HOUSING LEGISLATION OF 1966

359

that adequate funds be made promptly available to implement the rent supplement program for disadvantaged people, enacted by the Housing and Urban Development Act of 1965.

The authorization of the 1965 act for urban renewal was inadequate to meet the needs of communities seeking to clear their slums and rejuvenate their blighted and deteriorated areas. We, therefore, urge that the capital grant authorizations be increased by $1 billion per year for a 3-year period.

America's urban problems are of foremost importance to the Nation's future welfare and growth. Now is the time to begin, with vision and courage, the necessary long-term effort that measures up to their complexity and their size. (Mr. Shishkin later supplied the following information for the committee :)

Hon. JOHN SPARKMAN,

AMERICAN FEDERATION OF LABOR & CONGRESS OF INDUSTRIAL ORGANIZATIONS, Washington, D.C., May 9, 1966.

Chairman, Housing Subcommittee, Senate Committee on Banking and Currency, New Senate Office Building, Washington, D.C.

DEAR SENATOR SPARKMAN: At the conclusion of my testimony before your subcommittee on April 22, I made the following statement: "Year after year, Federal housing programs have shown greater Federal receipts than expenditures. They have cost taxpayers nothing."

According to the figures furnished by the Department of Housing and Urban Development, on a cash budget basis, the excess of receipts from housing programs over expenditures of HUD (or HHFA), amounted to $23,200,000 in 1964 and $61,600,000 in 1965.

This is a notable fact which I hope the committee will take into account in weighing the merits of the housing legislation now before it. With many thanks and all good wishes, I am,

Sincerely yours,

BORIS SHISHKIN, Secretary, Housing Committee.

Senator SPARKMAN. The next witness is Miss Beverly Diamond of the National Council on the Aging.

Miss Diamond, will you come around, please?

Miss Diamond, we are glad to have you with us, you and your associates.

As I have told the others, your statement will be printed in full in the record. You proceed as you see fit.

STATEMENT OF BEVERLY DIAMOND, NATIONAL COUNCIL ON THE AGING; ACCOMPANIED BY GARSON MEYER AND NICK J. MILETI

Miss DIAMOND. Thank you, Mr. Chairman. I have with me Mr. Garson Meyer, who is president of the National Council on the Aging, an executive of Eastman Kodak, and Mr. Nick Mileti, who is vice president of Senior Consultants and a member of our housing committee.

We will not go through this whole statement. We will try to make incisive statements on specific aspects.

Consonant with the administration's proposal for a comprehensive and coordinated approach in developing new towns and in the demonstration cities' program, we would like to see a similar comprehensive and coordinated assault on housing problems of older persons who are most vulnerable to change, least capable of coping with such programs and have probably reached the zenith of their mobility. Yet the

m

housing conditions of the low-income elderly are among the n cal in the country.

I will ask Mr. Mileti to begin. Then Mr. Garson Meyer plete our brief presentation.

Mr. MILETI. Thank you, Beverly and Senators.

I want to say that I am president of Senior Consultants. set up the firm, I want to be sure that is clear in the record. ter.]

I appreciate being back here. I was here as managing di Westerly, which was the first 202 in Ohio and one of the fi country, which I am still running.

You might be interested to know it is still 100 percent ful have about 1,000 on our waiting list.

Barton Center is a community facility for older people run. We have about 700 members, and some very exciting t going on there, both social, recreational, cultural, spiritua forth.

Then we also work with nonprofit sponsors around the cou try to help them turn the dream of helping older people, larly in housing and related facilities, into reality.

So some of what we will just highlight here is based on experience.

We are representing here, the Housing Liaison Committ National Council on the Aging. As you know, this is the g is in a unique position to represent the older people. We ha sentatives from all over the country, both nonprofit sponso sponsors, architects, builders, civic, religious, and other group

This question of comprehensive and coordinated plans v also like to suggest be considered for older people, and we speaking on behalf of the American Association of Home Aging.

As Beverly said, our key concern is older people and the comprehensive and coordinated planning to resolve the critic age of suitable housing for them."

I won't go into any statistics about the acute need. You kr statistics better than I do-the large and increasing numbers people now well over 18 million, the fact that 5 million li suitable housing, that there are at our present rate of building eral programs less than 20,000 housing units per year be structed for older people, and that only 80,000 dwelling un now have been specially built for their use. At our preser will take over 100 years to meet the need. Yet I know that and particularly this committee, has given the greatest lead doing something about the acute shortage of suitable housing people.

We know that older people are least able to wait-we see firing line every day. We are deeply concerned that these pe never during their lifetime have the kind of housing appro their need, nor are we preparing in advance for the constant in their numbers. Moreover, all of our present resources wil gin to meet the staggering need.

HOUSING LEGISLATION OF 1966

CREATION OF A NEW PROGRAM FOR MULTITYPE FACILITIES

361

I am working with a group in Boston right now who wish to build independent living facilities utilizing the 202 direct loan program, a nursing care home for which they would have to come under the section 232, a residence club type of housing with central dining facilities under section 231, a community facility which would come under the present grant program and perhaps a terminal care center. This group will have to file some of these applications in Boston, some in New York; some rates will be 3 percent, some will be 6 percent, some will be in between; some are grants, some are loans, and so forth.

Under these circumstances, confusion, costly delays, discouraging inconsistencies in processing, are bound to result. What is greatly needed is legislation that will allow a single takeout mortgage and single filing of these applications so they could be handled on a coordinated basis more expeditiously with more consistent criteria.

In addition, the most experienced and knowledgeable underwriters can be effectively deployed with maximum saving in time and in cost to the sponsor and to the older tenant.

