that, when you take those unit rentals that I have given you, it does not necessarily reflect rent on a 4.5-room unit.

Senator CAIN. At your convenience, Mr. Greene, if you will provide for the record an answer to this question: how large a proportion of the families assisted by FHA or VA during 1949 would actually be eligible.

Mr. GREENE. FHA and VA.

Senator CAIN. I would appreciate it.

Mr. GREENE. Very well.

Mr. FOLEY. Mr. Greene can get it from their record, and I will be glad to get what I can.

(The material referred to follows:)

Distribution of monthly rentals in sec. 608 veterans' emergency housing projects covered by commitments issued January to June 1949 for selected insuring offices

Monthly rental

Insuring office

Less $50 to $60 to $70 to $80 to $90 to $100 to $110 to $125 or than $50 $59.99 $69.99 $79.99 $89.99 $99.99 $109.99 $124.99 more

Total

Percent Percent Percent Percent Percent Percent Percent Percent Percent Percent

Atlanta

5.8

32.8

50.9

8.6

2.7

100

9.9

100

5.3

100

100

100

100

100

100

100

100

100

.3

100

.6

100

3.5

100

100

100

Distribution by size of dwelling unit-Selected FHA insuring officers-Based on sec. 608 VEH commitments issued January to June 1949 1

1 In general, monthly rentals cover shelter rent, cooking and refrigeration equipment, space heat, hot and cold water, janitor service, grounds maintenance, and in some cases gas and electricity. In about one-fourth of the units, either heat or cooking or refrigerating equipment must be provided by tenants, and in 10 percent of the units, largely low-house or semidetached units, only minimum services are covered by rents. 2 Insuring office jurisdictions cover more than just the city named. For example it covers the entire State for the Denver, Topeka, Memphis, Greensboro, and Atlanta offices, about half the State area for the Chicago, Detroit, Seattle, and San Francisco offices, and about one-fifth of the State area for the New York and Houston areas.

3 Totals do not always add to 100 percent because of rounding.

Source: Federal Housing Administration.

FAMILY INCOMES OF PURCHASERS OF HOMES WITH MORTGAGES INSURED UNDER SECTION 203

The attached table presents for the first 6 months of 1949 the net effective family incomes of families who were to occupy new single-family homes on which the mortgages were insured under section 203. On a national basis, the figures show that roughly two-thirds of the families obtaining section-203 insured homes during the first half of 1949 had net incomes of less than $4,800. Looked at geographically, however, it is found that proportionately more of the low-income families obtaining this type of housing were located in southern and western communities. Thus, in the Greensboro and Houston areas, for example, twothirds or more of the families were of moderate or low incomes. In the New York and Chicago areas, in contrast, less than half the families earned less than $4,800. It should be noted that the data shown on the attached table for the selected insuring offices is based upon the new single-family home mortgages insured under section 203 on properties within the entire jurisdiction of the insuring office identified by the name of the city in which it is located. Insuring offices have a much wider jurisdiction than the boundaries of any one city. For example, the Denver insuring office has jurisdiction over the entire State of Colorado; and, similarly, mortgage-insurance activities throughout the State of North Carolina are reflected by the data in the column captioned Greensboro. In addition to the five boroughs of the city of New York, the New York office includes within its jurisdiction nine adjacent counties of New York State. Each of the other insuring offices named have at least 18 contiguous counties of a State within its jurisdiction.

Net effective family income for new home mortgages insured under sec. 203, January to June 1949 for selected insuring offices

A distribution of the monthly rentals proposed for section 608 projects covered by commitments issued January through June of 1949 for the country as a whole as well as for selected FHA insuring offices is shown in the attached table. Since the selection of tenants in these private projects is done by the project sponsors without review by the FHA, no data are available as to the distribution of incomes of the families actually housed.

In

An examination of the rentals at which these 608 projects are to be offered shows, however, that it is only in the South in areas such as Atlanta and Houston that any significant proportion of the units were proposed to rent for less than $60 a month. In northern areas such as New York and Chicago a heavy proportion of the units are being offered at rents in excess of $100 a month. Detroit no units were planned to rent for less than $70 while in Denver everything was to rent for $80 or more. Taking the country as a whole, well over half of the units for which commitments were issued during the first 6 months of 1949 were to rent for $80 or more.

Senator CAIN. Mr. Foley, how many families can be assisted by the 2.15 billion dollars which will be authorized by this bill, approximately?

The reason I ask the question is we have now established there is a total eligibility of about 8,000,000 American families.

I would therefore like to know the number of families that this stated-dollar sum would accommodate. It isn't what we are doing this afternoon, or when we pass this bill, but I think we are laying down a trend for the future.

Mr. FOLEY. It would be simple, of course, to calculate what $2,000,000,000, or any figure you might want to take, would amount to in the way of families.

Senator CAIN. If you will make a calculation and submit it, please. Mr. FOLEY. Taking the $8,000 figure, it is then estimable in simple arithmetic.

