Any family regardless of their source of income, with an adjusted income of $2,000 per year should be responsible for no more than $500 per year rent. The fact that the mony comes from ADC instead of employment or social security or gambling should make no difference. The fact that the welfare department calls a certain portion of that check the family receives rent should make no difference, the overall effect is the same. Brooke III has meant that families receiving welfare checks can now apply a greater portion of that check to other necessities, such as food. With many welfare families already suffering from malnutrition because of inadequate incomes and escalating food prices, they are even more unable to take this larger portion of their welfare check and use it for rent.

Repeal of Brooke III would be a clear case of the government giving with one hand (through HEW) and taking away with the other (through HUD).

The public housing definition of income should not be revised as a means of increasing income. The present definition was well thought out and represents considerable work. The definitions proposed by the Administration are irrational, full of contradictions, and full of cultural biases which are meaningless and useless. It gives a $300 deduction to a spouse, who is head of the household if she or he is a wage earner, why not to another working adult in the household? A spouse who is not working who is an even greater burden on the income of the head of the household. It gives a $300 deduction to each minor, each full time student, and each disabled or handicapped person (other than the spouse), but not to dependents who are over eighteen and may also be a burden on the family, nor to a spouse who has no income but is a full time student or is disabled or handicapped. Perhaps the administration wishes to discourage marriage among people in that category.

Further, it deducts from income extraordinary medical expenses, but

These items

not unusual occupational expenses, nor child care expenses.
were included in the Brooke Amendment as incentives to work. The

Administration apparently opposes such incentives.

NTO opposes the concept of "income mix" in public housing as now being pursued by the Administration. Needy families are now being denied admission to public housing because they cannot afford to pay enough rent to reduce the demand on federal subsidies. Local housing authorities are being denied the right to produce housing unless they are assured of high enough rents from the future tenants. There is a desire to make "model communities" of public housing enclaves at the expense of the outside of the community by keeping down the number of very poor residents. While this may perhaps aid the public houing project, it works severe hardships on the very poorest families who cannot afford housing in the private market and are condemned to cold, overcrowded, vermin infested, slums that shorten their lives and kill their morale and initiative. It also does a disservice to the locality

as a whole which must allow concentrations of such families in privately owned deteriorated rat traps to continue, with all the attendent problems of crime, disease, drugs, etc. It would be better for the community as a whole to have at least housed such families in comparatively superior public housing, giving them adequate room, heat, social services, etc,.

The poor who have

more money available can rent housing on the open market more so than the

very poor, and thus not aggravate the desperate problems of the community as a whole.

A local housing authority has an obligation to serve the interest of the broader community, not just its own enclave. It cannot serve that broader interest following HUD's policy of "income mix". Legislation should ensure that no one be denied admission to public housing or access to low-income federal housing programs because they are too poor even an unknown, forgotten wanderer is buried.

The "sense of Congress" portion of the Housing Act which provides that no tenant "should be barred from serving on the board of a public housing agency because of his tenancy". should be strengthened. In New Haven,, Connecticut, and in East St. Louis, Illinois, tenants of public housing who were selected by their respective mayors, with resident and community support, to sit on the Board of Commissioners of their local housing authority have been denied their seats because their state charges that it would be a conflict of interest. This has created unnecessary conflict and denied their Boards the advantage of the representation of tenant interests in their deliberations and decisions. The "sense of Congress" statement

should be converted into a simple law stating that "No tenant shall be barred from serving

"

etc.

Mr. Chairman, our approach to this testimony has been primarily as victims of the housing crisis, not as those who stand to profit, as do builders, bankers, real estate brokers, social workers, and others, from one or another particular solution to that crisis. Our needs are real and they are simple. In the words of the Housing Act of 1949, they are "a decent home and a suitable living environment."

We call upon this Committee to approach potential legislation from the perspective of the housing consumer and take these housing goals

seriously.

Senator PROXMIRE. I am going to call the final witnesses to come together. They are both experts in the field, and Senator Brock and I are interested in their statements. They are Mr. Gus Cramer, executive vice president of the Communication Workers of America, and Prof. Barlow Burke of the Washington College of Law, American University. Gentlemen, because the hour is late, and because we have hearings this afternoon at 2 o'clock, I would appreciate it if you could possibly, and tell me if you can't, if you could possibly limit your statements to 5 minutes and then give Senator Brock and myself an opportunity to question.

