Fellowship Cooperative Association, care of Carroll Welty, Route 2, Elmira. Skyview Acres, Kelsey, N. Y. Amalgamated Dwellings, 504 Grand Street, New York. Cooperative Housing Corporation, Room 1512, 170 Broadway, New York. Group Homes, 201 West Seventy-eighth Street, New York. Joint Queensview Housing Enterprise, Inc., 362 Fifth Avenue, New York 1. Sidney Hillman Homes, 504 Grand Street, New York. United Veterans Mutual Housing Corp., 500 Park Avenue, New York. Usonia Homes-A Cooperative, Inc., 255 West Eighty-eighth Street, New York. North Carolina Stonewall Jackson Housing Association, Charlotte. Veterans Homes Incorporated, Lake Forest, Wilmington. North Dakota Bismarck Veterans Homeowners Cooperative, 816 Avenue B, Bismarck. Ohio Dayton Mutual Homes, Inc., 104 Malcolm Drive, Dayton. Greenmont Mutual Housing Corp., 20 Rembrandt Boulevard, Dayton. Pennsylvania Penn-Craft Community, East Millsboro. Bryn Gweled Homesteads, Gravel Hill Road, Feasterville. Tanguy Homesteads, care of Robert Willson, Route 1, Glen Mills. Fulmore Heights Home Ownership Association, 201 Fifth Road, Hatboro. Aluminum City Terrace Housing Association, New Kensington. American Veterans Housing Cooperative, Inc., 1228 Locust Street, Philadelphia. Juniata Park Housing Corp., Carl Mackley Apartments, Philadelphia. Pennypack Woods Homeownership Association, 8707 Hickory Drive, Philadelphia. Philadelphia project, American Friends Service Committee, 20 South Twelfth Street, Philadelphia. Parkway Cooperative, Route 1, Box 338 Wilkinsburg. AVC Housing Cooperative, Inc., 1228 Locust Street, Philadelphia. Texas Dallas Park Mutual Ownership Corp., 100 Duncanville Avenue, Dallas. Utah Washington Terrace Nonprofit Housing Corp., K-41 Navy Way, Ogden. California Alameda Mutual Homes Corp., Alameda, 1703 Second Street. Planned Community Co-op, 2019 Cedar Street, Berkeley. Community Homes, Inc., 5762 Hollywood Boulevard, Hollywood. Mutual Housing Association, Inc., 626 North Robertson Boulevard, Los Angeles. Peninsula Housing Association, Inc., Box 248, Palo Alto. Santa Monica Housing Co-op, 236 Twenty-third Street, Santa Monica. Connecticut Success Park Co-op Housing Association, 6051-X Success Avenue, Bridgeport. Cooperative Homes of West Haven, Inc., 19 Congress Avenue, New Haven. Colorado Mile High Housing Association, 2014 South Vine Street, Denver. District of Columbia Bannockburn Cooperators, Inc., 1129 Vermont Avenue NW., Washington. Veterans Housing Cooperative, Thirtieth and Naylor Road SE, Washington. Georgia Macedonia Cooperative Community, Clarksville. Illinois Cooperative Residences, Inc., 343 South Dearborn Street, Chicago. Douglas Park Cooperative Apartments, 1641 South California Avenue, Chicago. 61731-50-11 Frederick Douglass Cooperative Apartments, 6209 Indiana Avenue, Chicago. Lex-Lawn Cooperative Apartments, 3648 Lexington Street, Chicago. Lexington Spaulding Cooperative Apartment, 3258 Lexington Street, Chicago. York Center Community Cooperative, Inc., 3435 West Van Buren Street, Chicago. Gibraltar Consumers Cooperative, Inc., 1832 Lemar Avenue, Evanston. Indiana Flanner House Homes, Inc., 333 West Sixteenth Street, Indianapolis. Walnut Grove Mutual Housing Corp., 2717 Woodmere Lane, South Bend. Kansas Veterans Quindero Homes, Inc., Kansas City, Kans. Hilltop Manor Residents' Association, 4614 Boston Drive, Wichita. Caman Apartments, Topeka. Maryland Greenbelt Veterans Housing Corp., 56B Crescent Road, Greenbelt. Massachusetts Snake Hill Community, Belmont. Michigan Kramer Homes Cooperative, Inc., 8401 Well Avenue, Centerline. Schoolcraft Gardens Cooperative, Inc., 220 Bagley Avenue, Detroit. Oakwood Community, 320 Elm Street, Kalamazoo. Parkwyn Village Association, Kalamazoo. Virginia Paul Lawrence Dunbar Homes, Arlington. George Washington Carver Homes, Arlington. West Virginia Hill Top Park, Inc., Post Office Box 707, Charleston. Kenna Homes Mutual Ownership Corp., South Charleston. Wisconsin Greendale Veterans Cooperative Homes Association, Box 308, Greendale. Wisconsin Cooperative Housing Association, Crestwood, Route 2, Madison. Milwaukee Cooperative Homes, Inc., 5070 North Thirty-fifth Street, Milwaukee. Washington Seattle Cooperative Housing Association, 106 Lynn Street, Seattle. Hawaii Veterans Village, 934 Maunakea Street, Honolulu. Puerto Rico Cooperative de Hogares, Box 11, Arecibo. Associacion Cooperativa el