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Mr. DuLAURENCE. That was one of the problems we faced. We discovered that if we had to retain architectural help for each house it would cost the owner about $150.
Senator SPARKMAN. That is why I asked the question. I realize that.
Mr. DuLAURENCE. I had been talking on preferred modernizations from these enlarged photographs. I though perhaps these might be used for architectural drawings. We had a few pictures enlarged. Let me show you this one which was enlarged. I took this to an architect and explained the problem. I told him these people can't spend $150 for fees, yet they need architectural help. What can we accomplish from the picture at minimum expense? We though perhaps this work could be indicated by changing the pictures so the owners would know how to proceed.
Well, some architects have agreed to go along with this plan. Essentially the plan is as follows: You take a picture and have the picture blown up for $1.50. Then you take it to an architect. He will make a drawing off the picture indicating desired changes. This will cost owner about $15. The home owner will know what the architect suggests for him to do at moderate cost.
Senator SPARKMAN. I can see that the home owner would get a suggestion from that, but it has to go beyond that it seems to me.
Mr. DuLAURENCE. No. Good rehabilitation is primarily a question of good ideas, and knowing what to do with the house.
Senator SPARKMAN. You think the homeowner with the carpenter he hires can carry out the design?
Mr. DuLAURENCE. Yes, we believe he can, of course this sort of thing can be a do-it-yourself project too. A carpenter can follow this picture plan. Certainly the results would be better than some of the sort of things that are being done. This picture shows a treatment on 1 two-family house. We urge that something like that be done. If we don't do something all of this FHA title I money will be wasted. I think it was a wonderful thing for Congress to make this money so readily available for the people, but I do believe they have to be taught what to do with it.
Senator SPARKMAN. Do you not think that kind of a program is going to have to be organized voluntarily!
Mr. DuLAURENCE. Yes. It will be organized voluntarily, nevertheless if we put a few strings on this FHA title I money I think it would help get people started in the right direction on their rehabilitations.
Senator SPARKMAN. Thank you very much, Mr. DuLaurence. You have given us a very interesting presentation. I only regret we do not have more time. But your full statement will be carried in the record.
Mr. DuLAURENCE. Thank you very much.
STATEMENT OF HENRY DULAURENCE, CHAIRMAN, LEGISLATIVE COMMITTEE, NATIONAL
APARTMENT OWNERS ASSOCIATION, INC.
My name is Henry DuLaurence. I come from Cleveland, Ohio, and represent the National Apartment Owners Association. This association, the largest rental association in the country, is very appreciative of the privilege of being able to come before this committee to gives its views on the amendments proposed for the Federal Housing Act of 1954.
The National Apartment Owners Association represents owners who rent property for dwelling purposes. They are the bulk of our membership. Membership emphasis is placed on owners of rentals whether small homes or apartments. As such, we believe we are closer to the housing situation than any or the other real-estate groups. We are the investor and the ultimate consumer of much which these other groups sell, build or promote.
We have asked to appear before this committee in the hope that the combineil knowledge and experience of tens of thousands of owners may be helpful in answering some of the questions which will undoubtedly be raised during the consideration of the housing legislation by this committee. Large and smallwe operate housing. Housing is our business.
In reviewing the legislation now before this committee for its consideration, we see that it is largely concerned with changing only a part of the 1954 housing bill; namely, provisions limiting the use of public housing. The 1954 bill as written included certain restrictive provisions that public housing be used as part of urban renewal providing for family relocation. It was part of a large, wellconceived housing program. Public housing was not a means to an end but a tool for urgently needed slum elimination and urban renewal.
We believe that Congress acted very wisely indeed during its deliberations on the 1954 bill. We believe these limitations were constructive because they would promote and facilitate an urban renewal program which is recognized as one of our serious metropolitan problems. It is only with such provisions written specifically into the bill that we will be able to insure that public housing would be used for the greatest possible number of objectives which would include:
(1) Provide the cities with relocation facilities to insure their ability to participate in a renewal program.
(2) Provide the use of public housing for the people living on public relief and generally living in these renewal areas.
(3) Provide the use of public housing for the lowest economic group of our people.
(4) Give preference to veterans in the same economic classification, Slum clearance and urban renewal
The urban renewal program has run into several serious obstacles. Some of the most difficult to overcome are the provisions :
(1) That similar housing must be furnished the dislocated families before the program may proceed;
(2) That no city can initiate a project on less than a 4-acre parcel of land. Individually each of these provisions is excellent. Concurrently they make it exceedingly difficult to put a renewal plan into operation. First, because any family may decide that the living quarters offered were not similar or as good as or equal to the ones from which they are being relocated and refuse to move, and, secondly, one family refusing to move in any 4-acre plot of land can effectively stop any renewal program for that 4 acres unless it is offered living quarters which it considers acceptable.
