STATEMENT OF W. P. ATKINSON, PRESIDENT, NATIONAL
ASSOCIATION OF HOME BUILDERS

Mr. ATKINSON. I realize this is the last day and that we are running extremely short of time. Therefore, in the interests of conserving time, I would like your permission to file for the record my complete statement.

The CHAIRMAN. Without objection it will be made a part of the record.

(The statement referred to follows:)

STATEMENT OF W. P. "BILL" ATKINSON, PRESIDENT, NATIONAL ASSOCIATION OF HOME BUILDERS

My name is W. P. "Bill" Atkinson and I am a home builder in Midwest City, Okla. I appear before you today in my capacity as president of the National Association of Home Builders, the trade association of the builders of America's homes. Our association has more than 19,000 members as of this date, most of whom are members of our affiliated local associations in 165 major metropolitan areas throughout the country. It is our estimate that they build approximately 75 percent of the new housing constructed in these areas.

I am personally familiar with the problem of providing housing in a defense economy. In just such a period as this 10 years ago, my company created Midwest City as a complete town to meet the needs of service personnel and civilian workers at Tinker Air Field outside of Oklahoma City. It has now grown into a complete town of over 11,000 people, and is being expanded at the rate of 600 homes per year to meet the needs of the current war effort.

The national board of directors of this association consists of 247 men representing our membership throughout the country. They met in Chicago at our annual convention in January and discussed for several days the provisions of this bill. At the end of that time they approved an eight-point policy statement which is attached hereto as a supplement.

I would like to say at this point that we have confidence that whatever legislation is passed will be ably administered by Housing Administrator Foley. Although we are not in agreement with some of the provisions of S. 349, we heartily approve of the general spirit of that part of the policy statement of the legislation which expressed the intent that—

"Private enterprise shall be encouraged to provide as large a part of the total defense housing needed as it can, with special governmental assistance being made available where feasible and necessary to enable private enterprise to provide more of the total defense housing needed" and "defense housing shall be constructed by the Government only where it cannot otherwise be provided when and where needed."

We understand that Mr. Foley, in his testimony before you, has expressed agreement on the necessity for relaxing credit controls in defense areas. We believe that this is the most important single step that can be taken to provide housing for the defense emergency. It should be done immediately and we suggest that the bill itself contain such a requirement. At the present time, in many areas which will within a few months undoubtedly be designated by the Government as defense areas, mortgage credit controls are drastically curtailing builders' plans for the production of the very type of housing that will be badly needed in those areas later this year. While credit controls may have served a useful purpose in October when first imposed, the situation has changed rapidly since then. They should be immediately reexamined and relaxed.

We urge two amendments to title I of this bill in order to permit the system of mortgage insurance established in such title to operate in all defense areas with equal effectiveness:

1. The maximum mortgage limits in section 903 (b) (2) and in section 908 (b) (2) (C) are too low to permit the construction of satisfactory housing in the higher-cost areas. We suggest that the mortgage limits be set at not less than $9,000 per unit. The FHA local offices have full authority to refuse to go to those limits in those areas where costs do not require. For the 16 years of their highly solvent operation they have, by such local adjustments, been providing flexibility in the maximum ceilings in various portions of the act. The

maximum mortgage amounts contained in the bill before you, while perhaps sufficient in most areas of the country, are inadequate in a large number of our larger cities. (This recommendation differs in one important aspect from our testimony before the House Banking and Currency Committee, a copy of which is attached, in that we there recommended an additional $900 per unit over the $8,100 maximum in the bill where the FHA finds costs in the area so require. Since that time we have concluded that a simple $9,000 maximum would be administratively much more feasible.)

2. Section 903 (b) (2) should be appropriately amended to provide mortgage insurance on three- and four-family units. The bill provides for mortgage insurance on multifamily units and on one- to two-family units. The multifamily unit provision is too cumbersome to be of practical help for less than a sizable project. Three- and four-family units in many areas, particularly in smaller towns, are a well-established means of supplying rental housing.

We agree that rental housing should be encouraged, but we do not feel that it should be assumed that persons coming into defense areas require rental housing exclusively. On the contrary, it is our conviction that defense housing needs will be most quickly and effectively met by maintaining a normal flexibility of choice between rentals and home ownership. While recognizing the importance of rental housing, we caution against concentration on that segment of the need. The experience of World War II proved that thousands of workers who moved into cities and towns to take war jobs remained in those communities after the war was over. Too rigid insistence upon rental housing will not only delay and make difficult the rapid solution of the housing problems of those workers coming into defense areas in the present emergency, but will deny to these citizens the homes which many of them want at prices which may very well be appreciably less than the prive levels at which they will buy the same houses after the current emergency ends.

