skilled building trades worker in this country has I think increased sharply in the last 10 years, because there has been no input at the bottom, and men are being lost to the industry.

They find jobs indoors, if you will, because they don't want to take another chance in an industry in which the job risk is so great. If we could develop a sustained national commitment to a high level of housing volume, I think we can develop the labor supply, we can improve the technology, we can develop the management and I think the building industry is sufficiently resourceful to cope with these problems.

Mr. WEINER. One other thing that we thought might be significant that we would like to leave with you, that is a study of the significance of the home building industry in the American economy.

Senator RIBICOFF. Without objection it will be made part of the record.

(The information referred to follows:)

EXHIBIT 237

[Special Report of the National Association of Home Builders, Economic Department] SIGNIFICANCE OF HOME BUILDING IN THE AMERICAN ECONOMY

The impact of new residential construction is a major force in, and spreads throughout, the entire American economic structure. For example, last year's one and one-half million new dwelling units generated in construction activity alone approximately $21 billion. When you add to this the impact of expenditures which are directly related to the construction of new dwellings, such as schools, community facilities, service industries, durable goods expenditures and the like, the total directly related impact of housing expenditures amounts to $35 billion, or approximately $1.00 in every $18.00 of the total amount of Gross National Product activity last year.

Each new home built provides about two man years of employment, half offsite, a little more than half on-site. Last year's housing volume thus provided close to three million jobs. In addition, what the economists call the multiplier effect of such expenditures is also enormous. For example, it has been calculated that the multiplier effect of construction activity as it spreads through the economy in economic terms is about double the direct dollar expenditures. The thousands of products used in new dwellings come from every area of the country and affect virtually every industry. What follows is a short summary of this impact:

Single family units

Construction cost (structure alone).—One million single family homes represent a total direct construction expenditure of about $16 billion, or approximately $16,000 per house.1 In terms of labor this means 3,300 man hours of employment per home, or approximately two million man years of employment in the single family housing sector alone."

Site improvement

In addition to home construction the site improvement costs are estimated to be $2,200 per home, or a contribution of $2.2 billion to the Gross National Product.

Multifamily units

Construction cost.-The construction cost in 1964 of the multifamily structures alone represents at least an additional $5 billion contribution to the Gross National Product.

The amount spent on site improvements of multifamily units approached $1 billion in 1964.

1 Based on Bureau of the Census C-25 Series, Sales Housing, February 1965.

2 Bureau of Labor Statistics, Labor and Material Requirements for Private One-Family House Construction, June 1964.

3 Housing and Home Finance Agency, 16th Annual Report, Table III-35, p. 100. Modified to new sales price of new homes as published by the Bureau of the Census, C-25 Series.

Community development

The building of new homes stimulates other types of construction activity. They mean new or bigger schools, more churches, better highways, community facilities, expansion of public utilities, etc. A conservative estimate of these related construction activities would be $3,000 per single family and $1,000 per multifamily units, or an additional $4 billion added to the Gross National Product.

Additional direct expenditures

Upon completion of a home and its purchase, and additional $1,000 per unit is generated by the service industries. This would include the commission the builder would pay to the real estate broker, the settlement costs the purchaser would pay the title company, a loan placement fee which would be paid to the local lending institution, fee paid to an appraiser, land surveyor, and real estate transfer taxes paid to both the local and Federal governments.5

Durable goods and furnishings

A new unit, whether single family or an apartment, necessitates the purchase of new appliances, rugs, drapes and curtains, garden plants and equipment, furniture, and for some, maybe even a new car. New home owners also spend about $200 the first year on improvements. The total expenditure is estimated to be approximately $3,000 per unit, or $3 billion additional goods and services in our economy."

Related service expenditures

During the first year the average home owner will spend an additional $2,000: Real estate taxes on the average new house being built are approximately $400 a year. Interest on an $18,000 mortgage would be an additional $1,020. Insurance for fire, liability, theft, etc., would be between $60.00 and $100.00 a year.' Heat and utilities an additional $360, maintenance and repair $150.

