Research and demonstration are needed in the following areas:

1. For establishing and making available to all sponsors of ho propriate criteria for market feasibility analyses for older people. Study and analysis of the total need and effective demand for designed housing—the preference of older people for various types of and related facilities; the patterns of migration and factors effectin of housing made by older people.

2. Grants for planning housing for older people as such planning to workable programs, urban renewal, area redevelopment, new ci towns.

3. Study of comparative costs for building different types of for site development, and staff, in various parts of the country.

4. Study of services where these can be commanded from commu sources in contrast with those which must be provided by the because few resources exist.

5. Study and analysis of the effect of convenient transporta desirability of housing by older people.

Funds for training

Funds for training programs for key personnel and supportive services elderly are vitally needed. Experience has shown that efficient and management for elderly facilities require special knowledge, skills, a petence.

While experience in management of institutions and hotels is of som such experience is hardly enough if older persons needs are to be und their interests served, and a tone of well-being, of involvement with livin tained.

Recommendation No. 13.-We respectfully recommend, therefor Congress consider allocating funds to meet the increasingly acute r training programs, research, demonstration, and for key personnel, ing for older people.

Extending 3-percent interest rate to already built direct loan facilitie section 202

While we have emphasized the need for older tenants to pay no more percent of their income for rent, many living in facilities already buil 202 and 231 pay considerably higher percentage of their annual income f ing. At least for those older people living in facilities already cons under section 202, could have their rents reduced by from $5 to $10 per by reduction of the interest rate to the present 3 percent. Several o facilities pay as high as 3% percent interest. Yet the sponsors of these f were the pioneers who saw the need and acted upon it.

It is difficult to understand why these older residents must continue t higher percentage of their incomes for rents, probably for the rest of the because this housing was built first.

Recommendation No. 14.-We recommend, therefore, that Senator D. Tydings' bill (S. 2652) should be supported, and that 3-percent rate applied to existing 202 facilities.

We have suggested several approaches to strengthen and expand existi grams and proposed some new aids, with a hope that the necessary com sive assault on the housing problems of our Nation's low-income older will be dealt with not only more effectively and swiftly, but with financ more commensurate with the size of the problems. These critical condit older persons who least can afford to wait and are most vulnerable to must be tackled, or our seething changing cities will not permit our elde stability and security they need.

FROM THE STATEMENT BEFORE THE SENATE SUBCOMMITTEE ON HOUSIN Rent supplements and public housing

The Public Housing Administration has made remarkable progress in ing appropriate housing for elderly people with marginal incomes. H have a proved weapon in the fight against poverty, especially among the The need for expansion in this program greatly exceeds the number re for the next 4 years. Despite the fact that 50 percent of allocations for housing during the last year were made for older people, the pent-up n such housing is great.

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The median rent for public housing for the elderly is $33 per month, and the average income for these tenants is $1,400 per year. Obviously many thousands of elderly people have their best, if not their only, chance at good and suitable housing through the public housing program. While public housing has shown a general flexibility and in many instances accept older families with incomes of over $3,000, yet, for each such family it accepts, it must deny housing to others with little or no income who tend to live in the most dilapidated dwellings or in areas sheduled for redevelopment.

It is distressing to note that because of the shortage of housing, necessary priorities in the screening of applicants, and the financial requirements of the public housing program, many older people cannot qualify for this housing. Even with annual contributions to meet debt service, payments in lieu of taxes, and the subsidy of $120 per year for the elderly, many older people cannot afford to pay the required rent-even in public housing-without additional subsidy from some source. A letter from an older woman to the national council will illustrate this problem. She writes, in part:

"I am 67 years old. I get $62 per month from social security. That is all I have. Out of this I must pay $27 per month for rent. I live in a terrible place, and it is hard to manage all around. I was just in the hospital with pneumonia. My doctor says I have to move or I might get sick again. He told me I ought to get into those nice puplic housing apartments. When I saw the puplic housing people they told me I did not have enough money to carry the rent and would have to go to welfare for the difference. After working so hard all my life I do not want to spend the rest of my days on welfare. The public health nurse came to see me. She said even then she did not think I would get help from welfare because I had as much money as they allowed their people. She said she would check. She found that the most welfare allows any older person is $63 per month in cash. They would not take me on for just the $1 a month difference. I do not know what to do."

In short, like so many, this lady's income is too low for public housing and just too high for an old-age assistance grant in her State. (In nearly half of the States, old-age assistance cash grants range only from $42 to $75 per month.)

The plight of the older people who cannot meet the rent requirements in public housing, who otherwise would not need to apply for public welfare for partial rent subsidy, could be alleviated if Congress would increase the present subsidy of $120 per year to an amount more adequate to take care of every older person with low income.