Would that be satisfactory?

Mr. CRAMER. Yes, Senator Proxmire.
Mr. BURKE. Yes, Mr. Chairman.

STATEMENT OF GUS C. CRAMER, EXECUTIVE VICE PRESIDENT, COMMUNICATIONS WORKERS OF AMERICA, ACCOMPANIED BY HALL SISSON, LEGISLATIVE STAFF, COMMUNICATIONS WORKERS OF AMERICA

Mr. CRAMER. Mr. Chairman, and members of the subcommittee, my name is Gus Cramer, and I am executive vice president of the Communications Workers of America, a union representing more than 575,000 men and women employed in the communications and other industries.

Appearing with me today is Hall Sisson of our legislative staff.

It was just 12 years ago that I appeared before this subcommittee to plead the case of the working man and woman who was faced with the unnecessary and unjustly high cost of settling the purchase of a home.

At that time interest rates were fairly low, and mortgage money readily available. What we were trying to do was get the Congress to eliminate the final stumbling block in the home buying process, the so-called settlement costs. We were trying to get a fair shake for those individuals who could afford the downpayment and the monthly payments required to own a home, but who could not scrape up enough money to pay for such required items as title search, title insurance, tax escrow, transfer taxes, lawyer's fees, and the like.

We took the position that mortgage lenders should be required to absorb the cost of title search, and any title insurance they might require as a condition for granting a mortgage. We also advocated an end to price discrimination between mortgage lenders and home buyers in the sale of title services so that if a home buyer decided to purchase title insurance on his own, he would pay the same rate as the lender. And finally, and most importantly, we stated that settlement lawyers should be prohibited by law from taking any commissions from, or kickbacks for, directing the services involved in real estate settlement. We felt this was a reasonable position, and one which would bring needed reform to the settlement process. But what did we get for our reasonableness?

The Senate passed the omnibus housing bill of 1972, and sent it to the House with a significant provision which called for the Secretary of Housing and Urban Development to determine reasonable charges

for necessary services involved in the settlement process. It was a start.

The House Banking Committee worked almost 7 months on the bill. When the 1972 Housing Act was reported out, there were many fine improvements relating to the settlement process, but to our astonishment we discovered that the bill would have the effect of legalizing kickbacks to the parties involved in real estate settlements. That bill died in the House Rules Committee.

The final blow to our hopes for equity in the settlement process came when HUD dropped its plan to set maximum settlement charges for FHA and VA mortgage transactions, after a 2-year study by HUD showed conclusively that excessive settlement charges and practices are prevelant in many areas of the country and that maximum charges should be set. All that was last year.

Now interest rates have broken all records; mortgage money is nowhere to be found; housing starts are nosediving to record lows; and we have a moratorium on federally subsidized housing.

Working men and women can no longer afford the high cost of owning a home. Before, we considered it was just a problem of high settlement costs. Now it's a problem all the way from start to finish of the home-buying process.

So Mr. Chairman, I guess it's high time we quit trying to be reasonable and decided to get firm with our message.

The Communications Workers of America fully support S. 2288, Senator Proxmire's Closing Cost Reduction Act of 1973. We do so knowing full well that the cries of the title insurance companies, the settlement lawyers, and some lenders will be heard all over Capitol Hill and in the Department of Housing and Urban Development. But they had their chance to reform. They saw the handwriting on the wall in the 1972 Housing Act. The mere fact that Senator Proxmire had to reintroduce this legislation proves the lesson was lost upon them.

Mr. Chairman, we feel that interest rates will eventually come down. We also believe that mortgage money and homes will be readily available. But unless Congress does something about the settlement cost ripoff, working men and women will still be faced with that final stumbling block to one of the most cherished of the American dreamsthe owning of a home.

The Communications Workers of America thank you for the opportunity to appear before this subcommittee.

Senator PROXMIRE. Thank you very much, Mr. Cramer.
Professor Burke?

STATEMENT OF BARLOW BURKE, JR., ASSOCIATE PROFESSOR OF LAW, AMERICAN UNIVERSITY LAW SCHOOL

Mr. BURKE. Thank you, Mr. Chairman.

My name is Barlow Burke, and I am an associate professor of law at American University Law School, where I teach in the areas of real property and conveyancing law. Some 2 years ago, I authored studies for the Department of Housing and Urban Development on the transfer of residential real property in 13 urban areas around the