determination of need was administratively so vast that the mind of man could not cope with it. Do you have any comment on that? Senator JAVITS. Yes. I have two comments on that, Senator Clark. One is that in the public housing program we are applying very much the same criteria, and we have applied them in the Federal establishment first in the 1930's and then again in the Housing Act of 1949 and since that time. Senator CLARK. Pretty much first-come, first-served, is it not? Senator JAVITS. That is right. We have argued these very questions, and we have changed the rules on occasion. We do not seem to have run afoul of any impossible administrative problems. Secondly, New York is more than just a State. New York is a Nation in microcosm; 17 million people is no State in the sense in which it is used in this argument, with the same problems of allocation to localities and the same problem of surveys and findings most successfully met. So for both those reasons, our experience in public housing, with many of the same criteria and many of the same problems and decisions to be made, and the experience New York-call it a superstate, if you will, in terms of its size and the number of people involved and the number of localities involved-both I think refute the argument of the agency that this is some administratively chaotic enterprise. Senator CLARK. I think people sometimes tend to forget that New York has a pretty large rural population, including many rural counties. As you say, it does represent a microcosm of the Nation. There are very few conditions elsewhere in the country which you cannot find somewhere in New York State. Is that not true? Senator JAVITS. Exactly right. Mr. Chairman, the illusion ns that New York City dominates our State. That is not true. New York City today is just about a little less than half the State in terms of population. We are the third largest State in dairying in the United States. We lead in a number of other crops. We have 62 counties-57 outside New York City-an enormous rural population, with hundreds of thousands of people engaged directly in farming. We have run up against the problem of smalltown blight and smalltown middle-income housing problems and smalltown housing shortages, and we have dealt with them under this and other programs in the State. I could not be more in agreement with Senator Clark that if you look in New York you will find every conceivable kind of problem, merely because of the size of its population and the size and geographical distribution of the State. We have an enormous port. We have lake ports. We have the manufacturing cities. We have the commercial cities, the financial centers, the rural areas, a tremendous college population and college towns. You could not think of anything we do not have. Senator CLARK. A lot of small family farms, too. Senator JAVITS. A tremendous number of those, because there is a lot of vegetable growing around the big cities. Dairying is essentially a small family enterprise, and that is the main farming enterprise in rural New York. Senator SPARKMAN. How long has this program been going on? Senator SPARKMAN. Did you say how many units have been built? Senator JAVITS. It is $200 million. We are going to have not only our commissioner of housing before you but also Senator Mitchell, the author of the program. Senator SPARKMAN. Has the program been fairly well distributed over the State as a whole? Senator JAVITS. Yes, it has been generally distributed throughout the State. It has been taken advantage of in many area of the State and is highly valued. Senator SPARKMAN. I look forward to the testimony from your housing commissioner, because I think this will be most helpful to us. Senator JAVITS. We could give you all sorts of administrative gimmicks and reasons and theories, but it seems to me the acid test is that the voters have gone to the polls not just the first time when perhaps people like myself could sell them on the idea-but a second time and gave the program a material increase the second time out. It certainly seems to me that is a confirmation of the fact that it is universally applied and universally valued. Senator CLARK. Senator, does that complete your comment on this bill? Senator JAVITS. Yes. Senator CLARK. I want to ask you a couple of questions, if you do not mind and if it is all right with the chairman. Mr. Mason was up here the other day, and I called his attention to his strong objections to this bill of yours and mine which were registered in a letter he wrote last September, with which I guess you are familiar. He said in response to my inquiry that he had not changed his opinion. He was still opposed to the bill, and he felt that the present satisfactory system of FHA which has insured and guaranteed private loans adequately took care of the needs of middle-income families. You and I do not agree with that, do we? Senator JAVITS. I should not have said I was through because I should have emphasized that point. The basic impression of the agency is that there is really no middleincome housing shortage, or at least not one that could not be met by established media. The facts absolutely fly in the face of any assertion. The fact is that the most crying need in the largest city in the country, New York City, and in other