existing hotel properties. Congress might want to consider requiring that such properties be located only in areas zoned primarily for residential purposes. Or, it could be provided that only a certain percentage of the units in such giant structures could be designed for efficiency apartments which are easily convertible. Thus you could preserve the role of providing permanent housing, at the same time not permitting the construction of an apartment building designed for early conversion to hotel purposes. Third, normally, I believe it is the practice to extend for only 1 or 2 years the authorization for such bureaus as the Housing and Home Finance Agency. I notice that your committee is being urged this year to extend certain parts of the law for a period as long as 5 years. The AHA certainly does not want to object to this proposal, if there are compelling reasons why it should be done. But we do definitely feel that the hotel industry would have been in dire straits, if there had been no opportunity for us to point to the inequities which had inadvertently grown up within the Agency, as we did last year. Conceivably, other segments of the business economy in America might likewise encounter unexpected developments, from time to time, which they would need to bring to the attention of this committee. And if you were operating under a 5-year extension of authority, there might be grave pressures against holding hearings at regular intervals of 1 or 2 years. So, unless there are persuasive reasons for this long a period of extension, we would urge that you designate a somewhat shorter span of time. Fourth, Administrator Cole also discussed, at some length, a proposal to vest in the Department of Defense the responsibility for financing housing which might be constructed on or near military bases. And Senator Capehart has also come forward with an interesting proposal regarding construction which would be designed for the military. May we respectfully express the hope that some section comparable to 513 in the 1954 Housing Act be incorporated into any new legislation passed by this Congress dealing with the garden-type apartment developments built for the housing of military personnel. The uncertainty of the period of tenure of Armed Forces at any site does make it doubly difficult to finance an adequate supply of satisfactory housing. But there are numerous instances today where these garden-type apartments are serving as motels and motor courts, catering to the general public, because the services deactivated a military post, leaving those properties isolated. So we do appeal for some safeguards against such abuses. Fifth, the present housing legislation provides for Federal participation, with communities, in the redevelopment of blighted areas. A Federal grant is available from the Housing and Home Finance Agency with which to purchase the right-of-way, and to help raze all undesirable structures in the areas. Then the city is normally responsible for providing the new streets, sewers and gutters, schools, and so forth, to fit into the new concept. It is interesting to observe that at least three places known to us contemplate the construction of a hotel as one of the facilities which would be incorporated into the final plan for redevelopment. There seems to be no prohibition in the present language of the act which would prevent such a move. Under multifamily housing, the FHA will not loan money for the construction of a hotel building, but seemingly, under the broader 62736-55-26 more than the extra interest cost here of the policy proposed over direct appropriations does anyone have the figures on what would be saved on the men who would remain in the service, which would eliminate this expense involved in the great turnover that you have with the additional training of men, if you had proper housing and places for them to live? Is that not a terrific sum? Secretary FLOETE. I think some of the men here can speak better on that than I. Secretary GATES. The figure we agree would be enormous. Secretary DOUGLAS. We have tried to arrive at a figure various times as to what might be saved by an increased rate of reenlistment. We know that is a tremendously important factor, not only to keep the trained men to operate the Air Force, but also from an economic point of view. You can get all different kinds of figures as to the cost of retraining a new enlistee. We worked up pretty careful figures a year ago, which included GI benefits cost to the Government, when we were practically providing a subsidy to get people out of the service. We came up with the figure at that time that about a 1 percent increase in the reenlistment rate of airmen would save us $20 million. Senator CAPEHART. $20 million a year? Secretary DOUGLAS. Yes, $20 million a year. Secretary DOUGLAS. I could not show under the existing GI rights situation quite as high a figure, but that is very conservative as to training costs. If you take the cost of about four, five or six thousand dollars per man, which I think is extremely conservative, you come up with a figure of between $100 million and $200 million for a 10 percent change in the enlistment rate. Senator CAPEHART. Is it or is it not a fact that one of the most troublesome problems that these married men have is housing, finding places for their families to live? Also that they become more discouraged over that probably than any other feature? Secretary