Falansterio, Puerto de Tierra. Sociedad pro Comunidad Cooperativa, Apartado 112, Universidad de Puerto Rico, Rio Piedras. Mr. VOORHIS. Mr. Chairman, I have a little paper here entitled, "How Cooperative Construction Can Effect Real Savings," that deals not completely but in some degree with the questions that were raised and I would like permission, if I could, to file it with my statement. The CHAIRMAN. Without objection, that may be done. Don't file any statements that will be too long. Mr. VOORHIS. Mr. Chairman, I don't mind at all. The CHAIRMAN. Submit that. It can be incorporated. Mr. VOORHIS. I only asked for it because the question was raised. (The matter referred to is as follows:) A. HOW COOPERATIVE (CONSTRUCTION CAN EFFECT REAL SAVINGS 1. When cooperative groups have done their own construction laboring, they have saved from 30 to 35 percent of the cash value of their homes. At Penn-Craft Community in Fayette County, Pa., in 1939, 50 homes were cooperatively built with the average expenditure of some 2,750 labor hours and $2,000 in cash. These are well-built stone houses and at the time of completion were estimated to be worth from $3,000 to $4,000. In Nova Scotia during the past 10 years some 38 cooperative housing groups have built their own homes by their own labor and credit from the Nova Scotia Housing Commission. Almost all the initial equity is "sweat equity," and amortization and interest payments for 25 years average only $12.15 for those homes completed before the war, and $20 per month on those homes completed after the war. At Lorain, Ohio, members of the Lorain Veterans Housing Association are building their own $8,500 homes for $6,500 by doing the labor themselves under a superintendent they have hired to organize and direct their work. At Kearny, N. J., members of the Legion-Veterans Cooperative Housing, Inc., with $400 down payments have banded together and are building one house at a time, mortgaging it and then going on to build another. Each house costs about $6,500 for land and materials but is worth almost half as much again when completed. 2. When a cooperative building organization gets as large as a speculative builder, it can beat the speculative builder's price, since the speculative builder adds a profit to his costs, while the co-op charges only their cost. The Amalgamated Housing Corp. building in the Bronx and on lower Manhattan, by having practically a staff architect and doing their own general contracting, have amply demonstrated a most efficient and economical organization for cooperative building. In Chicago the Community Development Trust is building co-op apartments for $1,500 a room. Mr. Henry T. Holsman, the founder, maintains the savings are made possible by the co-op features, "whereby we could work with substantial continuity directly for mutual-owner clients, the users of the projects, and free our professional work from the whims and dictates of ignorant or tradition bound speculators interested not in general improvements but only in immediate returns." 3. When a construction cooperative is organized by the building mechanics, even the usual subcontractors' profits are eliminated, finally making possible construction at cost. Cooperative Builders, Inc., a craftsman-owned cooperative in Seattle, Wash., is building detached homes, selling them individually at market prices, and building up a sizable amount of capital. They are planning to build for cooperative groups, and if details can be worked out would then build and sell at cost. (Svenska Riksbyggen is a coperative building enterprise in Stockholm, Sweden, that is owned and controlled by the workers themselves. It was organized in 1939 and by 1949 had completed over 10,000 apartments in and around Stockholm. So far all its construction has been for cooperative ownership groups or the Stockholm Town Council.) 