cities in my own State, is this very program for this very purpose. Our State program is just strained to the limit and cannot meet the need. It has been availed of tremendously, to the full limit of its capacity. Any civic agency that makes a report, whether it is a housing council in New York City or whether it is any upstate agency in my State which is doing the civic duty of analyzing the housing needs, never fails to come up with this No. 1 recommendation that we must do something about middleincome housing. The people who fall in that gap are out. Senator CLARK. Will Mr. Gaynor have some facts and figures to sustain your very strong assertion, which you probably agree of course is only an assertion? Senator JAVITS. I agree it is, but it is based upon my knowledge gained from our own State agencies, and so I am confident that they will back it up. Senator CLARK. And we will get some facts for the record from Mr. Gaynor? Senator JAVITS. Exactly. Senator CLARK. When Mr. Mason was here he also criticized the definition in our bill of the term "middle-income," and I wonder if you want to make a comment on that. I thought it was a pretty good definition. Senator JAVITS. I think it is a good definition, and I think it uses the same principle that we have used in public housing. And again I point out that we cannot live in a vacuum in these things. We cannot live in a vacuum of assuming what worked in public housing is not going to work in the middle-income housing approach, nor can you live in the vacuum of asserting that what was successful in New York is not going to be successful in the United States. Senator CLARK. Generally speaking, and not being precise, our definition of middle-income was individuals who had too much income to get into public housing and not enough income to acquire a safe, sanitary, decent dwelling in the private market. Senator JAVITS. Especially on a multiple-unit basis. That is a very important point of distinction, because we are talking about the families who must have multiple-unit housing and we are only affecting multiple-unit housing. This is a very different thing from a family moving out in rural or semirural areas and acquiring a very modestly priced private house. Senator CLARK. So actually what we are talking about is urban housing. Senator JAVITS. Exactly right, and urban housing especially for the family that has to have multiple-unit housing. Senator CLARK. Urban housing. What in the vernacular is known as apartments? Senator JAVITS. Exactly right. Senator CLARK. We had a witness up here yesterday, Mr. Robert E. Scott, representnig the National Association of Real Estate Boards, who was pretty critical of this bill of yours and mine. I would like to present to you a couple of his arguments and ask you to comment on them. He said that families of moderate income who would be the recipients of the benefits from this money raised unfair competition with home buyers. What do you think about the comment that this bill creates unfair competition with home buyers? Senator JAVITS. I do not see that it does at all. I think home buyers would still be serviced by the same programs which they are being serviced by today, and you would have a section of the popula tion which is not being served by the housing program not discriminated against. As a practical matter, if all the people of the United States support these programs, as they do, with the FHA guarantees which are guarantees of all the people-it seems highly unfair that one particular group of that total which needs housing more urgently than other groups should be disadvantaged by the denial of the opportunity which this would give them. I cannot see the argument. Senator CLARK. Actually, the people whom our bill is intended to benefit cannot become home buyers because they do not have the resources to buy a home. Is that not right? Senator JAVITs. Otherwise they would not qualify under our bill. Senator CLARK. So it seems to me that argument defeats itself. Senator JAVITS. They are just left out. Senator CLARK. Mr. Scott also referred to our bill as an unwarranted and unnecessary intrusion by the Federal Government through the tax exemption device into an area which private enterprise is adequately serving. You laugh and I laugh, but he made that seriously, and therefore let us make a serious reply in the record. Senator JAVITS. The serious reply, Senator Clark, is again that every indication which you see, every finding of every municipal group, always comes up with the fact that the big lack in all the housing programs is the failure to do anything for middle-income housing, people who must rent the apartments in multiple-unit dwellings. This is almost axiomatic. Every time you see a housing report from anywhere, by any civic group, this is the No. 1 point. Nothing is being done about it, and it seems to me that if in the face of all that you just categorically say, "Well, there is no need private enterprise is not filling," there is nothing one can do but smile. How can you argue with a man who insists on flying in the face of all the facts? Senator CLARK. I suggested to Mr. Scott that he was living in a dream world, but he did not agree. Senator JAVITS. I will say this, Senator Clark. I think you and I both feel the same way. I wish and pray they