which he is attacking the housing problem, we do not believe that the Federal direction of a reserve of planned public works, as a matter of principle, is the proper function of the Housing and Home Finance Agency. This is particularly true of such a program designed to stimulate construction activity whenever the economic situation makes this desirable. We do favor the concept of advance planning, both of housing as well as of all types of public works. We concur in the statement made by Administrator Cole in his testimony on this section of the bill. Publie-works activities involving the design of water supply and sewerage plants, roads, bridges, and other engineering works, should never be considered as mere adjuncts to housing activities. They have little relationship to and require a different type of personnel from slum-clearance activities. They should not be placed in charge of agencies dealing with public housing and slum-clearance activities of the Federal Government. The planning and Federal approval of public works of this nature should be under the direction of Federal agencies professionally experienced and qualified in these special fields. In the December 1953 report of the President's Advisory Committee on Government Housing Policies and Programs, the advance planning of non-Federal public works is referred to only as an activity in liquidation. The new program of section 702 had not then been considered. The same principle would seem to apply to it as to the Agency's school building program about which the President's Committee had this to say: It is the conclusion of the Committee that this is not a proper activity of a housing agency. It should be assigned to the Office of Education, Department of Health, Education, and Welfare. A similar conclusion was reached about the college housing program. The advance planning and other programs of the Bureau of Community Facilities were assigned to the Housing Agency for liquidation, several years ago, following the abolition of the Federal Works Agency. At that time several groups most familiar with the subject, including the American Institute of Architects and the National Society of Professional Engineers, expressed disapproval of the assignment of this planning and community facilities work to the Housing Agency even for the purpose of liquidation. Our organization did not comment at the time, since the work was to be liquidated. Now that its reactivation is proposed, we feel that we should express our views. Assignment of such work as this to the Housing and Home Finance Agency seems to violate the principle laid down by the Commission on the Organization of the Executive Branch of the Government in 1949. That principle was to assign the engineering work to the agency dealing with the basic function, for example, transportation, public health, education, and so forth. I am not categorically saying that this did conflict with the Hoover Commission. I think the facts are that the Bureau of the Budget recommended this transfer on the grounds that after it was liquidated, the personnel could more easily find jobs in the Housing Agency. But both Senators who were members of the Hoover Commission, I believe stated that this was not consistent with the Hoover report, and both of them voted against the transfer of this activity to the Housing Agency. The Bureau of Public Roads was therefore transferred to the Department of Commerce. Responsibility for the planning of other projects has been assigned to the agencies dealing with the basic functions involved-housing to the Housing and Home Finance Agency, airports to the Civil Aeronautics Administration, and so forth. The major exception seems to be certain planning and building programs now handled in the Housing and Home Finance Agency, which are of vital concern to the newly created Department of Health, Education, and Welfare. Since about 80 percent of the work under the advance planning program now nearing completion, or in liquidation, relates to educational, sanitary, or health facilities, the Department of Health, Education, and Welfare is far more concerned with the type of work involved than is any other agency. Comprehensive planning in these fields is among the already recognized responsibilities of this Department. Able engineers are already on its rolls. In Public Law 139 of the 82d Congress, section 361, the duties with respect to health, refuse disposal, sewage treatment, water purification were assigned to the Surgeon General of the Public Health Service. Thus, if the proposed advance planning were limited to health and education facilities, it would constitute a comprehensive program for the types of work for which advance planning is most urgently needed. Of the 20 percent not included in such a limited program, many facilities such as fire houses, police stations, and so forth, can be designed in a reasonably short time and should not be the subject of Federal advances for advance planning. The proposed advance-planning program of section 702 is by no means an overall program, as the title might imply, but would simply be one segment of a public-works reserve. Coordination between highway, airport, educational, and other construction used to stimulate activity in any recession would need to be provided, regardless of which agency handles the program. If a public-works program should actually be undertaken to stimulate construction, some billions of dollars of projects would be required. A glance at the work undertaken from 1934 to 1938 will indicate how remote such a program is from housing. The Public Works Administration during this period was concerned with such projects as New York's Triborough Bridge and Lincoln Tunnel, costing nearly $100 million; sewage-disposal plants for Cleveland, Chicago, New York, and the Twin Cities, costing over $100 million, as well as others in dozens of cities; great bridges spanning the Ohio, the Missouri, the Mississippi, and other great waterways throughout the country; educational buildings, State buildings, courthouses, dams and power projects, even such enterprises as the New York-Washington electrification of the Pennsylvania Railroad. If the need again arises, the establishment of some similar supervisory agency would appear to be a logical development. Advance planning of public works was devised to lessen the delays in commencing construction work needed for economic stimulation. The greatest part of the delay often occurs in making preliminary economic analyses, foundation studies and acquiring of land, rather than in making final plans. Fully completed designs may become obsolete before construction is started because of changed requirements and improvements in technology. This is especially true at a time of high prospective construction activity such as the present, because an emergency public-works program is principally helpful for stimulating