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project by the local housing authority could only lead to depreciation of the project itself, and depreciation of the value of their lands and homes by reason of the same.

It is the feeling of the veterans, the residents, and owners of properties in the vicinity of said project, and real estate and businessmen in the community, that it would be a serious error for such acquisition to take place. While admitting the need of low rental houses in York, all the groups aforesaid feel that such acquisition will not accomplish any solution of that problem. .

We are of the opinion that with the exception of the mayor and the council of the city of York, all other local taxing bodies are opposed to the idea of such conversion to low-rent housing for the reasons aforesaid, and also for the inevitable loss of tax revenue.

We might add that the opinions of the aforesaid veterans group and the group of property owners in the vicinity have been expressed by petitions, which petitions have been filed with the mayor, the city council of York, the school board of York and the county commissioners, as well as the public housing authority, copies of which petitions, together with all other papers in our files, are at your disposal.

We feel that there is a mandate from the people of this community that you, as our representative in Congress, use every effort and means to have the aforesaid War Housing Project No. P. A. 36295 removed from section 606 of the aforesaid Senate bill, and from any similar housing bill which has been, or may be introduced in the House of Representatives.

We trust that you will see fit to cooperate in this matter, and urge you to feel free to call upon us for any additional information that you may deem to be necessary.

Sincerely yours,

BUDDING & Yost,
By J. RICHARD BUDDING.

Mr. LIND. I represent the Twenty-first Congressional District of Pennsylvania which comprises York, Adams, and Franklin Counties. I am here for the purpose of requesting your committee to delete from section 606 of H. R. 5631, project No. 36295, which would transfer to the Housing Authority of the City of York the Yorktowne Homes. Yorktowne Homes is a Lanham Act permanent war housing project. At present, a group of veteran tenants and nonveteran tenants have banded together for the purpose of purchasing this project. A petition had been sent to the Public Housing Administration under date of May 26, 1949, expressing their views and objections to the acquisition of Yorktowne Homes, by this group, through their attorneys.

I have personal reason to believe that the local housing authority of the city of York would be opposed to the acquisition of these homes by that authority.

A petition with approximately 600 signatures, representing property owners surrounding the Yorktowne Homes, has been presented to the local housing authority on the grounds that if turned into low rental housing it would decrease the value of their properties. This same petition has been presented to the county commissioners, the school board and to the city council, these groups representing the local taxing authorities. It is my opinion that the majority of the local taxing bodies would not agree to accept a token payment in lieu of taxes on this project, in the event it would be turned over then to the local housing authority.

I have also received numerous letters opposing the transfer of these homes to the local housing authority. I have had but one letter in favor of this transfer and that was over the signature of the mayor of the city of York, Mr. Felix Bentzel.

It is my opinion that the present occupants of these homes should be given an opportunity to buy them rather than let them be transferred to the local housing authority under the provisions of this bill.

Mr. PATMAN. Mr. Holder was to be here from Dallas, Tex., but he had an unfortunate accident and he is unable to be here. I have a telegram that I would like to insert in the record and also a letter he had written me about the housing project at Dallas which is along the line of Mr. Westbrook's testimony yesterday, which relates to a specific problem.

The CHAIRMAN. That may be inserted in the record. (The telegram referred to is as follows:)

Col. LAWRENCE WESTBROOK,

Trans-American Development Corp.:

Have suffered an accident, with broken bones in right hand and wrist and arm in cast. Have partial paralysis in left arm. Am unable to care for myself and cannot travel alone. Very sorry because I feel that mutual ownership is so important and our pilot projects have been so successful that the congressional committee should know all these facts first-hand. Please say to them from us that in two projects are 600 satisfied families with a feeling of shelter security equal to any fee ownership. The cohesive society makes for better participation in civic events, welfare matters, political consciousness and recreational affairs. They have established a sound financial structure and maintain their premises in a highly creditable manner with few exceptions. The rare exception of poor maintenance is dealt with in an orderly manner and the derelict member required to pay the charges. If you think it wise would be glad to fly plastic audograph record of testimony but think that you and Major Griggs can handle.

RAY HOLDER.