DOUGLAS. There is no question about that. I think the Air Force feels it very keenly because of the increasing pressures we are under to put installations away from communities that can readily support additional military personnel. Senator CAPEHART. So you might save a considerable sum of money if you had proper housing due to the fact that the men would stay in the service much longer, or perhaps indefinitely? Secretary DOUGLAS. There is a very large cash savings that accrues just as soon as you are able to make the career more attractive to both airmen and officers. Senator PAYNE. I am still rather interested in-I do not want to slow this up any, but I am still rather interested in having a little more information as to why with specific figures, if you have them, or the approximate figures-as to why it is less costly to the Government under the appropriated housing program by itself than it would be under one of the others, such as S. 1501 or Wherry. Secretary FLOETE. I think it boils down to just two pretty simple factors. One is, presumably we would borrow money cheaper under a bond issue for appropriated fund housing, and we have assumed that might be 3 percent, than you will under another method. Now on the Wherry Act, for instance, I think they are paying 44 percent now for : Senator SPARKMAN. You believe that we ought to get back to a workable and a more practical public housing program? You believe that we ought to have, shall I say, a vigorous slum clearance program. Mr. WEITZER. Yes. Senator SPARKMAN. And you believe we ought to give careful consideration to the provision for adequate housing for military personnel? You mentioned specially those three things. Mr. WEITZER. That is right. I want to touch on one other thing. Slum clearance and urban renewal Senator SPARKMAN. Of course, may I say in connection with slum clearance, I suppose you also would go along with the urban-renewal program. Mr. WEITZER. Yes. I have no quarrel with the stated objectives of the legislation that was recommended by this committee and put through the Congress last year. What I am thinking about is the fact that in this process of passing through Senator SPARKMAN. You are thinking about the way it came back finally from Congress? Mr. WEITZER. What I am talking about is that that job needs to be done. We want to clear up the slums. We want to prevent the creation of more slums. I think the first step in that is to take care of the people that are living in those areas. Now until you make a place for them, according to the legislation of the past you can't have an urban redevelopment program. That is an inherent factor in getting a redevelopment program approved by the Housing and Home Finance Agency. Until you get that you can't get public housing, and you have got an arrangement there where the thing just can't move, can't get off the ground. I think if you will come back to the principles of the Housing Act of 1949, and bring that up to date in accordance with the points I have just made, that you will have legislation that will enable you to get rid of the slums and take care of the people that are living there in a little bit better fashion. Cooperative housing One other thing I want to touch on is this matter of cooperative housing. We feel for veterans, particularly veterans living in cities, in urban communities, that the cooperative housing along the lines that the builders use and at one time had before the committee, Senator, is really a very essential thing, because when I read the advertisements of these apartments that are going up around Washington, when I heard in this informal conference that we had the other day in New York State, with the help of the State aid and so on, you get to the point where you can rent an apartment for $22 a room, I am wondering where a man who makes only $70 or $80 a week and has 3 or 4 kids is going to live if he has to live in New York City. Not everybody can move out to some nice semirural community in Indiana where you can probably get housing for a lot less. Senator CAPEHART. That's right, the best place to live is in Indiana. Mr. WEITZER. A lot of people have to live in the cities; whether it's New York or Chicago or Milwaukee or San Francisco or Los Angeles, I get the same story, that you can't live in an apartment unless you are making $150 or $200 a week, and we are in no position to say that any large substantial part of the population is going to get into that category. ested is one that you have before this committee, Senator, and that is for military housing, which as a representative of the veterans' organization I am seriously interested in because the cost of the armed services budget, as you know, runs into tens of billions of dollars, and one of the things that runs that cost up is the cost of recruiting new men all the time. Senator CAPEHART. Mr. Chairman-would you yield? Mr. WEITZER. Certainly. Senator CAPEHART. Would you agree with me that at the end of World War II there was a great need for housing for soldiers returning, being discharged, and that the Congress has done a pretty good job in that respect? I mean we have supplied several million houses. Isn't there a great need at the moment for housing of the boys that are still in the service and those that are being called back into the service at the moment? Mr. WEITZER. Well, that is exactly why I say Senator CAPEHART. Isn't the need as great today for that as it was in 