4. And seemingly the greatest savings are made possible when the large cooperative building organizations join together to produce the components of buildings in their own factories, thus eliminating the profits from the manufacture of the building materials too. This lies somewhere in the future as far as the United States is concerned, but it is a reality in Sweden, where the HSB, or Tenants' Savings and Building Society, not only garners the savings of prospective cooperative apartment members and uses it for construction money, but also owns a number of carpentry and joinery works, two factories for the production of prefabricated houses, a marble quarry, and together with other cooperative organizations, several brickyards and a pipe factory. B. MORE EASILY MEASURABLE SAVINGS ARE MADE THROUGH COOPERATIVE OWNERSHIP AND OPERATION OF HOUSING PROJECTS 1. Comparing cooperative with individual ownership detached homes: (a) A lower rate of interest on the mortgage is possible. It is obviously easier and cheaper for a lender to originate and service one large mortgage rather than 100 small ones. Unfortunately we know of no examples in the United States where a private lender has made a mortgage loan to a cooperative group for the co-op ownership of a number of detached residences. (b) Cooperative ownership facilitates quantity purchasing of fuel, insurance, maintenance supplies, and services, thus reducing the costs of these items. Two cooperative projects near Dallas, Tex., have identical management, and both have 300 units each and were built at approximately the same time. One of them, Dallas Park, has not been able to buy its utilities cooperatively, while the other, Avion Village, has. The savings on utilities at Avion Village amount to 20 percent. (c) In a co-op the corporation handles transferring of memberships at cost, thus eliminating most of what realtors would charge as commission every time a unit is sold, and eliminating the speculation in housing. Cost of transfer of ownership in the co-ops is very little too, since all the projects have long waiting lists. At Greenmont Village in Dayton, Ohio, the waiting list is so long they will not accept applications. The turn-over is very small, too—over 70 percent of the families that first moved into the Amalgamated project in New York 20 years ago are still in the project. When Norris, Tenn., was sold by the Government, a cooperative of the residents unsuccessfully bid for the project, but it was sold to private interests. One year later the homes were placed on the market at 30 to 35 percent higher than the co-op would have valued them if they had paid what the private interests paid for the project. 2. Comparing cooperative ownership of multi-family dwellings with private owned rental housing. (a) The owner's profit is eliminated in the co-op, which operates at cost. (b) Repair and maintenance is less in a co-op since minor repairs are done by the member owners themselves rather than having it done by professionals, and a good deal of self-maintenance is practiced in cooperatives. (c) Decorating in a co-op is generally less, since the pride of ownership encourages people to keep their homes cleaner and to take better care of their property. Also much of the decorating is done by the members themselves in their spare time, thus saving the cash outlay for outside painters, cleaners, etc. (d) On smaller co-op projects management costs are practically nil since it is generally handled by a management committee on a voluntary basis rather than on the usual management firm's 5-percent basis, typical of rental projects. C. DIFFICULTIES EXPERIENCED BY COOPERATIVE HOUSING ORGANIZATIONS 1. Convention mortgage financing requires such a large equity investment (35 to 40 percent) that only upper income families can buy cooperative housing that is privately financed. There are probably only three general exceptions to the above: (a) Where people lived in small community or rural areas and were able to perform their own labor; (b) where they are being helped by a labor union and liberal and philanthropic organizations, and enjoy partial tax exemption, as in New York City; and (c) where the Government is selling defense and war housing to cooperative groups for from 10 percent down to no down payment. 2. Where upper-income families have been able to raise sufficient equity, they have still been unable to obtain private mortgage financing for a cooperative ownership project if it is to consist of detached residences. Without exception that we know of, mortgagees have insisted on each family financing his home with a separate mortgage, even if they will grant a single large mortgage during construction. Cooperative Community, Inc., at Glenview, Ill.; Bannockburn Cooperators, Washington, D. C.; York Center Community, Lombard, Ill., for example, all tried to build cooperative ownership projects and were forced to abandon their plans and are ending up with private ownership of the homes with certain controls over selling of any home in the project. 