Because of the involved mechanics, redtape and required detail, it is imperative that the largest possible area be processed at one time. This presents the further difficulty of evacuating simultaneously 500 to 1,000 or more families, many of whom may decide they are unable to find places to which to move. These families, if they take a negative attitude, would require local authorities to procure their housing for them. Quantity housing, if available, would simplify such a situation very materially. Contrariwise, if quantity housing is unavailable then evacuation of families may take a long time depending on each locality. Under such a situation we can very easily see that public housing, if it is made available to relocated citizens dispossessed from a renewal area, can be a very effective and helpful tool in an urban renewal program.
It is for this reason that we of the National Apartment Owners Association request that provisions restricting the use of public housing as a part of the urban renewal program as provided for by the Federal Housing Act of 1954 be kept in toto and not amended in any way whatsoever. Public housing authorities can cooperate or not, can accelerate or delay any local renewal program without any reservation or direction whatsoever. We believe that the urban renewal program in the 1954 Housing Act is good and that every available effort should be made to make it work. The restrictions set forth in the law are there because they are a required cog in the entire slum elimination machinery.
A GREAT NATIONAL EXPENSE
Public housing is a great financial burden on the country not only because of its original cost but its continuing operating expenses. Consequently, great care must be used to restrict its use to :
(1) Families of the lowest possible economic group;
(3) Localities needing housing for their urban renewal programs. Public housing is also a great expense to local communities where it is located. Public housing generally does not pay local taxes, but pays a sum in lieu of taxes, or 10 percent of the shelter rent. Since these payments vary from oneseventh to one-third of normal real-estate taxes paid by nonsubsidized citizens, it is obvious that only such people should be subsidized by both the Federal and local governments as really need it.
The cost of maintaining a family in public housing varies, of course, from family to family and from locality to locality. However, we can furnish some graphic approximate figures. Not too long ago the Louisville Chamber of Commerce made a comprehensive unbiased survey of the operation of public housing in its community. Because their findings are both complete and comparable, with minor variations, let us use these figures as examples. These are the findings for the average family based on a per capita comparison : Cost to city per year per family
$94. 20 Cost to school board per year per familyCost to Federal Government per year per family
Total cost of yearly subsidy per family.
256. 80 NOTE.-The loss of revenue to the State was not computed.
1 Source : Louisville Chamber of Commerce report, Public Housing in Louisville, January 1954.
NO INSURANCE THAT PUBLIC HOUSING WILL BE AVAILABLE FOR LOW-INCOME GROUPS
Public housing since its inception has been both endorsed and condoned on the theory that it was publicly subsidized housing for the lowest income grouppresumably unable to properly support itself. But insufficient restrictions exist both in the Federal law—and many of the local laws—to prevent abuses of this high-minded purpose.
The Federal restrictions themselves are variable and subject to various interpretations. These variable interpretations have a tendency to encourage the raising of local restrictions to higher income levels than generally considered proper for public housing. Families may and do live in public housing that have an income of up to $4,200 per year. And even that is not the entire story. The law and administrative practice provide a type of net income as distinguished from actual earnings. They provide that certain deductions can be made before you finally determine the permitted net income for occupancy. These are various and include union dues, social-security payments, pension contributions, specialized tools and clothing, certain medical deductions, working mother de ductions, $100 for minor children, minors' earnings, etc.
When you add all these deductions to the permitted net earnings, you find that a family could earn up to $5,000 per year and still be eligible to continue in public housing. However, let us use the $4,000 figure as permissive for public housing occupancy. Several questions immediately present themselves.
1. Is a family earning $4,000 really in the low income class or is it just average?
2. Can the State afford to subsidize a family in this economic class ?
3. How many other families are there in this country which have the right to ask for the same subsidized treatment by our Government?
4. How many families would then be helping the support how many other families on a national basis?
WHAT IS THE ECONOMIC RATING OF ELIGIBLE FAMILIES
1. The family eligible to live in public housing and earning $4,000 per year is in the middle third of the national economic scale. Forty-five percent of all American families earn this much or less.”
2. The State cannot afford to subsidize a family in this category because most of this 45 percent group pay taxes directly or indirectly to support the Federal Government. This is even truer in urban areas where virtually no one is exempt from local taxes either by direct payments or indirectly through rent payments.
3. Under present public housing restrictions no less than 10 million American families could be eligible for public housing on an economic basis. No less than 20 million families earn less than $4,000 per year. In a time of stress would they not have the right to ask for equal help and equal treatment?
4. If all these families insisted on their “moral” rights, then 30 million families would be helping to support 20 million families. The total cost per year would be stupendous, and over a period of time it would be more than any economy could bear without eventual bankruptcy.
5. There are more than 342 million nonfarm families earning $2,500 or less per year. These should have the benefit of and first claim on public housing. And this computation should be made on actual earnings, not after numerous deductions.