The multiplier effect

Measuring the direct expenditures resulting from the construction of one and one-half million housing units each year, a total demand for goods and services of approximately $35 billion is generated.

The employment of these goods and services and the wages paid generate additional purchasing power with the resultant stimulation of virtually every sector of the economy. Conservative estimates of this "multiplier" factor suggest that these billions spent on new construction itself generates at least an equal amount of other economic activity, thus bringing the total economic impact to $70 billion. High level of home building essential to the economy

New housing construction generates not only demand for on- and off-site construction activity, the services of local banking, insurance and real estate agencies, but the manufacturer has a large stake in the home building market. Each home provides a market for better than 3,000 different items.

Any change in new construction volume, though it may be slight, would be felt by thousands of factories, national distributors, and their local suppliers. In addition, millions of workers in the industrial community far removed from the construction site would, likewise, be affected.

According to a recent study by the Bureau of Labor Statistics, each $1,000 of single-family home construction price generates a demand for 72 man hours of employment on-site, 35 man hours in transportation, trade and related services, 38 man hours in the manufacturing stage, and 12 man hours off-site construction activity. In addition to these "primary" man hours, they show an additional 47 "secondary" man hours. Translating this into employment statistics we find that for each $1,000 of construction activity, there are 204 man hours of em ployment generated." A slowdown in construction activity, therefore, would have far-reaching effects on the economy of any community and, in fact, the nation as a whole.

4 M. L. Colean, R. J. Saulnier, Economic Impact of the Construction of 100,000 Houses. Chicago The United States Savings and Loan League.

5 NAHB Economics Department estimate

Colean, Saulnier, op. cit., and NAHB Economics Department estimate.

Based on Bureau of the Census, Sales Housing, C-25 Series; Housing and Home Finance Agency; American Bankers Association U.S. Savings and Loan League."

Survey of Current Business, and Bureau of the Census, C-25 Series, Upkeep and Improvements.

Estimate by NAHB Economics Department. based on Colean and Saulnier, op. cit. 10 Bureau of Labor Statistics, Labor and Material Requirements for Private One-Family House Construction, Bulletin No. 1404, June 1964, p .5.

[The Evening Star, Monday, May 1, 1967]

YOUR MONEY'S WORTH

VITAL FIGURES: 500,000 HOMES

By Sylvia Porter

Those of us who believe our economy will be in an upswing in the final months of 1967 are counting heavily on a substantial revival in the building of houses— to, say, a seasonally adjusted annual rate of 1,500,000 or so, a full 500,000 above the annual rate at the start of the year.

What would an additional 500,000 houses mean? Why is this one statistic so important in our prediction of a general upturn? Assuming it's valid to claim that the good health of the homebuilding industry is crucial to the good health of the entire economy, what makes the claim valid?

The first paragraph in this column is deliberately written in the bafflegab commonplace in economics reporting. It cries out for translation—and here I go. Homebuilding is at the top of America's major industries. It ranks second only to food and food processing in dollar totals. This one industry provides close to 3 million jobs a year, with each new house creating about two man years of employment, half off-site, half on-site.

3,000 ITEMS PER HOUSE

The structure itself is just the shell. Into each new house go more than 3,000 different items. A new house, therefore, spurs activity in hundreds of thousands of factories the nation over, creates work for hundreds of thousands of suppliers from coast to coast, employs the services of bankers, insurance companies, real estate agencies, public utilities.

Each new house generates spending for new appliances, drapes and curtains, garden plants and equipment, furniture-and perhaps a new car too. The National Association of Home Builders estimates this spending at $3,000 per unit.

Each new house, upon completion and purchase, also generates spending for directly related service industries. This total, the NAHB calculates, comes to about $1,000 per unit.

This, too, is just the beginning. When new houses are built, other significant construction always follows for new or bigger schools, for more churches, for new community facilities, for expanded public utilities, for better highways-and on it goes. Few industries have as enormous a "multiplier effect" as homebuilding. As construction activity spreads throughout the economy, every $1 of direct expenditure becomes $2.

