized. General. CONSTRUCTION OUTLINE These houses in Legion Village consist of manufactured panels and packaged loose members. Foundations.-Concrete piers provided with metal termite shields. Forms are reusable. Structure.-Wood framing for floors, walls, and roofs, with use of southern yellow pine, interior finish of plywood, glued and stapled to panels in plant or of gypsum wallboard furnished and finished at the site. Finish floors applied either in plant or at site. Roofing.-Plywood sheathing or 1-inch center match boards. Two hundred ten pounds asphalt shingles applied over felt. With metal flashing. Millwork.-Windows of double-hung wood sash, using mechanical sash balance. Doors of colonial design using western fir or ponderosa pine. Molded interior trim and exterior trim southern yellow pine. Linen cabinet in bathroom. Screens of aluminum or bronze. Floors.-Oak, pine, and rubber tile. Kitchen and bath have linoleum covering, and are complete with all necessary fixtures, cabinets, etc. Equipment.-Plumbing and electrical equipment of standard, approved makes. Heating by floor furnace installed in central halls, or by individual space heaters. The specifications are ample and provide many conveniences and extras found only in homes being built in a higher cost bracket. It required about 8 months to complete the project so that early spring (1948) found all the work completed, individual sales closed, and 250 veterans and their families living in homes which are pronouncedly better than their money could buy if expended individually. FINANCING THE HOME PURCHASE The houses in this project range in price from the most economical type, a twobedroom plan priced at $6,300, to the most expensive type, a three-bedroom plan, having in addition living room, dining room, kitchen, and bath, priced at $7,700. These prices are total. They include all cost of raw land, site improvements, landscaping, the house itself, interest, taxes, FHA fees, in fact every item right up to the keys. Due to the fact that these houses are financed under a FHA guaranteed loan and because responsible local citizens have undertaken to iron out all financial wrinkles, veterans purchasing these houses will be enabled to move into them without any down payment. They will be able to live in the houses by making monthly payments of $40 to $49 per month, beginning the second month. This, of course, depends on the house which they select and are able to finance. The only cash the veteran will need will be that required to pay closing costs. These houses provide an effective substitute for rental housing, since the monthly payments compare favorably with rentals for 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 moves in because it will be acquired at a cost at least that much under the prevailing market. To prevent possible inflation, each veteran purchasing a house is required to sign three promissory, negotiable notes payable to the American Legion Housing Corp., payable, respectively, 1, 2, and 3 years from date at 4-percent interest, for the full FHA value of his house. Their payment is conditioned upon his living on the premises. Thus, if he lives in the house 1 year, the first note is returned; if he lives in it 2 years, the second note is returned. If he lives in it 3 years, the third note is returned, However, if he sells or rents the house, he is required to pay the full amount of any note remaining in the hands of the American Legion Housing Corp. at the time. FINALLY Whatever success this project (or any similar project) achieves will be due entirely to the magnificent cooperation of every person and organization in contact with it. Business and professional men, builders, bankers, FHA person nel, real-estate men, labor, manufacturers, and individuals, both in and out of the Legion, have enthusiastically cooperated and the Legionnaires directly responsible for the execution have worked long hours and held many, many meetings to bring about the present favorable conditions. ans. Nicholson Post No. 38 of the American Legion feels that this is a graphic example of what local cooperation can do to meet the housing problem for veterHere is a case study of what every local community, which feels it has a responsibility to provide adequate housing for its veterans, can do through cooperative action. Through united effort and public spiritedness, the business firms of the community (banks, material dealers, real-estate men, labor contractors) can provide housing at a cost well within the means of the average veteran. With this feeling as the guiding spirit, any veterans' project is virtually assured of success from start to finish. Nicholson Post No. 38 has secured the agreement of the Crawford Corp., makers of a complete line of houses, to assist any other post of the American Legion or any other veterans' group in organizing similar housing projects. Interested parties should write direct to the Crawford Corp., P. O. Box 989, Baton Rouge, La. (The following communications were received from the American Legion in answer to questions put by members of the committee to Mr. Robert S. Dinger :) Hon. BRENT SPENCE, THE AMERICAN LEGION, NATIONAL LEGISLATIVE COMMISSION, Chairman, House Banking and Currency Committee, House of Representatives, Washington, D. C. DEAR CONGRESSMAN SPENCE: On February 1, 1950, when our Mr. Robert S. Dinger testified before your committee on the cooperative housing bill, H. R. 6618, several requests were made that we endeavor to get further information to be incorporated in the record at a later date. Congresswoman Chase Going Woodhouse of Connecticut asked if we could supply the committee with information as to the average size of housing developments which have been sponsored by American Legion posts. The purpose of this question was to develop for the committee the manner in which savings can be realized in initial development costs by the elimination of a speculator. We do not have any figures on file in this office upon which an accurate average number of housing units per development sponsored by American Legion posts can be based, but have offered our cooperation with the Research Division of the Housing and Home Finance Agency for developing such statistics. In hearings before the House Committee on Veterans' Affairs in 1948 the theory was developed that