a depressed construction industry rather than for remedying unemployment situations that may occur in other industries. A considerable part of the proposed advance planning should therefore consist of careful preliminary planning so developed that final plans can be completed in a few additional months. Incidentally, I have urged that point in the previous advanceplanning programs, with little effect. But I note Mr. Cole fully agrees with the idea in his testimony. Now, an agency that specializes in a particular field is more competent to deal with such basic preliminary work than one concerned largely with having a reserve of blueprints. Thus, for example, the Public Health Service is intimately concerned with the basic planning of water treatment and sewerage facilities and hospitals. The American Society of Civil Engineers favors sound advance planning for the purpose stated in section 702. This work of the Division of Community Facilities should be kept separate from that of divisions handling the slum-clearance planning. It would be logical to assign the program proposed in section 702 to the Department of Health, Education, and Welfare as a program of advance planning for sanitary, health, and educational facilities. Inasmuch as the President's Advisory Committee on Housing has recommended transfer of personnel engaged on the presently most active work of this Division to the Office of Education, it would be logical to transfer the Division of Community Facilities to the Department of Health, Education, and Welfare, to be maintained as a unit for carrying on the proposed advance-planning work, in addition to these continuing programs, in close cooperation with the Public Health Service and the Office of Education. The authorization in section 702 should, we believe, be to the Secretary of Health, Education, and Welfare; or to the President, to assign to agencies along the lines of their major responsibilities. Thank you, gentlemen. Senator BRICKER (presiding). Thank you very much, Mr. Ehlers. Mr. EHLERS. Thank you. Senator BRICKER. The next witness is Mr. Lee C. Bean, of the Wherry Housing Association. Mr. Bean, do you wish to put your prepared statement in the record, or do you wish to read it? Mr. BEAN. I would like to read it, if I may. Senator BRICKER. You may proceed. STATEMENT OF LEE C. BEAN, CHAIRMAN, LEGISLATIVE Mr. BEAN. My name is L. C. Bean and I am chairman of the legislative committee of the Wherry Housing Association. The Wherry Housing Association is an association of owners of military housing financed under title VIII of the National Housing Act. The owners in the association represent approximately 40,000 of the 71,766 units which were completed and in operation as of December 31, 1953. There is a very pressing need for housing at military installations which cannot, at this time, be deemed to be a permanent part of the military establishment and eligible for title VIII mortgage insurance. The Wherry Housing Association would like to recommend for your consideration amendments to the National Housing Act which, in our opinion, would enable private enterprise to furnish necessary and adequate housing for personnel at installations which cannot qualify for Wherry housing under the present provisions of the National Housing Act by reason of the fact that the installations requiring housing cannot be certified as a permanent military installation. The activity at these installations is for an indeterminate duration, maybe 10 or even 25 years or possibly longer. We think title VIII can also provide housing at many of this type of installations. In order to provide housing at installations which cannot be certified as permanent, it is recommended that section 803 be amended to add to the present insurance provisions a program for housing at military establishments when there is a need to provide adequate housing for the personnel at such installation and there is no present intention to substantially curtail activities at such installation. Eligible mortgages under title VIII may not exceed 90 percent of the amount which the Federal Housing Commissioner estimates will be the replacement cost of the property or project when the proposed improvements are completed or $8,100 per family unit for such part of such property or project as may be attributable to dwelling use, except that in exceptional cases where the Secretary of Defense and the Federal Housing Commissioner concur that the needs would be better served by single family detached dwelling units, the mortgage may involve a principal obligation not to exceed $9,000 per family unit for such part of the property as may be attributable to such dwelling units. It appears that in order to assure the success of this proposed program it will be necessary to increase the existing authorized insured mortgage limitation from its present 90 percent limitation to 95 percent of the amount which the Commissioner estimates will be the replacement cost of the property or project when the proposed improvements are completed. This increase is designed to minimize the increased hazard to the sponsor for his making the said investment in the required housing on a base which cannot be certified as permanent. The existing dollar limitation of $8,100 per family unit for such part of the property or project as may be attributable to dwelling use with the additional proviso for a mortgage of $9,000 per family unit where it is determined that single family detached dwelling would better serve the need should be adequate under the proposed program. It appears that the amendment would require several provisions substantially as follows: 1. After the last word in section 803 (b) (2) delete the period and substitute a semicolon and add the following: and provided further, That where the installation is not a permanent part of the Military Establishment and the Secretary of Defense or his designee shall have certified to the Commissioner that such installation is an essential part of the Military Establishment, the mortgage shall be insured under this title. 2. In section 803 (b) (3) (B) delete the word "and" after the semicolon and insert the following: except that where the Secretary of Defense or his designee certifies that the installation is an essential part of the military establishment the mortgage may involve a principal obligation not to exceed 95 percentum of the amount which 3. Delete section 803 (b) (2) (C) and substitute the following: (C) not to exceed an average of $8,100 per family units for such part of such (D) not to exceed an average of $8,550 per family unit for such part of such And provided further, That where the Secretary of Defense or his designee The association recommends that the proposed Housing Act of Sir, I would like to have it made a part of the record. Effect of increased interest rates on average Wherry housing mortgage of $8,100 |