WILLARD HOTEL,

Hon. WRIGHT PATMAN,

Washington, D. C., May 10, 1949.

New House Office Building, Washington, D. C. DEAR WRIGHT: In connection with the consideration of your cooperative housing bill, H. R. 2811, I wish to submit you the following:

(1) I have managed Dallas Park and Avion Village since they were first built nearly 8 years ago.

(2) We are providing good, comfortable homes in Dallas Park for from $30 to $40 a month ranging in size from one bedroom, living room, kitchen and bath to three bedrooms, living room, kitchen and bath. These charges of from $30 to $40 a month include the building up of very substantial reserves-- at least $10 a month of these charges being allocated to such reserves, plus $4 a month as of this date for ownership equities.

(3) Rental charges for similar accommodations in the same areas as these projects run anywhere from two to three times what mutual owners are paying. I control some rental properties myself and I am getting $90 a month rent for a three-bedroom house that is not nearly as good as mutual owners in Dallas Park are paying $42 a month for. And it should be noted that the Dallas Park members are buying their homes and will have them paid for within 15 years.

(4) The civic pride of the residents of our projects is amazing. They stand higher in the estimation of Dallas citizenship as a whole than the residents of any other neighborhood. In order to obtain credit at Dallas stores, our mutual residents need only prove they are members of the corporation. We have never lost a dime in collection.

(5) We have the lowest divorce rate in Texas, if not in the Nation-only three divorces having been granted in 2 years. We have practically no juvenile delinquency. We never had a traffic accident involving a child.

(6) Our actual experience has proved beyond any question that under mutual home ownership the housing problems of the great majority of American families can be solved without Government subsidy. We don't have to guess at it or theorize about it- we know it.

(7) I have had a good deal of experience in real estate. I don't believe there is ani ndividually owned home in Dallas which does not have something about it that needs repairing. There is not a single home in Dallas Park or Avion Village that needs any repair of any kind whatsoever. The exteriors and interiors of the homes in Dallas Park and Avion Village are far superior in appearance to individually owned homes and rented homes in the city of Dallas as a whole.

(8) The board of directors of Dallas Park was sufficiently interested in getting the experiences of its organization before your committee that they appropriated funds to send me up here to testify. I am greatly disappointed that the hearings have been postponed, because it is necessary for me to return to Dallas not later than Thursday. I do not know yet whether I can come back when hearings are held, but I am writing you this letter so you will have authentic information about the actual experiences of two pattern projects that were built under the mutual home ownership program of the Federal Works Agency back in 1941 and 1942. Sincerely yours,

RAY HOLDER.

DALLAS, TEX., July 28, 1949.

Hon. WRIGHT PATMAN,
Member of Congress,

Washington, D. C.

DEAR WRIGHT: As you know I have been to Washington twice prepared to testify on the official housing bill, now contained in the omnibus housing bill. Due to circumstances over which no one had any control, hearings were not had at the time. It was my purpose to come back for these hearings, but having had a personal accident, which incapacitates me to travel, I am hoping that you will be able to place in the records the following brief testimony regarding the local level operations of the two mutual housing projects which I shall name.

The first of these mutual housing projects is known as Avion Village and is located at Grand Prairie, Tex. This project was built in 1941 and occupancy began August 16, 1941. I was the administrative head of this project since its inception and have continued and am now general counsel of the corporation operating the project. This project consists of 300 homes.

The other project is known as Dallas Park and is located in the northwest part of the city of Dallas. It was built in 1941 and opened for occupancy in January 1942. I have been the administrative head and am now the administrative head and general counsel of this project, and have been since it opened for operation. Since the inception of these two projects, it was intended that they should be used as pilot or trial projects of the mutual-ownership plan, and the people who live in these projects have all been thoroughly indoctrinated from the beginning on the merits and demerits of the mutual-ownership plan. When it came to final action being had on these projects, the matter was left to the vote of the people in all projects, and they all elected to go into the mutual-ownership plan by signing their mutual-ownership perpetual-use contracts to the extent of 100 percent in each of the projects. It is interesting to note that when the sale was actually made by the United States to these corporations that we allowed ourselves 5 days in which to sign up all contracts and to have the contracts delivered to the Public Housing Administration, which was acting as the agency in charge for the United States at the time. In each of the projects 100 percent of the contracts were duly signed and delivered within the 5 days.

