the office during my absence about 2 weeks ago and asked how many families receiving assistance through this department lived in public housing. A member of my office staff called the Municipal Bureau of Social Service, through which division our general-assistance program is serviced. The head of that division was out and her secretary obtained a quick estimate. The person in my office not knowing this was an estimate gave the figure to Mrs. Stephens. Another factor to be considered is that we assist cases for a comparatively short period of time, 61 percent of our caseload turning over in 1 year and 40 percent in 6 months. Families eligible for ADC grants are assisted for a maximum of 60 days or until the State awards the ADC grants. Ten to 15 percent of the cases whom we assist are temporarily ill. The rapid turnover does not permit us to assist all cases with their housing needs nor do all families whom we serve want public housing. A very large percentage live in furnished rooms, having no furniture of their own. I regret very much that erroneous information was given out by this office on the numbers of relief families living in public-housing projects. It is contrary to our long-established policy for staff to issue estimate figures about our own department unless such estimates are cleared for accuracy with the director. It is also contrary to our policy to give out statistical information about another agency. Rather has staff been instructed to refer the inquired to the agency concerned. The people who supplied the information to Washington further complicated the situation by supplying the wrong information about the number and composition of the caseload and calling it public assistance. I hope that this letter will aid in getting the misinformation corrected. Sincerely, Mr. N. H: DOSKER, LOUISE DIECKS, Director of Welfare. LOUISVILLE, KY., May 19, 1955. Administrator Consultant, Municipal Housing, Louisville, Ky. DEAR MR. DOSKER: In reply to your request for the number of public-assistance families residing in the housing projects in the city of Louisville, I have secured the following figures from our caseload reports as of May 1, 1955. We have 1,781 ADC families which contain 4,624 children. We have 679 white ADC families. Of these, 298 families are living in the housing projects and there are 15 white ADC families living in the housing projects who are applicants for public assistance. We have 1,102 colored ADC families. Of these, 244 ADC families are living in housing projects and 7 families in the housing projects are applicants for ADC. We have 4,420 OAA recipients-3,100 white OAA recipients. Of these, 141 families and 3 applicants live in the projects. We have 1,320 colored OAA recipients. Of these, 134 families and 4 applicants live in the projects. The total caseload figures given above include both Louisville and Jefferson County. I would estimate that 10 percent of our OAA and ADC families live outside the city limits of Louisville. Our OAA families may consist of two or more OAA recipients as we have many husband-and-wife families and OAA recipients living with other families in the projects. Sometimes 2 sisters or 2 brothers may constitute a family, or an old-aged couple and another OAA recipient may constitute a family. If a more comprehensive report is desired, I am of the opinion that our director, Mr. Aaron Paul, would authorize a thorough survey. The above figures show we have a total of 817 active recipients living in the projects and 29 families who are applicants for public assistance. Yours very truly, 36 C. L. SIEVERS, Social Service Supervisor. Proceeding further, we find that the fixed permissible Federal subsidy for Louisville's public housing for fiscal 1954 was $1,123,500.35 A subsidy of $754,676 was required. The difference of $368,824 represents a reduced subsidy but only by the housing of higher income tenants and a denial of public housing to many of lower income who are in the greatest need. 35 Pp. 2332, 2346, 2347, House Appropriations Committee hearings on Independent Offices Appropriations Act of 1955. 36 Ibid. Public Housing Authority in rebuttal of the above allegations has submitted the following facts: Despite NAREB's opinion, local authorities are complying with the congressional mandate to house families in greatest need. In 1953 (the last year for which complete figures are available) eligible families living in public housing, with an average of 3.98 persons per family, had a median income of only $2,062 a year. Twenty-four and five-tenths percent of the families living in public housing in 1953 had no gainfully employed workers, and were living on public assistance or benefits or, in some cases, on contributions from relatives. Another 9.4 percent of all families, with some earned income, also received public assistance or benefits to supplement their earnings. For fiscal year 1954 the Philadelphia Housing Authority received Federal subsidies on 2,859 units of public housing. The housing authority in its report of 1953 states that 5 percent of the tenant families received "one or another form of public assistance * ** 37 The maximum subsidy permissible for fiscal 1954 on the 2,859 units was $468,540.38 Of this, $104,791 was not used.39 This money could have been used so that the housing authority could have admitted more of the great number of families undoubtedly receiving