ing, on public housing, with respect to the lowest level of income groups. In other words, the very low-income group.

You yourself can build houses more cheaply for the individual family than anybody in the United States, without any question, but you can't build a house, can you, cheaply enough so that people with that particular income can afford to take care of the carrying charges? Mr. LEVITT. I have been on record, as you know, Senator, for a long, long time, and it is merely a repetition of the same generalization that I make now. If we can't produce-"we" being the builders of America-if we can't produce for this lowest submerged tenth, or whatever you want to call it, I believe very implicitly it is a function of the Government to do so. I don't say let them go. To be selfish about it I think it helps our own hides and our own skins if everything is ours. So, I am in favor of public housing, where private enterprise can't do it.

Senator Ives. I know you always have been, but I wanted to get you on the record that way.

Mr. LEVITT. I am very definitely on the record in that regard. I think this section 221 is a joke, this $7,000 housing business. Senator IVES. I would like you to discuss that section 221, because that has been bothering us.

Mr. LEVITT. I don't think it makes the slightest difference whether you have it in the bill, or out of the bill. I think it is academic.

As I understand it, it is a $7,000 house, a single-family house, in an area which has been a former slum area, which has now been cleared. This is an individual house. Obviously, of course it couldn't be built in the middle of New York, someplace in a slum area we cleared. We wouldn't know how to produce it. And the land that this house stood on would probably be worth $20,000, and you have to produce a building for $7,000. I don't know where we would get them. There may be a couple of isolated sections in some little suburbs that have slum areas that they want to clear out

Senator IVES. Now, you are speaking about metropolitan areas, like that of New York?

Mr. LEVITT. I don't think any metropolitan area could do it.

Senator IVES. The general attitude of the Government housing people seems to be that in most cities that could be worked out. They grant there are exceptions, like New York City and Chicago and a few of the very large cities, where it wouldn't work. Do you have any comment on that?

Mr. LEVITT. I think if you are going to have a slum removal in a metropolitan district, you should build multifamily housing.

Senator Ives. I think you can build multifamily housing under that; can't you?

Mr. LEVITT. Not under section 221. In this provision, with the 40year mortgage, it is a 1-family house, if I remember correctly.

Senator IVES. The fact remains, whether you can or whether you can't. You can't reach the situation, for instance, in New York City or Chicago, that you are trying to reach, by that process.

Mr. LEVITT. Let's take a little place, for instance, where there was some public housing, in Manhasset. They cleared out a slum area, and they built 146 units there, garden-type houses. That wouldn't qualify under this bill. That is outside of New York City. That is in Nassau County.

Senator IVES (presiding). Do you have anything further, Mr. Levitt?

Mr. LEVITT. Not unless you have, Senator.

Senator IVES. I think I have the important things that I want out of the questioning. The principle thing that I was interested in was this so-called flexibility of interest rates, carrying charges, whatever you want to call them, that you think should be fixed.

Mr. LEVITT. On the interest rate, if we put down a rate that made sense and say that is the top rate, I think if you are going to go into any kind of a free-enterprise economy, money will seek its own level and its own rates.

Senator IVES. In the statement made by Mr. Hollyday before this committee on March 9, he states:

The properties covered by the insured mortgages under section 221 could be single-family homes for sale to eligible displaced families or may be projects of 10 or more units to be rehabilitated by nonprofit organizatins for rent to such families.

Mr. LEVITT. That is not the way I read the bill.

Senator IVES. I am not arguing with you about the bill. I was under the impression that that statement had been made previously in these hearings.

Mr. LEVITT. Let's put it this way, Senator: If it can be done, if somebody knows how to produce them, I see no reason why every ef fort in the world should not be made. I presume you are talking about the controversial provision of the 40-year mortgage.

Senator IVES. That is right.

Mr. LEVITT. Why not give it to them? You are not trying to put the Government in business on public housing on this particular phase. It can be done. Give them every advantage under the sun.