Recommendation No. 1.—Public Housing Administration should be enabled to expand its construction of special housing for older people, and should be permitted an increase over the present subsidy of $120 per year per older family, to an amount more adequate to take care of every older person with low income.

Senator SPARKMAN. Thank you very much, Miss Diamond, and you gentlemen. It was a very good presentation. It is a program that we are certainly greatly interested in.

The next witness is Mr. Robert W. Kean, Jr., first vice president, National Water Company Conference, accompanied by Jim M. Milligan, administrative director, and Mr. Alvin Friedman, counsel. Will you gentlemen come around, please.

Go right ahead, Mr. Kean.

STATEMENT OF ROBERT W. KEAN, JR., FIRST VICE PRESIDENT, NATIONAL WATER COMPANY CONFERENCE; ACCOMPANIED BY JAMES M. MILLIGAN, ADMINISTRATIVE DIRECTOR; AND ALVIN FRIEDMAN, COUNSEL

Mr. KEAN. Mr. Chairman, I have with me Mr. James Milligan, the administrative director of our conference, and Mr. Alvin Friedman representing his partner, Mr. Feldman, who could not be with us today.

Our written materials are already filed, so I will try to be b Senator SPARKMAN. Was your father Congressman Bob K Mr. KEAN. Yes sir. I saw him this morning. He asked me you his warmest regards.

Senator SPARKMAN. Same to him.

Mr. KEAN. Thank you.

I am president of the Elizabethtown Water Co. in Elizabet) We are a shareholder-owned, investor-owned public utility s water to more than 700,000 people in 40 communities in north New Jersey.

I am also privileged to serve as the first vice president, di officer, of this national water conference which is our national a tion of similar water utilities which we estimate provide water to more than 20 million Americans.

You gentlemen have before you S. 2977, a bill which offers a ments to the Housing and Urban Development Act of 1965 organization has no argument with this bill other than one sub which discriminates clearly against, we believe, and in effect leg out, any participation by our type of utility.

This subsection is section 204 (c) (3), which includes the word

regarding which he

meaning the Secretary

receives assurances, satisfactory to him, with respect to eventual public ship of the system and with respect to the conditions and terms of a or transfer.

This language originally appeared also in the Housing and Development Act of 1965, section 1005, was recognized by this H Committee at that time, and was eliminated.

We are merely requesting here that the same language be elin at this time.

Now, I think I should say a word about the record of investor water companies particularly in the

Senator SPARKMAN. Let me ask you, Mr. Kean: You are ob to a provision in the bill this year. What about the provision w into the law last year? Were you satisfied with that?

Mr. KEAN. Yes, sir; we were.

Senator SPARKMAN. I do not know how the others feel about I rather feel that we will follow last year's precedent if we legi the subject again this year.

Mr. KEAN. That is exactly what we are attempting to acco sir.

Senator SPARKMAN. I should think we would have uniform We felt last year that the contention you are making now was one. The Committee made the change which became law. feel quite certain that we will follow the same pattern this y Mr. KEAN. Thank you, sir.

Could I ask Mr. Friedman to say a word on this subject, Senator SPARKMAN. Yes indeed.

Mr. FRIEDMAN. Thank you very much, Senator. I would just explain briefly that our concern this year was occasioned understanding from several people in the Department that the

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going to press quite hard for this kind of change which is reflected in the present (c)(3), and as a result we thought that we should make a determined effort, including an appearance here.

Senator SPARKMAN. I fully agree with you. You should. We are glad you came. And I think you are right.

Of course, I do not control the whole committee.

Mr. FRIEDMAN. Thank you very much.

Mr. KEAN. Sir, I will terminate my remarks and quit while I am ahead, if I may. [Laughter.]

Senator SPARKMAN. You know, there is an old saying among lawyers that when the judge is on your side, quit talking.

Mr. FRIEDMAN. Absolutely.

Senator SPARKMAN. However, I am not the judge. I'm just one of the jury.

(The complete prepared statement of Mr. Kean follows:)

STATEMENT OF ROBERT W. KEAN, JR., FIRST VICE PRESIDENT, NATIONAL WATER COMPANY CONFERENCE

Mr. Chairman and distinguished members of this committee, my name is Robert W. Kean, Jr. I am president of Elizabethtown Water Co. in Elizabeth, N.J., an investor-owned utility which serves water to more than 700,000 people in the northern New Jersey metropolitan complex. I am also priviliged to serve as first vice president of the National Water Company Conference, a national association of investor-owned, regulated water utilities. Some 3,500 of these utilities serve water to more than 20 million Americans in 4,500 communities.

