For, there is no State more heavily committed to so many Federal housing programs, and in addition, a major effort is being made upstate and downstate in New York to rehabilitate residential and industrial areas with the State and localities already strained financially under the program. Of high priority importance in a major housing bill is provision for meeting the housing needs of some of our 15 million families in the middle-income bracket. To my mind, this is the most critical housing gap in our entire national housing picture and the Federal Government should delay no longer in recognizing its responsibility to act. Middle-income families are not eligible for low rent public housing even though they may have been dislocated from previous living quarters by a public housing project. Many of these families cannot afford the homes that private industry can provide; nor can they pay the higher rents in most urban renewal projects which in New York City are approaching $50 a room in monthly rent. Despite the new construction generated by national housing legislation, there are very few urban areas in the Nation satisfied with the rate of progress being made in renovating or replacing the millions of substandard units now occupied by low- and middle-income families. Of these, 650,000 are located in New York State. An estimated 280,000 households in New York City occupy substandard units and the number of legitimate applications for public housing on file right now in New York City is in excess of the total number of State, city, and Federal low-rent units in existence. The pressure for decent housing in the low- and middle-income range is building up unavoidably. Each year, about half a million couples in their early twenties marry and establish homes; that figure is expected to double in the next generation. At the same time, unmarried or elderly persons are establishing new households at the rate of 400,000 annually. As more and more middle-income families come face to face with a "No Vacancy" sign, many will be forced to rent substandard housing. We believe that as high as 20 percent of the middle third of the U.S. population in terms of income do live in such circumstances. More leadership must be forthcoming from the Congress in my opinion if the kind of direct action demanded by the situation is to be launched. In the past, housing has been dealt with often on a piecemeal basis, but the time is at hand when if a year goes by without a major housing bill, emergency legislation has to be rushed through at the next session. This was certainly the case in 1959 after the 1958 housing bill got sidetracked. If major legislation in this field is not enacted in 1960, some important programs are going to be in near desperate straits by 1961. If an omnibus housing measure should be reported out this session, it is imperative that it include new authorization for the college and nurse-intern housing program, along with the provision that a State can receive loans under it amounting to 12 percent of the total loan fund, so important to States like New York and California. Maximum relocation payments to individuals and businesses under urban renewal should be raised, while the program's extender fund should be doubled to $200 million, and the cost of multiple rental and cooperative housing units should be reduced by permitting a reduction in the present FHA mortgage insurance premium of one-half of 1 percent to one-fourth of 1 percent. To spearhead a national drive to provide decent housing for the 3 million middle-income families presently living in substandard quarters, I have introduced along with Senator Joseph Clark of Pennsylvania, S. 1342, a bill to establish a limited profit corporation for middle income housing. The Federal Corporation set up under it would have the authority to issue U.S. Government guaranteed bonds up to $500 million the first year and a maximum of $1.5 billion thereafter. Its funds would be loaned to private builders and cooperators at the rate at which the Corporation borrowed the funds plus its own cost of operation in the form of 50-year mortgages for 90 percent of housing development costs. The remaining 10 percent would be supplied by the builders or cooperators, either as capital investment or downpayment. It is estimated that 150,000 housing units would be built with average room rents between $20 and $25, a reasonable rate within the reach of the average middle-income family. Builders applying for loan funds would have to meet the key requirement that their profits on the investment be limited to 6 percent and that the Corporation approve their rent or carrying charge for the dwelling unit. I believe this program would directly stimulate State and local government assistance in the same area, and at little or no cost to them since it would give preference to housing which is granted some local tax aid, assistance in the assembling of land and the use of urban renewal sites. The concept for such a Federal corporation was developed from the highly successful New York State Limited Profit Corporation, twice approved by voters in public referendums since it was set up in 1955. Later this week this subcommittee will hear testimony from those New Yorkers who wrote the law and those who now administer this middle-income housing program, and they can detail the operations of this approach in my State which is seeking to remedy its middle-income housing shortage. Regarding the departmental comment on S. 1342 that a limited profit corporation would supplant existing FHA and VA private loan programs and use public funds for those who can get good housing anyway, I am in thorough disagreement with what must have been the basic premise for such a statement-that there is no middle-income housing shortage. The facts overwhelmingly support the position that there is an acute shortage. And, furthermore, I see no possibility for supplanting existing programs since the combination of profit limits, the requirement that there be a gap between what existing programs can fill and the multiple-unit character of this program rule out the possibility of such a conflict. Beyond that is the point that present programs do not meet the housing needs-it is our duty to find a program that will. I can also see no validity in the argument that such a program would present severe administrative problems. There are no major administrative requirements in the bill which have not already been handled by New York State in its almost parallel program or, in