POLICY STATEMENT ON DEFENSE HOUSING ACT BY NATIONAL ASSOCIATION OF HOME BUILDERS

The following policy statement concerning the Defense Housing Act of 1951 (S. 349), recently introduced in Congress, was unanimously adopted today by the board of directors of the National Association of Home Builders in convention in Chicago:

1. As a basic national policy it should be clearly recognized that private industry, if not hindered by unnecessary and unrealistic restrictions, can provide housing wherever and when needed for defense. The following program proposes such additional governmental aids as may be necessary to enable private enterprise to carry out this policy.

2. The credit curbs of October 12 should be relaxed in areas designated as defense areas so that as many homes as possible may be produced under existing legislation.

3. In any defense area in which the relaxation of credit controls does not prove sufficient to provide the necessary amounts of housing for defense workers, the National Housing Act should be amended to provide a title which would authorize FHA to insure, in designated defense areas, 90-percent loans on multifamily units and on one- to four-family units for rental or for owner occupancy, based upon acceptable risk in view of the emergency. Maximum mortgage limits in such title should provide a suitable extra amount in higher cost areas at the discretion of FHA.

4. In areas where the need will not extend beyond the defense emergency, FHA should be provided with a separate defense insurance fund to insure and Federal National Mortgage Association authorized to commit to buy-loans on rental projects of mobile or demountable type housing on such terms as the Commissioner shall prescribe and at an amortization rate not necessarily limited to the estimated period of the need. As an additional aid in such areas, FHA title I, section 8, should be amended to permit rental of the type of small structure now contemplated under it.

5. The FHA insurance authorization should be increased sufficiently to cover the new titles and FHA operations under existing titles.

6. The Wherry Act should be extended for at least 2 years and amended also to include projects of the Atomic Energy Commission.

7. A limited sum should be authorized with which the Federal Government may provide, or assist local governments to provide, utilities or community facilities in defense areas where local governments are unable to do so without such aid.

8. The emergency should not be used as an excuse to further public housing. The subsidized public housing program must be suspended at least for the duration of the emergency so that Federal funds and critical materials can be conserved for defense purposes.

We will support any legislation to accomplish these purposes and vigorously oppose presently proposed or any future legislation which is inconsistent with them. In its present form S. 349 does not satisfactorily conform to these principles.

It is the further sense of this board that it shall be the duty of the executive committee and the president's advisory council of this association to accomplish the foregoing to the best of its ability and in its best discretion.

Mr. ATKINSON. I think I should tell you that only about 3 weeks ago I was given this title with the national association. It goes without saying that I am extremely proud of this title. I think you can understand that because of the great strides this industry has made in the last 10 years. As a matter of fact I am quite sure you too share that pride in our record.

The CHAIRMAN. We are proud of what the private builders have done.

Mr. ATKINSON. I am sure you would be because we want to be the first to give you gentlemen credit for your wisdom in the kind of legislation you have passed to help us make this record.

Of course, you know as a matter of record we built a million homes during the last war. You know, too, we built over 5,000,000 homes since the war, and of course you have heard many times since you have been holding hearings here, of the record we set in 1950 of almost 1,400,000 units.

At the same time, when I say we are proud of the record and that we thank you for your wisdom in giving us the legislation that makes that possible, again we want to be on record that that did not cost our Government or the taxpayers one single penny. Of course, you gentlemen fully recognize that.

The CHAIRMAN. Of course, as a matter of fact, our dealings with the FHA have made money. However, it has been an up-going market and prices have continued to go up. So that even though the Government has made a profit, it is a risk that people take in that insurance, when the FNMA and other mortgages are made. It is a certain risk that the taxpayers did take during the period you referred to. It just so happened it turned out well and I think we have had a good law on FHA and I think private industry benefited.

Mr. ATKINSON. Senator, that raises a very important question that was asked me today. With our present Government debt, there is not much chance to think that we would have a decline, is there? The CHAIRMAN. I worked here in September and October to try to keep prices from going up.

Mr. ATKINSON. My guess is that our problem for a great number of years to come is going to be to hold the prices down rather than be too much worried about them taking a nose dive.

Therefore, we are recommending to our home builders that they are on safe ground to go out and build rental projects for the lowincome groups, as I want to emphasize here today.

The CHAIRMAN. That is what we want, accommodations for the low-income groups.

Mr. ATKINSON. I like to say what you want to hear.

The CHAIRMAN. We want to hear things we do not like sometimes. There are always two sides.

Mr. ATKINSON. There may be things we will say here today that you will not like, also.