3. Under section 207 of the 1948 amendments to the National Housing Act, FHA, by insuring mortgages of housing co-ops, was supposed to make co-op ownership projects possible, and at lower down payments, lower rates of interest on the mortgage, and longer amortization periods. However, no such results have been forthcoming. Due partly to the high cost of construction, but also to FHA's appraisal practices, 35 to 40 percent or more down payments are still required. Peninsula Housing Association's first house in the Palo Alto, Calif., project received an FHA commitment amounting to 56 percent of the total cost. FHA is insuring about the same percentage on the homes in Bannockburn, near Washington, D. C., where the down payments are ranging from $4,800 to $9,500. However, the mortgage insurance on these is under section 203, since they were started before the section 207 provision was law. Further, the delay and buck-passing that various co-op groups have received when dealing with FHA has been almost enough to kill the projects. Schoolcraft Gardens has been almost 3 years in getting final approval of mortgage insurance on their project in Detroit, Mich. The AMVET Homestead Association in Columbus, Ohio, has been working for 2 years with FHA and still hasn't received final clearance. And members of Mutual Housing Association in Los Angeles charge FHA delay with adding at least $500 to the cost of their homes, besides keeping them from gaining occupancy at least a year sooner than they will get to live in their homes. 4. Generally speaking, cooperative housing associations have not experienced serious difficulties once their homes have been built. In other words, it has not been the experience of those groups of people now living in cooperative housing projects that any great problems have arisen in the operation of the project. Most of them are going along about as smoothly as any human institution could be expected to do. Of course, there is friction and disagreement from time to time. Some groups seem to feel that there is too little democratic control, possible under their form of organization. As to others the question has been raised as to whether there might not have been too much democracy, especially during the period of construction. The CHAIRMAN. Give us some information as to the organization for which you speak? Mr. VOORHIS. I am secretary, Mr. Chairman, of the Cooperative League of the United States. The Cooperative League is an educational and informational organization, whose members, in turn, are some of the regional coperative organizations. Two mutual insurance companies are the other members of the league, being organizations like Consumer's Cooperative Association of Kansas City, Farm Bureau Cooperative Association of Ohio. That is, they are wholesale cooperatives which belong, in turn, to the local cooperatives in the areas that they serve. Those local cooperatives, of course, belong to the people who are their members. The Cooperative League attempts to carry on an educational job with respect to cooperatives, what they are for, what their real objectives are, the fact that they do pay taxes and want to and other points of that sort. Then we have, also, an organization called the National Cooperative Mutual Housing Association, which is a loose federation of some of the existing cooperative and mutual housing associations. It is not a financial organization and I serve it merely in my capacity as secretary to the league. In other words, I don't get paid for that. I do get paid for being secretary of the league. Mr. MULTER. Will Mr. Voorhis come back? The CHAIRMAN. I do not know. Mr. MULTER. I have just one matter to discuss, if I may. Mr. Voorhis, you pointed out on page 2 of your statement that there were two items bringing down the cost of housing? Mr. VOORHIS. Yes. Mr. MULTER. First, savings which cooperation by joint action make possible and secondly, reduction in finance charges. Mr. VOORHIS. Yes. Mr. MULTER. I think a third item in bringing down costs is that the cooperative project eliminates the profit made by the owner when he resells a home to the private person who will occupy it, or if it is |