I shall not bore you nor the committee with a lot of detailed information, which has been placed in evidence already, and which was furnished by us from our official files and records, and all of which is authentic.

We have made a constant survey of comparable rents for use charges for similar accommodations through the vicinity of each of these projects, and the records will show that the payments of purchase of these projects by the members themselves does not exceed one-half for the rents that are being paid for.similar accommodations on adjacent property to each of these projects, and in many instances the total charges being paid by the occupants of these projects is far less than one-half of the comparable charges being paid for similar accommodations in the vicinity.

A sound system of financing was set up at each of these projects and after 14 months of operation as actual owners of the project, these projects have accumulated more than $50,000 in reserves. They have applied incoming payments to advance their mortgage payment by three advance payments at each of the projects.

It is notorious and rather famous from the words of visitors to these projects that no homes are better kept, and that no people take better pride in their homes that do the occupants of the two mutual-ownership projects in question. The members themselves maintain their premises and maintain the interior of their homes. The corporations maintain the exterior of their homes and provide and repair all reasonable wear and tear. The 600 homes at these 2 projects are model homes because of the fact that the occupants themselves take such great pride in their ownership and in the security of their homes.

Probably the most value, aside from the security of the family by proper shelter, is the widespread recreational program that is carried on by the people themselves. They organize themselves into groups and provide proper direction and pay for the operation out of their own pockets and again a recreational program which is carried on at these projects is set up as cited by experts who have visited and informed themselves as being a model operation for the enjoyment of a community life and the care of the children who reside in projects of this kind. There are approximately 700 children in each of these projects and juvenile delinquency is unknown. Marital troubles are very minor.

These corporations have never lost a dime in collections.

As an example of how these corporations stand in community life, the corporations have never had any difficulty in obtaining the services of outstanding citizens to act as members of the board of directors of the two corporations. As an example, Mr. Hugh Prather, one of the ablest real-estate developers of Dallas, and the man who developed the swanky Highland Park and Highland Park West, furnished the skill and ability which consummated the set-up and sale of these two projects at the time. Mr. De Witt Ray, the president of the third largest bank in Dallas, is a member of the board of directors of Dallas Park and has furnished valuable financial assistance in the way of advice and soundly financing these two projects. Mr. Julius Schepps, the greatest Jewish philanthropist of the Southwest, and a capitalist and wealthy man, gives of his time freely to planning and working out the problems of these corporations, and has been a member of the board of both corporations since their inception. Mr. Anson Brundage, one of the leading editors of the Southwest, is a member of the Avion board and has given much of his time and advice and assistance in working out the problems and making it possible for these corporations to be set up on a sound financial basis.

The inception of these projects and the plan as explained at the time, and many times by feature writers and others in the Southwest has brought forth a close scrutiny of persons who did not believe that the plan would work. These "doubting Thomases" have certainly changed their opinion, and today these projects are regarded as the solution for the small man with a small income who does not desire any kind or character of hand-out, but who is intensely and fiercely independent in an economic way, and who desires to pay his own way. The experts and others, especially the critics of the plan, have ceased their criticism, because an actual example of these two projects convinces them that the plan does work.

The slogan and watchword of these two projects is "Democracy in Action." The people understand what democracy is and they have delegated their authority to professional and competent people to carry out a workable plan of home security and home payment on a basis that is reasonable and fair and just. The participation in their own affairs has taught the people of these two projects that it is wise and best to participate in all civic and political affairs and they do just that.

I could elucidate and stand any kind or character of cross examination on this matter, and it is with deep regret that I cannot appear personally at this time. Very truly yours,

AVION VILLAGE MUTUAL OWNERSHIP CORP.,
DALLAS PARK MUTUAL OWNERSHIP CORP.,
RAY HOLDER, General Counsel.