Senator IVES. The idea seems to be to keep away from public housing as far as we can, and still take care of the situation. I think we have to recognize that we ought to have public housing. I haven't heard anybody come in here and deny that they needed public housing. Mr. LEVITT. I want to see as little public housing as is necessary, but what is necessary I am 100 percent in favor of having built. Senator IVES. Thank you, Mr. Levitt. We appreciate your testimony.

Mr. LEVITT. Thank you, sir.

Senator IVES. The next witness is Clair W. Ditchy, of the American Institute of Architects. We are glad to have you here, Mr. Ditchy. STATEMENT OF CLAIR W. DITCHY, PRESIDENT, THE AMERICAN INSTITUTE OF ARCHITECTS

Mr. DITCHY. I am Clair W. Ditchy, a practicing architect of 5 West Larned Street, Detroit, Mich. I am appearing here as president of the American Institute of Architects to discuss S. 2938, the Housing Act of 1954.

The American Institute of Architects is a national professional organization which geographically covers the country. Its 116 chapters and 11 State organizations are located in every State of the Union and in certain United States possessions. The organization's membership of nearly 10,000 registered architects comprises the majority of

all practicing architects in the country. The institute is qualified to express the views of the profession.

The institute has a longtime interest and a deep concern with matters of housing and urban redevelopment. Over the years, individual members and special committees of our organization have studied many aspects of the problems involved in this complex field. Many of the solutions, which have been adopted, have resulted in part, at least, from our efforts.

In 1947, Mr. Louis Justement, who has accompanied me here today, headed an American Institute of Architects committee that developed a plan for an urban renewal administration, similar in many respects to the current proposals. The Justement report and recommendations were adopted in 1947 as the long-range policy on urban planning and housing for the American Institute of Architects.

We are pleased to see in this legislation an urban renewal plan which, although it might not be entirely identical to the urban renewal administration at one time propounded by the American Institute of Architects, is, nevertheless, in its aims and objectives, entirely in tune with the thinking of the architectural profession.

Two distinguished members of our organization, Past President Ralph Walker, of New York, and Paul Williams, of Los Angeles, served as members of President Eisenhower's Advisory Committee on Government Housing Policies and Programs. With this special background and after further thoughtful study, the institute's board of directors, meeting in Washington last week, adopted the following policies regarding the Housing Act of 1954.

The American Institute of Architects wholeheartedly supports the objectives of the Housing Act of 1954. We have, however, a number of suggestions to make concerning some of the provisions of the bill. We wish to make it clear that we endorse the bill, as a whole, and that our endorsement of the bill is not conditioned upon the acceptance of these suggestions. For ease of reference, we have set forth our comments below under the various titles of the bill:

TITLE I FEDERAL HOUSING ADMINISTRATION

Most of the amendments proposed under this title will tend to bring cost limitations in line with present-day construction costs, to simplify administration, to abolish or transfer certain housing emergency measures and to abolish the program for "yield insurance" that has never been used. We heartily concur in all of this portion of title I.

We seriously question, however, the advisability of section 221. We are opposed to the underlying principle contained in this section for 40-year 100-percent loans with no downpayment. It seems contrary to the maintenance of sound incentives for homeownership. A further comment by one of our members, Henry Churchill, of Philadelphia, who is an eminent authority in the housing field, is as follows:

The thinner the equity, the greater the danger come hard times; the longer the mortgage, the shoddier the construction; the longer the mortgage, the greater the buyer's cost; the shoddier the construction, the higher the upkeep; the higher the upkeep, the greater the slum potential.

Let us not, on the one hand, establish a broad forward-looking program of urban renewal and, on the other, permit and even encourage the slums of the future.

TITLE II: HOUSING MORTGAGE INTEREST RATES' AND TERMS

We agree fully with this title.

TITLE III: FEDERAL NATIONAL MORTGAGE ASSOCIATION

Architects are perhaps less qualified to express an opinion on this feature of the bill than they are with respect to other phases of the legislation. In general, however, we do not favor the secondary mortgage market plan as proposed in the present bill. We suggest its reconsideration along the lines recommended by the President's Advisory Committee on Government Housing Policies and Programs.