Senator CAIN. We would like to know whether we are starting off to accommodate 5 percent of the middle-income group or 15 or 25 percent, or whatever it happens to be.

Mr. FOLEY. I think I suggested this morning, if you took an $8,000 figure as the amount, it would be 250,000 units.

Senator CAIN. Except for very general language, as I read it in the bill, about avoiding extravagant design, are there limitations on the maximum amount of loan that can be made per family unit?

Mr. FOLEY. The limitations, while not stated in dollars in the bill, are pretty clearly set forth in the requirements. One that the cooperative association participating must be made up substantially of families that fall within the middle income group. On the other hand, the project to be approved would have to be one that could offer rents, or the equivalent rents classification, within the means of such families, so that your costs would be definitely limited by such factors.

Senator CAIN. I may have misunderstood. I understood you to say that families living in a cooperative substantially must be those possessed of middle incomes. What are the exceptions?

Mr. FOLEY. The language of the amendment does not say that every member of such an association must fall within them, and in the experience of the organization of cooperatives there seems to be a basis for that; because much will depend, in the success of such an operation, on its having trained leadership within itself, that leadership necessarily being a matter of personality, experience, background, and so forth.

Senator CAIN. I think that is interesting for us to know; and important. You are suggesting that, in more than a general way, most of the families will be those possessed of middle incomes, but for reasons

Mr. FOLEY. Reasons inherent in the effort to get a successful operation

Senator CAIN. There will be exceptions. Then we differ in this measure from our concept of low rent, where when a person's income exceeds a certain figure during his tenancy, he is required to leave. Mr. FOLEY. Yes.

Senator CAIN. But in your cooperative, there will be no such restriction.

Mr. FOLEY. There will be no such restriction, as set up in the bill. Nor do I think that it would be a practical provision.

Senator CAIN. You may be very right, sir. I just don't know. For the record, it is a fact, Mr. Foley, that in projects assisted under housing there are definite limits. We are all in agreement on that? Mr. FOLEY. Yes.

Senator CAIN. And you think that is not a proper thing-to suggest such maximum limit here?

Mr. FOLEY. I think the effect is obtained by the provisions which are cited.

Senator CAIN. I venture the guess that many a question will be raised in the absence of that limitation in years to come.

Mr. FOLEY. Neither do I say that consideration of the possibility should be foreclosed at this time.

Senator CAIN. Yes.

Mr. Foley, I think you have often and consistently and very commendably, from my point of view, emphasized in your public speeches the fact that reduction in construction costs is the core of the so-called housing problem.

Would you tell me what there is in this bill that is going to reduce housing costs?

Mr. FOLEY. You mean the actual construction costs of a building? Senator CAIN. Yes.

Mr. FOLEY. Which, of course, will generally apply whether cooperative or otherwise. You will note in my statement this morning that I referred to the demonstrated possibilities of savings in operations and maintenance, which has been gone into this afternoon, and to the potential savings in construction costs. We have not in this statement attempted to enter a factor of savings in rent based on a claimed saving in construction because of cooperative features. Whether or not in the course of successful experience with cooperative operation that might follow, I am not able to say, but I would suggest that there is such possibility. But it is not calculated here.

As to your question as to what in this would produce lower construction costs, no matter by whom construction work was done, I think there is no magic formula in this bill to do that, except that again there is the same sort of thing that we are trying to provide. For instance, in our section 207 amendments there is a strong incentive on the part of those who are going to organize the cooperative and live in it and have to pay this mortgage, to get the most they can for their money.

Another incentive on the part of contractors and others, who in the early stages at least, will do the building, to be able to provide the kind of a project that will be acceptable under the regulations set forth here, which certainly will require an incentive, furnish an incentive to try to drive their costs down.

That is a generalized answer, but I think it is a realistic one.

Senator CAIN. Thank you. I am curious about this as an American. I wonder whether any building will take place under the FHA section 203 if substantial financing is to be made available to groups organized under this bill. We are talking about the middle-income group. Why should a single individual, desirous of having a home for himself and family, consider the rather liberal provisions of FHA section 203 when right across the street, if he wants to live in a group society, he can get much more substantial benefits?

I am wondering what effect cooperative housing will have on a broad scale on individual home ownership in this country by citizens included in the middle-income group. I don't know the answer.

Mr. FOLEY. I have given a great deal of thought to that, Senator, as you might suppose.

I do not believe, nor does the volume of the program suggested here seem to support the idea that anyone else believes, that a majority of those 8,000,000 families in the group we have just talked about will be actively interested in the cooperative project. It is another factor added to the many devices that we already have to provide means of obtaining housing for the families in need of housing. Now, I think you would have to recognize, and it is recognized in other proposals before the Congress, that there is a wide variety of attitudes and dispositions among the States and among the American people with regard to how they want to live, where they want to live, and what relations they want to have with their neighbors. There are all sort of attitudes and dispositions among the people.