most cases, by the Federal low-rent housing program. Estimates of need, market surveys, income analyses, etc., are constantly being made by the Public Housing Administration, and the same methods often the same data-would be used for a Federal limited profit corporation for middle-income housing. I should also like to call the subcommittee's attention to a three-part housing measure whose inclusion in major housing bill would have a marked impact on increasing the overall middle-income housing supply. The first section of the bill would permit the lowering of mortgage insurance premium rates for FHA housing on multiple and cooperative units. Not only would it result in savings to co-op owners and mean lower rental costs of about $30 annually, but reducing the mortgage insurance requirements from one-half of 1 percent to one-fourth of 1 percent, thus lowering construction costs, should lead to the building of additional middle-income multiple units. The public interest in this provision is running high, as this subcommittee knows, for I have already turned over to its staff more than 1,850 messages of support originally sent to me. Much of the mail is from co-op owners who are well aware that under the major FHA program, which also has a one-half of 1 percent requirement, refunds following mortgage repayment are quite commonplace. There is no more risk in insuring multiple units and generally the administrative costs would be less. In its report, the agency indicates it would not object to having discretionary authority to reduce these premiums and that position coincides with the intent of my bill-the Administrator may reduce the premium rate to a minimum of one-half of 1 percent or it may be set at threeeighths of 1 percent or kept at one-half of 1 percent, if that seems advisable. The second provision, to raise the urban renewal extender fund for all States from $100 million to $200 million, is particularly important to States like New York, Illinois, and Pennsylvania which have integrated urban renewal projects into massive rehabilitation programs aimed at cutting out urban blight. The agency reports that New York will have dipped into the extender fund for $62 million by June of this year, and this fact raises much concern as to whether the agency will approve new applications from New York with over 60 percent of the extender fund already committed to projects there. My bill calls for $200 million on the theory that this amount would eliminate in the foreseeable future the possibility of an artificial lid being imposed on requests from the States participating most vigorously in the program, irrespective of their needs and comparative priorities elsewhere. It would permit consideration of applications from New York and other large States on their merits alone. The final section of S. 3042 would increase maximum relocation payments to a $500 maximum for individuals and families and $5,000 for businesses under the urban-renewal program. The present equivalent payments of $200 and $3,000 respectively are unrealistic in many large cities in New York State where removal and relocation costs have risen more than 40 percent in some areas in the last couple of years. In both cases, I propose the increase over the present amounts should be treated as are regular urban-renewal project costs with the Federal Government paying two-thirds and the locality one-third. The contention that such an increase is unnecessary because the present limit is rarely reached is at least reassuring on one count-it indicates that if we do raise the relocation payment maximum, it will have an insignificant impact on overall program cost while at the same time it will help ease the most serious dislocation problems of these families who are arbitrarily injured by the urban-renewal program. The maximum payment to businesses is equally vulnerable to the charge of insufficiency. In some cases, the relocation costs many thousands of dollars, and it is impossible to adequately recompense many small businessmen for the loss of neighborhood goodwill built up for many years: More equitable relocation payments should also cut the length of time required to move tenants from urban-renewal sites and thus pave the way for a speedup in slum clearance projects. I consider it vitally important that the Congress act affirmatively at this session to increase the college housing loan authorization which also aids in the construction of nurse-intern housing. To date, there is an enormous backlog of $228 million in applications pending, including more than $19.5 million from New York colleges and $652,000 for nurse-intern housing. College and university administrators must look ahead to 1970 when the number of students seeking accommodations on campuses will be more than double those living there now, approaching the 2-million mark. Many are already facing a campus housing emergency and the prompt infusion of $250 million into the existing program, provided for in my bill, S. 2911, and S. 2950 introduced by Senators Fulbright and Sparkman (which would make another $250 million available in fiscal 1962) seems minimal, if a campus housing crisis is to be prevented. All of us are aware of the administration's alternative approach to transfer the program over to the Department of Health, Education, and Welfare, but its legislative proposal has not been advanced in the Labor and Public Welfare Committee. Considering the urgent college construction needs of today, I hope the administration will eventually support action by this committee recommending a transfusion of new funds this year. I was very happy to note that there are favorable reports from both the HHFA and HEW on S. 2912, introduced by myself and Senator Keating, to raise from 10 percent to 122 percent the total loan funds which can be allocated for college and nurse-intern construction in any one State. New York State educates one student out of every nine attending a U.S. institution of higher learning while it is eligible to receive only $1 out of every $10 under this program and construction costs run 20 percent higher in the East for the type of living, study, cafeteria, and student-union facilities involved. Should the Congress approve $250 million in new funds under the existing program, enough funds would become available to take care of the existing backlog of requests already pending from New York State institutions-more than $20 million-so that such an authorization for 1 year only is admittedly a stopgap measure and the