public welfare assistance in Philadelphia for that year. But perhaps the Philadelphia Housing Authority wants to avoid a larger number of very poor people in their public housing project. Public Housing Administration in rebuttal of the above allegations has submitted the following facts: NAREB has relied on an old printed report of the Philadelphia authority for its facts. It did not ask the Philadelphia authority for more up-to-date statistics. The truth-in 1953 the number of families receiving assistance in the Philadelphia projects was abnormally low because of the large number of veterans recently admitted. Figures for all families living in low-rent housing in Philadelphia as of March 1, 1955, were as follows: The median income of all occupant families as of the same date was $2,600-a figure representive of the very lowest income groups of Philadelphia. Page 13 of the 1952-53 Report of the Seattle (Wash.) Housing Authority reveals that the Sand Point Homes (200 units) not only needed no Federal direct subsidy but made a net profit of $1,466 in 1952. In 1953 the project had a net profit of $1,347. 40 Does this mean that the economic rent paid by public housing tenants in this project is ample to permit operation of the project without subsidy? We don't know. We are advised, however, that only about 20 percent of those housed in public housing in Seattle at the end of 1953 came from the group receiving public welfare assistance. Here is another example of public housing as a special privilege with rents pegged high enough to return a net profit, yet conforming to what we believe is a national pattern of systematic exclusion of needy people as tenants. This would be a most fruitful area for a congressional investigation. Public Housing Administration in rebuttal of the above allegations has submitted the following facts: NAREB admits it does not know. It could, however, have found out by a simple inquiry from the Seattle Housing Authority. Sand Point Homes is not low-rent housing. It was built during the war, but as defense housing under the provisions of Public Law 671. Because of the 37 Philadelphia Housing Authority Report for 1953, submitted March 29, 1954, p. 18. 38 P. 2348, House Appropriations Committee hearings on Independent Offices Appropriations Act of 1955. 30 Ibid. 40 P. 2350, House Appropriations Committee hearings on Independent Offices Appropriations Act of 1955. continued needs of the Navy, this project of 200 units is still in use as defense housing-not low-rent housing. Since rents are charged in relation to the earnings of the Navy personnel, it is of course, natural that this project breaks even, and that no subsidy is required. NAREB confesses a lack of knowledge while attempting to use such facts as it has to attack public housing. Once again, here is negligence. Excluding the Sand Point project, 28 percent of the families in the Seattle low-rent projects are receiving public assistance. This does not include those receiving pensions or public benefits, but only those receiving public assistance. The oldest of the Seattle low-rent projects has tenants 41.2 percent of whom are receiving public assistance. It would be higher in the other projects except for the fact that they were formerly defense housing projects transferred to low-rent use only 2 years ago. The committee has been very kind in listening patiently to our views and our recital of certain facts gleaned from the annual reports of local housing authorities. For the past year we have endeavored through our local real-estate boards to obtain copies of many of these annual reports for our study. However, many housing authorities advise our boards either that they do not publish an annual report or, if they do, copies are not available. This year the Congress will give these local authorities $87 million. Next year it will be more, and more the year after, even if this requested expansion is rejected. We respectfuly urge therefore that you not only reject this proposed expansion of the public housing program but that you proceed with a thorough investigation, not of the public Housing Administration-which is nothing more than the conduit through which the subsidy is drained-but of the 811 local housing authorities who are receiving the huge subsidies, to demand an accounting of their stewardship, and to examine into the special privileged class of Government dependents they are nurturing. We are confident that then you will not want to add your name to those who espouse the continuation and expansion of the public housing program. Public Housing Administration in rebuttal of the above allegations has submitted the following facts: The Public Housing Administration and the local authorities operating lowrent projects throughout the country would welcome any investigation of the local authorities which Congress deems advisable. Such an impartial inquiry will reveal public housing as an essential program, administered in accordance with the statutory intent of the Congress to rehouse families in the lowest income group now living in substandard housing, in order to make possible the elimination of slum conditions throughout the Nation. Again, I wish to reiterate our sympathy with the goals sought by this committee goals which we have long accepted as our own and which we have transformed into action through our Build America Better program. The upgrading