large projects containing 100 units or more would realize a greater percentage of savings per unit by the use of mass production methods such as on-site fabrication and the purchase of large quantities of material. Congressman Albert M. Cole of Kansas requested an itemized break-down of the $1,000 savings per housing unit which was realized in the 250-unit veterans' housing project at Baton Rouge, La., which was sponsored by Nicholson Post No. 38 of the American Legion, and referred to in our testimony. Contact has been made with Mr. R. C. Cadwallader, who is president of the American Legion Housing Corp., and we are enclosing herewith a copy of a letter recently received from him. The inference might be drawn from Mr. Cole's question that the purchase of land from the War Assets Administration made possible the $1,000 per unit savings. The inference might also be drawn that this property was sold at a special price to the American Legion Housing Corp. I would like to make it clear for the record that this property was offered for sale on a competitive bid basis and the contract awarded to the American Legion Housing Corp. on that basis. Figures disclosed in the attached letter of Mr. Cadwallader show that it was necessary for the corporation to purchase, along with the land, various buildings and barracks which had to be sold before the land could be developed as a housing project. We hope that the information contained herein will be of assistance to the committee in their consideration of H. R. 6618 and that the committee will not hesitate to call upon the American Legion for any further information. It is respectfully requested that this letter and the attached letter from Mr. Cadwallader be incorporated in the record of hearings on this bill as a supplement to our testimony of February 1, 1950. At this time please permit me to again thank you and the members of your committee for the courtesy and consideration which you extended to Mr. Dinger and the writer at the time we appeared before you in connection with the above The American Legion, Washington, D. C. DEAR MILES: This will acknowledge your letter of February 1, 1950. I am not quite sure as to exactly what you mean when you say you want an itemized "break-down covering these cost figures." As you will perhaps recall from your reading of the pamphlet in question, the American Legion Housing Corp., a wholly owned subsidiary of Nicholson Post, No. 38, built 250 houses and sold off certain other properties on which housing was constructed by other owners. According to the audit statement by Carter & Carter, the certified public accountants who audited the affairs of the American Legion Housing Corp., the cost of the 106.34 acres and improvements was $75,028.61. The water, well, commercial, frontage, barracks, and other lease property was sold and resulted in the receipt of $58,073.10. Thus the land represented a net cost of $16,955.51. The balance of the land was divided into a number of tracts and appraised value was established on each of the acres. The residential area of 65.02 acres was divided into 283 building lots, with a raw land value of $700 per acre representing a value of $45,514. The estimated value of the land to be developed was 80.28 percent of the total estimated value of the land not sold. Therefore, 80.28 percent of the net cost of $16,955.51 was allocated to the land developed and 19.72 percent, or $3,343.63, was allocated to the land retained and not developed for housing. The total FHA valuation of the 250 houses was $1,857,780. The American Legion Housing Corp. sold these 250 houses for $1,670,800. The difference of $186,980 represented a gift by the American Legion Housing Corp. to the 250 veterans based upon 10 percent of the cost of each of the houses in question. The FHA valuations were felt to be an appraisal, and subsequent sales in Legion Village showed them to be conservative, so that, in effect, a man who paid $6,300 for a house in Legion Village actually was the owner of the property for a going value in the Baton Rouge real-estate market of $7,300 or better. Of course, considerable fluctuation exists between the various houses, due to different lot sizes and type of house on the lot. The American Legion Housing Corp. used a flat value of all lots, irrespective of the size of the lot or whether it was corner lot. These figures are fairly well borne out by the fact that the American Legion Housing Corp., paid a contractor $1,729,300 and with other costs, as of the date of the audit on April 30, 1949, spent $1,753,315.84 for improvements. The difference was made up by the sale of 33 lots and other properties, by the gift of all legal services to the corporation, by a reduction in the closing costs, including the title insurance and notarial fees, by reduction in the architectural costs, by the free use of office space belonging to the American Legion, by a reduction in an insurance-premium cost, by reduction in the costs of survey made in surveys. The cooperation of the local government in creating fire, garbage, and streetlighting districts and in assisting in the solution of drainage problems, and of the Post Office Department in providing for door-to-door carrier service, and of the bus company in routing a bus line through the area, contributed materially to the tremendous increase in values as contracted with costs. Likewise the fact that Legion Village was built on a piece of land situated on two sites of an existing elementary and junior-high-school site, contributed to its real-estate value when finished. In other words, the value of any piece of property or home is dependent not only on what it costs, but upon the satisfaction and conveniences that it represents in relationship to its surrounding locality. Legion Village, when finished, represented an area of several hundred homes that had all of the complete city services that are not enjoyed by 70,000 other inhabitants of the Baton Rouge metropolitan area, out of a total population of 125,000. Legion Village was, when completed, comparable to the finest residential area in Baton Rouge metropolitan development, and it was the only residential subdivision in the entire Baton Rouge metropolitan area where a house and lot could be purchased for $6,300, all of which made it extremely attractive to persons looking