TITLE IV: SLUM CLEARANCE AND URBAN RENEWAL

In many respects this is the most important part of the legislation from the point of view of developing a long-range program. We believe that the provisions of this bill are all distinct improvements on the Housing Act of 1949. Especially noteworthy and praiseworthy is the new definition for "urban renewal project" which recognizes the problems posed by commercial and industrial slums as well as residential slums.

When the legislation on urban redevelopment was being considered in 1949, we were fearful that its inclusion in a housing bill would place an excessive emphasis on housing. The American Institute of Architects believed then-and we believe now-that housing is only a part of the urban renewal problem and that, logically, a division of slum clearance and urban renewal should not be subordinated to a Federal housing agency. If the two functions are to be joined administratively, the relationship might well be reversed. Housing could, quite properly, be made a division of an Urban Renewal Administration.

The institute fully endorses the urban renewal plan as contained in title IV. We believe that it will broaden the present slum clearance and redevelopment program and that it will assist communities in taking effective action to meet their overall problems of urban renewal; they will be enabled, not only to eliminate and prevent the spread of slums and urban blight, but to rehabilitate those areas that are worth saving.

We believe that section 414 is a wise provision, as it will tend to permit experimentation in a new field in which new ideas should be encouraged and tested on a small scale before being accepted as a basis for action on a large scale.

TITLE V. LOW-RENT PUBLIC HOUSING

We concur in this title in its entirety and wish especially to commend the changes in the provisions concerning preferences for admission to low-rent housing.

As a very long-range program, we believe that it may ultimately be possible to house all of our citizens adequately without the necessity of public housing. But this would necessitate great changes in our present system of amortizing FHA mortgages and presuppose a longcontinued rise in the American standard of living.

Under the conditions which now exist-conditions which are likely to continue for some years to come-we believe that public housing is a necessary part of a complete program for urban renewal and housing.

TITLE VI. HOME LOAN BANK BOARD

We have no comment on this portion of the bill.

TITLE VII. URBAN PLANNING AND RESERVE OF PLANNED PUBLIC WORKS

We favor the objectives sought by this title with respect to both urban planning and a reserve for planned public works. The aid for urban planning would be appropriate under the Division of Slum Clearance and Urban Renewal but the aid for advance planning of public works might be more appropriate under some other department in the Federal Government. In any event, we believe that the aid extended to localities will involve a minimum of Federal controland no control with respect to design.

In conclusion, we wish to express our gratification concerning the methods which have been used by the administration in developing a housing policy. The study which has been given by the many experts chosen to serve on the President's Committee on Housing has produced a program which is essentially sound and will be supported by the country at large. It is not revolutionary and it does not abolish many of the housing functions which have been developed under preceding administrations. It seeks, instead, to weed out the needless functions and to improve the administration of those functions which are retained. We heartily concur in the program as a whole. Thank you, Mr. Chairman.

The CHAIRMAN. Would you refer back to page 3, and read that first paragraph again, please?

Mr. DITCHY. We seriously question, however, the advisability of section 221. We are opposed to the underlying principle contained in this section for 40-year, 100 percent loans with no downpayment. It seems contrary to the maintenance of sound incentives for ownership. A further comment by one of our members, Henry Churchill, of Philadelphia, who is an eminent authority in the housing field, is as follows:

The thinner the equity, the greater the danger come hard times; the longer the mortgage, the shoddier the construction; the longer the mortgage, the greater the buyer's cost; the shoddier the construction, the higher the upkeep; the higher the upkeep, the greater the slum potential.

The CHAIRMAN. Of course that wouldn't necessarily follow if FHA were on the job administratively, in respect to the construction; would it?

Mr. DITCHY. The policy must be to be able to meet the financial situations.

The CHAIRMAN. Not necessarily. You could have a 40-year mortgage on a home without in any way affecting the construction; couldn't you? I don't see the relationship between the construction and 40

years.

Mr. DгTCHY. Well, the more attractive the financial situation is to build these homes, the greater number of people will go into it.

The CHAIRMAN. The only virtue to this 40-year business, or no downpayment, or little downpayment, is to eliminate the need for public housing and to convert many of the people that now are in public housing that might in the future go into this sort of thing.

That is the only virtue it has.