find a way to do it, whatever it might be, whether it is by prefab assembly or some other savings. I would be delighted. I think it would be just great. The fact is that years have now gone by and it has not been done, and it continues to be the crying, vacant point in all of these housing programs. Senator CLARK. Mr. Scott also commented that the tax exemption device in our bill would divert $2 billion, and he says, "ultimately more and more billions as the fascination of subsidy takes hold," from the funds available to the home buyer, who cannot compete with the tax exemption. What would be your comment on that? Senator JAVITS. Of course, the answer to that is middle-income housing would get some of the benefits of tax abatement, but that the values which result from the fact that there is land improvement and family and living improvement have by experience far outweighed the tax abatement benefits which have resulted. They are not getting tax exemption on building a church or a school. You are building a home which will pay some taxes, both directly and indirectly, and will in the aggregate pay more in taxes by virtue of these improvements than they would have paid if the condition were allowed to remain where it is. Senator CLARK. How about the argument that this bill will divert $2 billion from funds available to home buyers, presumably richer people? Do you think that is a sound argument? He says if we put out this proposal there is not enough mortgage money to go around and we will just take $2 billion out of the normal home buying market and give it to these people, whom he says do not need any help. Senator JAVITS. I think in the first place the amount involved is very marginal, because we are talking about selling bonds here, and selling bonds to investors who I do not believe have that kind of a limitation upon their investment capability. Certainly when you talk about $2 billion in terms of the aggregate amount of investors who buy municipal and housing bonds through the year you are talking about a very marginal sum. Senator CLARK. Even to the extent that it might take some slight amount of mortgage funds away, the social utility of the plan would justify it, would it not? Senator JAVITS. Again we come back to the point that these people have been left out. Senator CLARK. Mr. Scott also commented that our bill disregards the fact that existing homes represent great sources of housing for low-income families, and that a constant source of adequate housing is continually being made available as more and more families upgrade their housing standards. We referred to that as a trickle down theory, and he thinks that that is a little bit unfair. But the fact of the matter is that there is not anything like enough used housing coming on the market at prices these people can afford to pay to take care of their legitimate needs. Is that not right? Senator JAVITS. Since the end of World War II, which was 1945, and it is now 1960, or for 15 years, this radical shortage has been going on. Let us just argue with him empirically. If he were right, we would have seen it by now, and we have not. The fact is that the demand now in this area and the insufficiency in this area is greater now than it ever was before. So he cannot be right. It just does not work that way. Senator CLARK. Finally, he says one of the cosponsors of this bill in the Senate made a statement-I think he means you-upon introducing the measure and referred to the shocking gap represented by those whose incomes are too high for public housing and too low for FHA. "I respectfully suggest," says Mr. Scott, "that investigation might find more than a little overlap instead of this shocking gap." This is really the most shocking statement he made, and I wonder if you care to defend yourself. Senator JAVITS. I do not think I need to defend myself. Again, in terms of the theories which are involved, the fact is that when you get rents as we have in New York in the area of $40 to $50 a room, those apartments stand idle-many do-while families living in abysmally bad housing have to continue to live in it because there is not enough money to go around and pay that kind of rent. Here he is dealing in an area that I know. I understand it. I am with it every day. So he may say there is no shocking gap. In the first place, there is on the facts and figures, and in the second place there is on experience. Senator SPARKMAN. Thank you very much, Senator Javits. You have given us a very helpful presentation. (Senator Javits' prepared statement follows:) STATEMENT OF JACOB K. JAVITS, A U.S. SENATOR FROM THE STATE OF NEW YORK There is no material indication of our civilization more vital than housing. The space, comfort, and beauty of our housing distinguishes our social order from the Communist family living in a room and community kitchen housing even today more sharply and graphically than any other single factor. Federal expenditure and other assistance for housing is not inflationary. It stimulates private investment and adds tangibly to our national resources. Hence, housing legislation is one of the most vital and constructive Federal programs. There is no State in the Nation whose citizens are more deeply concerned with what the Congress does this year in regard to housing than New York. |