LIMITS SHOULD BE CUT DOWN IN PUBLIC HOUSING
Before any consideration is given to additional public housing per se, the earning requirements should be cut down so as to insure that this housing will be available not for the lower half but the lower tenth of our economic group. The public housing family earning $4,000 per year can pay 20 percent of that for shelter. This amounts to $800 per year or $67 per month. According to 1950 census the median rent in the United States was $38 per month.” Statistics show that this has increased approximately 30 percent since; therefore, your national monthly rent median is somewhere in the neighborhood of $51 per month. It is therefore obvious that families in this financial category can go out and rent homes in the open market. What then are they doing in public housing? Why then should they be subsidized both by the city and the Federal Government? Why isn't Public Housing filled with the $2,000 and under per year families?
MANY OVERINCOME FAMILIES EVEN UNDER PRESENT HIGH LIMITS
We have checked various public housing reports. These reports show that there are many overincome tenants in public housing even under the present abnormally high permissive earnings. Too much leeway is permitted public housing administrators. They are permitted up to 6 months' notice which stretches into a year. This wastes approximately $1,500 per family of public funds for tens of thousands of families who selfishly stay in their cheap quarters and prevent some deserving families from occupying them. It is very interesting to find in the Louisville Chamber of Commerce report that fully half of the tenants leaving public housing buy homes of their own. This fact in itself raises considerable question whether many of these people ever belonged in public housing.
PUBLIC SUBSISTENCE FAMILIES ON OUTSIDE LOOKING IN
In checking various cities we have found that only a fairly small proportion of families supported by public subsistence are housed in public housing. Since these families generally are in the lowest economic group, it would seem that they should have first preference in public housing. In these days of rising governmental costs, it is almost ludicrous to permit high-income and over-income public housing tenants to remain in subsidized housing while local governments pay higher rents for needy welfare families to private real-estate operators.
PUBLIC HOUSING NOT "PUBLIC"
Most governmental activities—and especially governmental records—are open to the public inspection. Most States now make it mandatory for welfare rolls 10 be open to responsible organizations wishing to check welfare applicants. But in public housing no procedure was set up to permit checking of the status of public housing tenants except by the Public Housing Authority. Only reports on overincome tenants are filed with proper authorities and such reports are filed on a case number basis; consequently, no way is available for even a spot check of tenants in Public Housing. As we have already shown, public housing is a serious matter taxwise to any city in which it is located. Records of tenancy income should be available to responsible civic groups for checking. At the present time, there is no way of checking except by the Administrator's own statement. Inasmuch as considerable latitude is granted in the interpretation of the income deductions permitted tenants, some way should be established to check not only the rent rolls, but the executive interpretations as well.
1 Department of Commerce, Survey of Current Business, March 1955. 2 U. S. Census reports.
HOUSING NEEDS STANDBY CONTROLS ?
We know that some consideration has been given to standby controls for prices, wages, and rents. We would like to suggest consideration be given to the tremendous amount of housing now available before any such move is made. Never before have we had as much housing per capita in this country. We understand that if standby controls are put into effect our industry probably must have them as well, nevertheless, we want to go on record that we believe our housing is overbuilt and that controls, rather than cure, would only create greater problems in an industry that has had more than its share in the last 12 years. It is the considered opinion of this association that rent control caused no small part of the slums and substandard area problems that we are now trying to correct. For the good of the Nation we should not have it happen again. Home improvement and modernization
PEOPLE NEED HELP UNDER FHA TITLE I
The usual problem of modernizing his home has been reversed for the average homeowner under FHA title I. Contrary to the general rule, now ample money is available for rehabilitation, but once procured the average householder does not know what to do with it.
Over 6 million loans have been made under FHA title I and yet, very little of it is evident in the large cities where it was to do the most good. There is evidence of rehabilitation and attempted modernization but most of it is of such poor quality that no fundamental improvement has resulted to the large cities.
It is apparent from the number of loans made under FHA title I that literally millions of people wish to modernize their property but unfortunately do not know how to redecorate, rehabilitate, or remodel a home. They frequently know what they like but almost invariably do not know how to achieve it. Consequently, a great deal of money is wasted through poor rehabilitation, poor planning, useless work, which, once the newness wears off, causes worse looking slums than we had before. We propose :
1. That every city certifying under section 220, hire or provide for the services of at least one architect, whose duty it will be :
(a) To furnish examples of modernized facades of the types of homes indigenous to the city; and
(6) To provide architectural advice to prospective rehabilitators at moderate cost. 2. Where cities do not provide architectural assistance to their citizens it be made a requirement under FHA title I that such assistance be procured by the borrower on a minimum basis. The importance of this cannot be overemphasized.
Urban renewal is one of the great internal problems of our metropolitan areas. Slums and substandard areas are leaving their mark on our American social structure. Were it not for our international problems certainly these debilitating forces would have received much more prominence and attention in the last few years.
A start was made under the Housing Act of 1949 to give cities both the tools and the money to help get rid of this social cancer found so frequently in our large metropolitan areas. Attempts were made under this law to eradicate this blight. As more and more studies were made it became obvious that additional