The CHAIRMAN. Well, there are no hard feelings about it. That is what runs a democracy.

Mr. ATKINSON. That is right.

We do want to say that we have every confidence that whatever legislation you pass, it will be ably administered by the Housing Administrator, Mr. Raymond Foley. We want to say we heartily are in accord with the policy statement of the bill which reads:

Private enterprise shall be encouraged to provide the largest part of the total defense housing needed as it can, with special governmental assistance being made available where feasible and necessary to enable private enterprise to provide more of the total defense housing need, and defense housing shall be constructed by the Government only where it cannot otherwise be provided when and where needed.

Perhaps one reason this great association selected me as their leader this year is because of my experience during the last war, with a great housing project known as Midwest City near Oklahoma City which we started in 1942 directly across the road from a great air depot. In the period we are going into it looks as though we are going to parallel the experiences that we had during that last war.

That is why I brought an aerial photograph of Midwest City. I wanted you to see it. I wanted you to see for yourselves what private. enterprise did in this particular defense area.

Senator SCHOEPPEL. I want to say to you, Mr. Chairman, that what he is pointing out there I have seen. I have driven through it. I have flown over it scores of times.

The CHAIRMAN. I probably flew over it but did not know what I was flying over.

Senator SCHOEPPEL. It is a great project out there that you are building. It goes throughout that entire area.

Mr. ATKINSON. I just want to point out a few things to you, to show you that during the last 10 years, the home-building industry has really grown up.

I must say, however, in the same breath that I am not just representing the large home builders because the great majority of the members of our association are small home builders. I do not believe I mentioned to you that we have 19,247 members as of today. Those small home builders, of course, do the great majority of the building. However, during the last 10 years we have developed merchant-homes builders by the hundreds all over this Nation, who do not think in terms of building a few hundred homes but who think in terms of building complete communities.

When I say, "complete community," I mean just that. As the Senator says, you may have flown over this town and have seen it personally. However, you probably did not realize that we have a main downtown shopping center with 44 merchants doing business. That we have three great schools, a junior high school and a high school. We

have 10 churches, we have four nice markets and we even have an industrial area.

There are several reasons why I want to call this to your attention: When this project was first started, I remember as well as though it had been yesterday, that was the day we were operating under the old Lanham Act. The FHA sent two men up from Dallas to make a survey because they felt sure it would be necessary for the Government, under the Lanham Act, to build a substantial amount of housing to serve this great defense installation. Fortunately for me, the commander of that installation was my personal friend. I stood in rather well with the chamber of commerce and other groups. They had confidence that if we were given the opportunity, that private enterprise could do the job. So as a result, I am glad to tell you that it was not necessary for the Government or the taxpayers to spend 1 penny in the Oklahoma City area, although the record will show that we had over 40,000 defense workers working there at one time in the great Douglas plant in addition to the air depot at Tinker Field.

Now, as a result, we have a well-established, permanent community as I have just outlined to you, of over 11,000 people, and private enterprise did all of it except-I want to give credit where credit is duewe got help from the Lanham Act funds for our first school, and also for the sewer plant. I believe that latter item was over $100,000. Since that time we have gone along on our own in pretty good shape, taking care of the three great schools on a tax basis.

Here is another thing that is important in that connection, too, and this is true with a great number of other builders over the country: I did not build all these homes myself, although we have 3,600 homes in here. We invited other builders in here. We have small builders cooperating in this project. As a matter of fact, we set 160 acres aside and gave them an interest in the shopping center on a prorata basis to the number of homes they built. The reason I am pointing this out is, I believe you have an opportunity to take advantage of this "know-how" these merchant builders have to build similar projects that you will have in connection with installations such as this Savannah River project, and I know there are a great number of our merchant builders right now who would like to go down there and build a complete community for you. That is assuming, of course, that we get the aid of title I of this bill.

Now, I could mention hundreds of builders, but just to mention a few that have been doing the same kind of a job, L. E. Fite, San Antonio; Frank Sharp, Houston; Fritz Burns, Los Angeles; Will Carruth, Dallas, Tex; Dave Bohannon, San Francisco, Joe Meyerhoff, Baltimore; Wallace Johnson, Memphis, Tenn.; Frank Collins, Philadelphia; Bill Levitt, New York; and Nate Manilow, Chicago, who is sitting here with me.

Here would be the real surprise to you, I am sure: You take a small city, Oklahoma City, only 285,000. When I say "only" we think we are a pretty good-sized city, but compared to some others we are small, of course. You would be surprised, but I could give you the names of 10 other builders in Oklahoma City who have developed selfcontained communities to the size that would justify a shopping center, schools, and so forth.