QUESTIONS BY MR. PATMAN AND ANSWERS BY MR. LAWRENCE WESTBROOK

Question. I see that the managers of the Dallas and Dayton projects state that their mutual home owners are buying their homes with payments of from $30 to $40 a month. Do you think these costs could be duplicated at this time? Answer. I am quite sure of it. Construction costs are down now from 10 to 25 percent below the highs. Building techniques are improving. For example, I know of one rental housing project approved by FHA where two-bedroom duplex units constructed of concrete are being produced at an over-all cost of about $5,000 each. Mutual home owners could buy and pay for these units in 25 years at a monthly cost of from $30 to $35.

Question. Don't you think people generally prefer to own their homes in fee simple rather than under your plan?

Answer. Yes; I think they would until they understand that a proprietary lease contract gives them essentially the same privileges as a fee-simple title without their having to assume any personal debt. Mutual home ownership is a new

idea to most people. When they understand it, and when it has the protection and sanction of Government sponsorship, I think they will go for it.

Question. Do you think veterans and others who have bought homes on the credit since the war are likely to lose them through foreclosure?

Answer. Yes; I think a great many of them will. The foreclosure rate during the past 10 years has been very low because prices have had an almost uninterrupted advance during that time. In the preceding 10 years, however, more than half the homes in the United States against which mortgages were outstanding were foreclosed upon. It will probably never be that bad again, but we can expect real trouble whenever falling prices and rising unemployment persist together for any considerable length of time.

Question. What would be likely to happen to mutual home owners under such conditions?

Answer. If a mutual home ownership corporation had not been in existence long enough to have accumulated sufficient reserves to weather the storm, then it might have to go through reorganization, which is the polite term for bankruptcy. But the individual mutual home owners comprising the ocrporation would be much better off than owners of homes in fee simple bought on credit under similar conditions. They would not be responsible for any losses beyond equities that they might have in the corporation itself. They would, as a matter of course, be given a preferred status in whatever reorganization plan that might be adopted. Question. Why wouldn't it be better for veterans and others not finally settled down to rent their homes rather than to buy them, whether in fee simple or under mutual home ownership?

Answer. For families who know their plans for only a few months in the future, renting is certainly the only sensible answer. But, where there is assurance of a stable situation for a year or more, mutual home ownership is perferable. The proprietary lease contract is readily transferable. The initial investment is small. Mutual home ownership itself creates stability. There is great satisfaction in living in a home of one's own. And the savings effected are very considerable. Question. Do you mean that as a general thing mutual home owners can buy homes more cheaply than they could rent them?

Answer. Oh, yes, I don't think there is any doubt about that. The maintenance and repair costs under mutual home ownership are much less than under renting. Then, of course, the landlord of a rented house has to make a profit. Let us take for example the rental housing project that I referred to earlier. If it were a mutual home ownership project, the mutual home owners would have to pay only from $30 to $35 a month to buy it. But as it is, the tenants are going to have to pay $45 a month just for rent. The saving of $120 a year, plus at least half that much more in accumulated equities and reserves, is a very important consideration to families in that income bracket.

Question. What happens when a mutual home owner wants to sell out, say to move to another city?

Answer. He just sells his proprietary lease. This is a great deal easier and cheaper than selling a house to which a deed has to be given. The management of the mutual corporation keeps a file of people who want to buy it. This makes a competitive and readily available market. The agreed-upon price is paid to the seller, who simply assigns his lease to the buyer. There are no commissions, no fees or other so-called "closing charges.”

Question. What happens when a man's famliy gets too big or too small for the house he is in, and he wants to move, but not leave the community?

Answer. Most families are constantly changing in size up to the time the children get grown and set up homes of their own. Because of this fact nearly every family normally has to spend a considerable length of time in a house that is either too small or too large for current needs. Under mutual home ownership, families needing more or less space notify the management of that fact. Whenever two requests are found to be reciprocal, the management notifies the parties concerned and they get together and work our a trade. They don't have to pay any commissions or fees. They don't have to leave the neighborhood and establish new church, school, and social connections. And they usually don't have to wait very long.

This is a very important matter. It is estimated that the average family moves five times during its life cycle. The cost of buying a home in commissions and closing charges is not less than 10 percent. The average loss taken by the seller is probably another 10 percent or more. Thus the very business of moving costs most families as much as the total average value of the houses they have lived in. There is much truth in the old adage that three moves cost more than one fire.

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