1945 or 1946 for housing for the boys that were getting out? Mr. WEITZER. Well, nobody ever contemplated at that time, of course, that we would have to go back to Armed Forces of around 3 million men. When the Wherry bill was passed, frankly, I wasn't too enthusiastic about it. Maybe the time hasn't come to uncover what has gone on under that bill, but there may be some windfalls lurking in the corners on that one; and I haven't read your bill too carefully, but I hope that you provided for the kind of protection on that score that is sadly needed. Senator CAPEHART. There can't be any windfalls under S. 1501 for the simple reason that the housing is to be built by the lowest bidder and the tenants established at that point will at that point take over control and own it. Mr. WEITZER. As I say, I don't want to pass that up. I don't want to confine myself entirely to a harangue about the evils and the shortcomings of the legislation that went through the Congress this year, but I think it points to the fact that in my opinion you need to go back to the Housing Act of 1949, taking into consideration some of the things that have been learned since that time. But that Housing Act within the limits that were imposed upon it by the Appropriations Committee tackled the basic problem. If you are going to get rid of slums, if you are going to cure blight, you can raze the slums, but you can't raze the people that are living in them. Senator CAPEHART. You are talking about the 500,000 units that will be built at the rate of 135,000 a year? Mr. WEITZER. That is right, up or down, according to the economic situation. Senator CAPEHART. Called the Wagner-Taft-Ellender Act? Mr. WEITZER. Taft-Ellender-Wagner Act originally, and nowadays it seems to me that some people are inclined to forget one of the most constructive things that Senator Taft ever did during his career in the Senate, I think, which was his study, very arduous, serious, complete, and thorough study of the housing problem. Senator SPARKMAN. Let me see now if I can summarize your views from what you have said, and as I understand it you want to present a prepared statement for inclusion. Mr. WEITZER. That is right. Senator SPARKMAN. May I interject a thought there? It seems to me as far as the cost of the money is concerned, assuming there is good management there will be no difference in either plan. Senator PAYNE. That is right. Senator SPARKMAN. Mr. Secretary, there is a very serious question in my mind, however, and it is an old one which has been there for a long time. It has been in the minds of members of this committee for several years with reference to housing built by the services themselves by the direct-appropriation method. Senator Maybank, who was chairman of this committee and also was a member of the Subcommittee on Appropriations of the Armed Forces, used to raise this question quite frequently. That is, it seems that housing built by the services is simply too costly for the individual units. The planning and designing has always seemed to be too expensive. It seems to me if you could satisfy us with reference to that cost part of the program, then my own personal view is the direct appropriation method would be the most efficient and the more practical. But that question has been raised many, many times; that is, that the cost of housing built by the services themselves is excessive. I wonder if you would comment on that? Secretary FLOETE. Well, sir, you see very few houses were built directly by the services in the last 5 or 6 years. I believe there were only 800 built in the United States prior to the last year over the last 4 or 5 years because of the Wherry Act taking up the slack in there at that time. So we started out last year without a very good experience on the cost. We did not have very many places that we could point to. Under the appropriation made last year, there have not been too many contracts let. However, they are running pretty close to other civilian experiences. In other words, in the neighborhood of $11 a square foot. Senator SPARKMAN. This is a question that Senator Payne raised the other day: Would that include the costs that a civilian builder would have to meet, that is, the cost of the land and the preparation of the land and the extension of utilities, grading, paving of streets, and all of those things that a civilian builder would have to include? Secretary FLOETE. I think that the Army figures are tending to show that, including those things, it would cost about $11. I think that is a pretty optimistic figure. I think we ought to take $12 or $12.50. But I think that compares with civilian experience pretty well. The dollar cost, you see, is a little larger than it has been under Wherry because the size of the units we are trying to build are more comparable with what they really need. Under the Wherry Act, they got only an average of about 900 square feet, and that is pretty small for a married man with 2 or 3 children. We are trying to build these houses Senator SARKMAN. You know, Mr. Secretary, I know a little about that Wherry housing because my daughter has been living in one of them at a naval base. I have visited in their quarters a good many times. I certainly think what you have said is true with reference to that. Secretary FLOETE. We are trying to get 1,080 square feet for enlisted men, and I do not think that is too much. Senator SPARKMAN. One thousand and eighty feet? |