of homes through rehabilitation of existing housing, continued construction of homes in excess of family formations, the shift of millions of families every year to higher incomes, and a stepped-up program where required for the payment of rental allowances to needy families by local welfare agencies, far outweigh the arguments of 1930 depression vintage that we are a Nation of the poor and the ill-housed and that we need to breathe more life into this offspring of the depression-public housing. We appreciate your courtesy in listening to our arguments and we commend them to you for your sympathetic consideration. APPENDIX A PROPOSED AMENDMENT TO S. 1800 Re Federal insurance of urban renewal bonds Amend title I of the Housing Act of 1949, as amended, by adding the following new section at the end thereof: "SEC. The Administrator is authorized, upon such terms and conditions as he may prescribe, to guarantee the payment of principal and interest upon bonds, notes, and other obligations payable from special assessments (or special taxes in the nature of special assessments) imposed upon real estate and issued by municipalities, counties, local public agencies, or other public entities for the installation, construction or reconstruction of streets, utilities, parks, play grounds, and other improvements necessary for carying out the urban renewal objectives of this title in accordance with urban renewal plans in urban renewal areas as defined by section 110 (a). The Administrator shall fix a premium charge for any guaranty undertaken under this section which shall not exceed an amount equivalent to one-half of 1 per centum per annum of the amount of such bonds, notes or other obligations for the term thereof, which charge shall be payable at such time or times and in such manner as may be prescribed by the Administrator. Contracts for such guaranties shall be deemed to be contracts for loans within the purview of subsection 102 (e) but shall not be deemed to be contracts for financial aid within the meaning of sections 105 and 109." EXPLANATION OF PROPOSED AMENDMENT TO PROVIDE FOR FEDERAL INSURANCE OF LOCAL URBAN RENEWAL BONDS Federal loans and grants to aid urban renewal under title I of the Housing Act of 1949, as amended, can do scarcely more than scratch the surface in urban areas that need some curative action against deterioration. Cities clearly need a method of financing municipal urban renewal costs such as those for planning, public works, acquisition and removal of adverse land uses that does not depend upon transfers of money from the Federal Treasury to the cities. One of the first urban redevelopment actions to move from the planning stage into construction was the Lake Meadows project of a little more than 100 acres in Chicago. Acquisition of the site cost the city about $14 million. Reuse value of the site, when it was sold to an insurance company for redevelopment, was set at about $2 million. The resulting $12 million loss will be borne two-thirds by the Federal Government and one-third by the city of Chicago. Some idea of the limited potential of this process is gained from the fact that Chicago, according to its planning commission, has a total of some 25 square miles that need some kind of corrective treatment. If you apply a Federal cost of $8 million per 100 acres to the 25 square miles in Chicago which need attention, you arrive at a Federal cost for Chicago alone of more than $1 billion, or twice as much as Congress authorized in grants for all the cities of the Nation. After studying the possibilities under this formula, President Eisenhower's Advisory Committee on Housing reported to him that if we rely on demolition alone and continue at the present rate, it will take us 200 years to get rid of the slums. Now gaining support throughout the Nation is a proposal to fill this gap in municipal finance through the benefit assessment principle. Under this plan, a delineated urban reviewal area would also be a benefit assessment district. Under State enabling legislation, to be presented at 1955 legislative sessions, urban renewal costs would be assessed against owners of property in the area being benefited, with each property owner being given 10 years in which to pay his assessment. The city would launch the program by issuing neighborhood conservation benefit assessment bonds, secured by assessment liens, but not by the general faith and credit of the city. In order to provide ready marketability for such bonds at favorable interest rates, it is proposed that they be federally insured, and that authority to issue such insurance, on the basis of an insurance premium, be placed in the HHFA Administrator through an amendment to title I of the Housing Act of 1949 as amended. Assisting a municipality to obtain a favorable interest rate to be made available to renewal bonds will permit a more favorable interest rate to be made available to individual property owners on unpaid balances of their assessments over the 10-year period. The insurance premium of one-half of 1 percent of the amount of the bonds will provide an insurance fund out of which claims can be paid. APPENDIX B The following data is based on returns from 209 local real-estate boards. The communities mentioned are named in terms of the jurisdiction of the local real estate board and in some instances the designation is therefore in terms of an area. |