for homes. I don't know whether this gives you all of the information that you want, or which the members of the House Committee on Banking and Currency would like to have. I would suggest that you get a copy of the Insured Mortgage Portfolio Folder 13, No. 2, Fourth Quarter, 1948, published by the Federal Housing Administration at Washington, D. C., and turn to page 14, where an article begins on Legion Village that I wrote, and I think that it might help to fill in considerable information. The American Legion Housing Corp., while still in existence, is almost dormant. Mr. Carter, the certified public accountant who made the audit, could probably prepare any cost analysis or break-downs that you might desire. However, he would expect to be paid for them, and since the American Legion Housing Corp. doesn't have any funds for this purpose, if you want such a study prepared, I would suggest that you write to Mr. Arthur L. Carter direct, at Post Office Box 1747, Baton Rouge 2, La., and ask him to quote you a price on whatever material you may need. Hoping that this will satisfy your need, and assuring you that I will be happy to assist you in any way possible to obtain further information, I am Cordially yours, (S) Dick Cadwallader RICHARD C. CADWALLADER. Mr. PATMAN. I understand the next witness is Mr. Drayton S. Bryant. STATEMENT OF DRAYTON S. BRYANT, HOUSING CONSULTANT Mr. BRYANT. My name is Drayton S. Bryant. I am a housing consultant. Mr. COLE. Housing consultant for whom? Mr. BRYANT. Agencies such as housing authorities and private developers. I am a housing economist. Mr. COLE. Where have you been located? Mr. BRYANT. I have been in Los Angeles for the past few years. Mr. COLE. Is that your residence now? Mr. BRYANT. Yes. I am testifying here today because of my work during the last year in studying redevelopment and during the last decade in housing economics, management, and administration. I.have also been the treasurer of a housing cooperative during the last 4 years. The first point which should be made is that this middle-income housing legislation is an essential tool in the redevelopment process in most of the cities which are presently interested in redevelopment. I have collaborated in a book which will be published shortly by a foundation in Los Angeles, entitled "Rebuilding the City." There is an advance draft of it. It should be out in a month or so. I had occasion to meet with and talk with many people living in potential and proper areas for redevelopment. There is a large group, often about half of the people in these slum or blighted areas, whose incomes are just above the maximum for admission to public housing and yet is too low to obtain for them any decent shelter for rent or sale from private enterprise as it now is or is likely to cost. I have sat down with groups of such people who have asked "what are the real facts about redevelopment? Is it in the general interest or is it just to bail out the owners of some land in deteriorating areas? Will we lose our homes? How can we get a decent home elsewhere? If we can't, we'll have to fight against redevelopment." The feeling I got from such direct discussions is that many of these families will work with all their might against redevelopment programs, even though they may clearly be in the public interest. You and I would probably do the same thing. Taking the home of an average wage earner away from him—a man who earns from $40 to $60 per weekis like pulling a raft away from a man who can't swim, in today's housing market. In fact, if a redevelopment program does not make sense to the people in an area they will be against it. It is my opinion that it will then be impossible to put through the program in a whole city, that is, the electorate will not vote for it. I think that experience has been the case in several cities where bond issues for redevelopment have been defeated. Some of the families in redevelopment areas asked "How could we get together and redevelop part of this area for our own homes? Where could we get financing so we could rebuild simple homes or apartments which we could pay for?" And the only answer that can be honestly given is that 3-percent financing through a mechanism such as is contained in this middle-income housing program is essential. Most of these families must have monthly payments between $40 and $70 per month for five- or six-room homes. The results of the approximate 3-percent interest rate, absence of large profits, low vacancy and collection loss, and savings from cooperative maintenance, are all required to remove from $30 to $40 from the rents or payments which speculative private enterprise would charge. As part of this study that I referred to, the president of the planning commission in Los Angeles, Robert E. Alexander, an architect, and I planned an actual occupant-owned, nonprofit project to carry through this thing and see exactly what it would cost and how it would work. In this redevelopment program we came to the conclusion that there was a large place for normal, private enterprise, there was a need for some low-rent public housing, but in between these two there was a big gap and that there had to be something in this rent range in between because these families were just above the income limits for public housing and yet actually could not find housing in the market as it then existed. We came to the conclusion, after designing this project and getting actual costs on it, that under an occupant-owned or cooperative basis the rooms could be rented for about $12 per room per month or about $60 per five-room apartment, but under FHA 5-percent financing, the minimum cost would be $90, not counting profit, which meant, of course, that it would probably be well over $100 or $110. Mr. KILBURN. You mean the same rate of amortization? Mr. BRYANT. No; that is using the four and a half plus a half percent interest with a 25-year amortization— Mr. KILBURN. Not 50? Mr. BRYANT. Fifty years was needed at 3 percent to get the room cost from $17 down to $12, but probably half the people in this particular area could afford only $12 per month per room. I have managed large housing projects and have worked closely with all kinds of tenants. I am positive that monthly costs can be reduced at least a third below those of public housing and much more |