desirability of a permanent program in light of future needs is increasingly obvious. Finally, I should like to refer briefly to S. 1680 as it points up the need for much closer coordination between the civil-defense requirements of urban populations and Federal housing programs concentrated in so many big cities. The bill I have introduced would encourage the construction of shelter facilities in urban-renewal projects by assigning their cost to the Federal Government, whereas such cost is now counted as part of the localities' one-third project cost. New York State, under Governor Rockefeller's vigorous leadership, has aroused national interest in the survival facilities which must exist in case of nuclear attack and Lt. Gen. C. R. Hubener, New York State director of civil defense, will testify fully on this situation. It would be shortsighted if the Federal, State, and local governments together strive to reduce the Nation's serious housing shortage for low- and middle-income groups and engage in extensive urban rehabilitation without making proper provision for the construction of shelters, which might have to become temporary homes for millions of families should apartment houses, homes, and all else be destroyed or gravely endangered. Senator SPARKMAN. Is Mr. Fry here? Will you come around, sir? Mr. Fry, just have a seat. STATEMENT OF LLOYD A. FRY, CHAIRMAN OF THE BOARD, LLOYD A. FRY ROOFING CO., SUMMIT, ILL. Mr. FRY. Mr. Chairman and members of the Subcommittee on Housing, my name is Lloyd A. Fry. I am the founder, chairman of the board, and chief executive officer of the Lloyd A. Fry Roofing Co., with its general offices in Summit, Ill. I appreciate very much your invitation to appear before you to testify on the subject of the Federal Housing Administration's "Minimum Property Standards," as they relate to roofs, particularly asphalt shingles. I submit for your consideration my qualifications to testify and establish facts on the subject. Next July 1, I will have completed 46 years of continuous participation entirely in the asphalt roofing industry. The first 17 years I served other concerns, operating in practically all capacities, from sales representative to vice president, in charge of all operations. As of July 1, 1931, I established my own asphalt roofing manufacturing business, with very limited capital, in a leased plant at Lockport, Ill. That business failed. I established the present business with borrowed capital as of July 1, 1933. Today we operate 19 asphalt roofing plants, supplemented by 12 felt mills, located in 21 cities throughout the United States. We have purchased three new sites for construction of additional facilities, scheduled for construction in 1960, and to be in operation during the spring of 1961. It is academic, of course, to reestablish the very simple fact that every building, including every element used in its construction, is entirely dependent upon and is only as good as its roof. Certainly, without a roof there would not be a building. The life of any building, therefore, is determined by its roof performance. When specifications are established for construction of any building, the roof, being far the most important single element, should have preference and first consideration over all other elements utilized. When specifications, or minimum property standards, were established by the Federal Housing Administration, they knowingly ignored the basic importance of the roof, specifically insofar as asphalt shingles are concerned, and, despite being fully informed of that fact, have failed and refused to consider any correction. Senator CLARK. How long ago, Mr. Fry, was that determination made? Mr. FRY. Seven years ago. The Federal Housing Administration's established minimum property standards for asphalt shingles require only the cheapest, low quality asphalt shingle that is produced. This FHA "Minimum Property Standard" shingle has a maximum life expectancy of 10 years, and the average life in the South and Southwest is only 7 to 8 years. The FHA is fully informed of the fact that the maximum written guarantee given by any manufacturer on the FHA minimum property standard 210-pound asphalt strip shingle is for 10 years. The FHA is likewise fully aware that their minimum property standards do not require any guarantee from any manufacturer for roof performance, although available. Thus, we have the FHA, a Government agency, authorized to use Government credit to guarantee payment of mortgages on buildings for periods of 20 years and longer, permitting the use of 210-pound asphalt strip shingle roofs that carry a maximum guarantee of only 10 years. Senator SPARKMAN. Mr. Fry, may I interrupt you there. What evidence do you have that the 210-pound FHA minimum property shingle will last only 10 years or less? Mr. FRY. Senator, I brought with me conclusive evidence. Mr. FRY. I would like to present that at the conclusion of my statement. Senator SPARKMAN. I am going to have to leave, and I am afraid I will not be here when you finish. I wonder if you could give us that right now. Mr. FRY. Yes, sir. Senator SPARKMAN. Is that the 210-pound shingle that you have there? Mr. FRY. Yes, 210-pound. Senator SPARKMAN. What does that mean? Mr. FRY. It weighs 210 pounds per 100 square feet of area. This is conclusive evidence directly under Government supervision, if you please. It is not an exception. There are thousands of houses that have roofs that look like this. Senator SPARKMAN. Did that come off a house? Mr. FRY. It came off a house that was roofed 61⁄2 years ago in Jacksonville, N.C., under the Navy, and is the FHA minimum property standard shingle. Senator SPARKMAN. What makes it pinch up like this? Mr. FRY. The induction of moisture that is permitted at this area. Everybody recognizes these curling factors. The water will not penetrate this, but here is the difficulty. Senator SPARKMAN. Is this covered up? Mr. FRY. I will show you. The shingle goes over like this. The water drains down here, and here is the standard of the shingle that is acceptable under FHA. This one is the standard. It has been deteriorated and downgraded, and this is the life expectancy of the roof that is acceptable by the FHA. That meets every requirement of FHA. Senator SPARKMAN. What is the thin one you show there? Mr. FRY. That is the same. Senator SPARKMAN. You show the new shingle. Mr. FRY. I say that is the standard, the original standard. one. Mr. FRY. It is much thinner. Senator SPARKMAN. Is this comparable to that? 55869-60-25 |