You gentlemen have before you S. 2977, a bill which offers amendments to the Housing and Urban Development Act of 1965. I wish to state our organization's opposition to section 204 (c)(3) of this bill on the grounds it clearly discriminates against investor-owned water utilities.

This subsection reads:

"(c) if it is necessary to develop a new system and the Secretary determines that public ownership of such a system is not feasible, an adequate privately or cooperatively owned new system (1) which he finds consistent with other existing or prospective systems within the area; (2) which will be regulated, during the period of such ownership, in a manner acceptable to him with respect to user rates and charges, capital structure, methods of operation, and rate of return; and (3) regarding which he receives assurances, satisfactory to him, with respect to eventual public ownership of the system and with respect to the conditions and terms of any sale or transfer."

As proposed, gentlemen, section 204 (c) (3) would legislate the exclusion of taxpaying, investor-owned water systems from any federally supported program authorized by this bill to develop water and sewerage facilities for "new communitites." In view of the fact that these systems have a long and excellent history of community service, including many FHA-financed housing developments, we find it difficult to believe that this apparent mandate is the intent or purpose of this committee, this Congress, or this administration.

Everyone in this room is fully aware of the drought which occurred this past year in several Northeastern States. Throughout the area, investor-owned water systems maintained an outstanding service record. A survey by the U.S. Public Health Service disclosed that in New York State, during the past 20 months, there were about 50 instances of water use restriction. Only five of these concerned investor-owned water companies. In Massachusetts, the only two towns in all of Norfolk County which were not restricted are served by investor-owned systems. Of Massachusetts' 317 water systems, 178 were subject to some restriction. Only four affected companies were investor-owned.

Gentlemen, the discriminatory language in section 204 (c) came before you ast year, when you were considering the Housing and Urban Development Act of 1965. At that time, you quickly recognized this discrimination, and struck it from the bill (originally sec. 1009, which became sec. 1005 of the statute). The Senate-House conference committee agreed to your version.

The investor-owned water supply industry has not undertaken opp section 204 (c) without first seeking to learn why the Department o and Urban Development included such discriminatory language in S. far as we have been able to learn, the Department has only two fe underlie its position, neither of which has any application to inves water utilities.

First, the Department believes that some unscrupulous developers communities" might install their own privately owned systems and sell them to the communities at inflated prices.

Second, the Department is concerned that private water compani "new communities" might go unregulated and charge inordinately I for water service.

Clearly, neither concern has validity for a new water system that owned by an investor-owned company. These companies have beer operating water systems throughout the Nation for over 100 years. not "speculators" who merely seek a quick profit; rather, their reven from the operation of water systems on a long-term basis. As regard partment's second concern: investor-owned water companies are reg public agencies within the State or locality of their operation, and prepared to responsibly accept reasonable regulation by the "new com that may be developed if S. 2977 becomes law.

Gentlemen, in closing, may I state our belief that it should not be of legislation to "weed out" unscrupulous developers by automatically nating against all of those legitimate businessmen engaged in supply to the American people. If such a "weeding out" process is necessary, be conducted by the Department which would administer the statuWe urge that section 204 (c) of S. 2977 be amended to read exactly as section 1005 of the Housing and Urban Development Act of 1965. done, it will reaffirm your position, stated so effectively last year, that and the administration welcome the continuing cooperation of inves water service companies in a mutual effort to promote our Nation's gr Thank you, gentlemen.

Senator SPARKMAN. Fine. Thank you, gentlemen.

The next witness is Prof. Manuel Gottlieb, professor of ecUniversity of Wisconsin.

I was waiting for Senator Proxmire, but he had to leave t a meeting; but he is coming back from that meeting.

STATEMENT OF MANUEL GOTTLIEB, PROFESSOR OF ECO
UNIVERSITY OF WISCONSIN

Mr. GOTTLIEB. I should apologize for preparing testimony a brief. I did not understand that a brief would be required. my deliberations and studies have been extensive, I did not p brief.

I prepared instead an outline of the testimony with a li exhibits. I will perhaps later supplement the testimony by E tion of a more extensive argument. I believe that an oral p tion will be more refreshing for you.

Senator SPARK MAN. Let me say this: It is perfectly sati for you to make an oral presentation since you do not have it However, if you want to make a more extensive presentation want to prepare it in a different form, we will be very glad to submit it to us provided you submit it within time.

Of course, we will have to close the record about the 7th o May I would say. If you have it in by that time, it will be acc Mr. GOTTLIEB. Very good.

Senator SPARKMAN. All right.