See recommendation No. 6. Single takeout mortgage for multiple housing for the aging.

AID TO NONPROFIT NURSING CARE HOMES

In regard to nursing care homes, we would like to recommend strong endorsement of Senator Harrison Williams' bill S. 2520.

Under present legislation the nonprofit sponsor is in fact handicapped. Concerned as he is with the total person and his total environment, accountable to the community through a bona fide board, the nonprofit sponsor will give a needed service even if he has to appeal to the community for funds to do so. A proprietory owner could not safely offer a service if rendering this service would price him out

of the market.

The amendment which allows nonprofit groups to utilize section 232 was a step in the right direction, but with only 20-year terms and a 90 percent replacement cost a civic or religious group finds it difficult to build under its provisions.

We believe that if, as Senator Williams proposes, the nonprofit sponsors were permited the 3 percent interest rate and the 100 percent. loan for the 50-year period for creating nursing care homes, they would move forward to build the kind of nursing care facility which older people need which communities accept.

With the advent of hospitalization and medical care, increase in nonprofit nursing care homes will be needed, to relieve the overcrowding in hospitals and to serve those older people who long ago should have been served but were unable to afford such care.

See recommendation No. 7. Aid to nonprofit nursing care homes.

REVOLVING FUND FOR INTIAL WORKING CAPITAL GRANTS

Many nonprofit sponsors who can and want to create housing for low-income older people and who could provide the necesary stability and continuity for such housing are unable to start because of lack

of "seed money." They search their souls, many of them to 10 years, as to whether or not they are able to get invo costly effort of sponsoring such housing. They don't s souls on whether they want to develop the housing, but light of the many different needs which the community loc to meet, they can come up with a thousands of dollars bot project off the ground and to hold necessary moneys in e required under present regulations. They must make a ment as to whether they can afford to get involved in housing for older people in putting their know-how, limited funds to use for this purpose or to meet other de complex and with quicker results.

Once they do decide to put their reputations on the line considerable time and effort into creating social housing sary services they should not have to freeze in their alrea philanthropic dollars as now required. Such money, they put to immediate use more effectively for the very service people that their community lacks.

We believe, therefore, that a revolving fund for "see though a minor item in an amortization program, should b as part of the loan or mortgage. We hope that this "se could include such items as movable equipment and fixtur See recommendation No. 9. National Council on the Ag ment in full.

NEED FOR NEW BELOW MARKET RATE PROGRAM TO ACCELERATE I OF HOUSING

Section 221(d) (3) below market rate cannot be used exclusively for housing for older people. The present market rate program bearing 3 percent interest has many provisions which help keep building costs and rentals down fore could be of benefit to the elderly. If the 221 (d) (3) bel rate could, in effect, be applied to develop special housi aging, this would create an additional vital tool to help clo between elderly housing needs and supply.

In short, if there were a 231 below market rate progra the same favorable provisions of the present 221(d) (3) bel rate program, it would further stimulate additional and and limited dividend sponsors to serve the low-income eld

Moreover, with a single agency responsible for section below market rate and 232, favorably approved, sponsors able to develop multitype facilities in single stages and yet bility to plan in advance to meet community needs.

See recommendation No. 8. Creation of new program for facilities.

EXTENDING 3 PERCENT INTEREST RATE TO ALREADY BUILT DI FACILITIES

The next specific recommendation on housing relates to the 3 percent interest rate now available for new direct loa projects. Senator Tydings has proposed legislation to

HOUSING LEGISLATION OF 1966

363

The people who started out in this program some years ago have facilities going which are almost 3 years old. Many of the older people living in these facilities, however, pay over 40 percent of their annual income for rent. If the present 3 percent rate were extended to refinance the existing facilities, the rents of these older people could be lowered by from $5 to $10 per apartment per month.

When we consider that the average income for a couple in these facilities is roughly $2,600 a year-an amount which I would hate to live on this reduction of rent to the older person can mean a great deal.

The residents in these facilities and the pioneers who had the vision and the guts to get into this program when the regulations were being decided-in the fact some of these pioneers helped to improve these regulations), are being penalized.

We therefore recommend that all existing direct loan facilities be given the 3 percent interest rate there are approximately 78-to permit reduction of rent for older tenants and thus give these elderly the same advantage as older persons who will move into the new 202 facilities.

COMMUNITY FACILITIES' GRANTS

The present legislation authorizing matching grants for community facilities for all age groups to local public agencies was a good beginning. However, experience shows that older people utilize senior centers more fully and with greater security. Senior centers serving older tenants and the community are the heartbeat of the housing facility for older persons. Centers are the focal point where services are given, essential opportunities are available, the older person can pursue his interests and serve the community itself.

See recommendation No. 12. Community facilities' grants.

If this recommendation were to become effective, it would save the older person approximately $10 an apartment per month. Moreover, philanthropic dollars which are now locked in financing such facilities can be utilized for a variety of needed community services.

NEED FOR RENT SUPPLEMENT PROGRAMS FOR SEVERAL LOW-INCOME GROUPS OF ELDERLY IS CRUCIAL

One of the most important measures which can enable more older people of low incomes to have suitable housing, I am discussing last, in order to give it major focus. I am referring to the program of rent supplements which is of current concern to many people.

The National Council on the Aging's Housing Liaison Committee believes that rent supplements properly extended to the low-income elderly will help a larger number of the older poor obtain suitable iving quarters than otherwise possible. This would happen if the rent supplements were made applicable to all nonprofit and limited dividend housing, both previously and presently built under 202, 231, and 221(d) (3), and extended to housing for the elderly under the Farmers Home Administration of the Department of Agriculture, And if the two severe limitations-local government approval and workable programs where none now exists-were to be eliminated.