EFFECT ON OTHER INDUSTRIES

Now even more specifically, what would an addition of 500,000 houses to the early 1967 building rate mean to other industries, and therefore, to employers and employes all over our country? Here are estimates of the National Association of Home Builders:

This number of houses would require 425 million square feet of sheathing or insulation; 425 million square feet of veneers or siding; 100 million square feet of wood; 35 million square feet of asbestos; 5 million square feet of stucco and blocks; 2.5 million square feet of particle board; 32.5 million square feet of aluminum; 2 million square feet of plastic and 150 million square feet of glass and mirrors.

This total would necessitate 12.5 million gallons of paint; 3.7 billion bricks; 3 billion board feet of structural lumber; 5 million door units.

The 500,000 houses would involve 500,000 ranges; 500,000 refrigerators; 250.000 dishwashers; 250,000 disposal units; 375,000 hot water heaters; 450,000 heating units; 625,000 bath tubs; 900.000 lavatories; 900,000 water closets; 100,000 central air conditioning units: 375,000 exhaust fans.

Surely this is enough to dramatize the point! Now, triple each statistic and you'll have an idea of what 1,500,000 houses a year means. Translate every figure for what's involved on a single new house into terms of 1,500,000 houses and you'll have an inkling of the "multiplier" effect.

And now you know why we are counting so heavily on a revival of homebuilding to help put our economy back into an uptrend.

Senator RIBICOFF. I want to thank you very much. I think this was a very valuable statement. Your entire statement will go into the record as read.

(The statement referred to follows:)

STATEMENT OF LEON N. WEINER, PRESIDENT, NATIONAL ASSOCIATION OF HOME BUILDERS

Mr. Chairman and Members of the Committee:

My name is Leon N. Weiner. I am a home builder from the city of Wilmington, Delaware. I appear here this morning as President of the National Association of Home Builders.

With me today are Dr. Nathaniel H. Rogg, Executive Vice President of our Association, and Herbert S. Colton, General Counsel. We also have available Joseph B. McGrath, Staff Vice President and Legislative Counsel, M. Ray Niblack, Staff Vice President and National Housing Center Director, and our economist, Dr. Michael Sumichrast.

I wish to express to you our appreciation for this opportunity to testify in your hearings on the relationship of the home building industry to the Federal role in urban affairs.

THE NATIONAL ASSOCIATION OF HOME BUILDERS

For an understanding of the changing character of the home building industry, an industry which has changed more in the past 20 years than in the previous 50, let me briefly tell you about our trade association.

It is a trade association that is barely 25 years old. It has grown from a one-man, one-office operation to a staff of over 150, headquartered in Washington at the National Housing Center at 1625 L Street, N.W.

In addition, in nearby Rockville, Maryland, we have a Construction Research Laboratory which is staffed by some 20 engineers and other personnel.

In the past 10 years, about 15 million housing units have been built in the United States. In the past 20 years, a total of about 32 million units have been constructed.

We estimate that our membership, which currently is at a level of slightly over 45,000 builders and associates, accounted for the construction of about 70 percent of that housing.

And, in these figures, I must stress that we encompass the builders of apartments as well as single family houses.

Our staff includes professionals not only in construction technology, but in land planning, in design, in economics, in zoning, in codes, in taxes, in the ebb and flow of the market place and in paramount problem of our times-the environment of man and how to better it.

I am here primarily to discuss the housing of our people, some of the history and some of the problems and prospects as we look ahead. There are many myths and many misconceptions about these matters.

Very large population growth is anticipated in the next twenty years. Most of the studies clearly indicate that most of this population growth will have to be accommodated in structures built on land not now used for housing. In short, it will be suburban rather than central city.

From 1950 to 1960, according to the Bureau of the Census, there was a 24,000,000 increase in metropolitan population. Over 95 percent of this increase took place in the suburban areas beyond the city limits. Between 1960 and 1980 it is expected that 80 percent of the total increase in population will again take place in suburban areas rather than central cities.

This emphasizes a very serious aspect of the problem. While we must, of course, be concerned with the central cores of our cities and the need for rebuilding them so that they are fit places to live, we must also be concerned with the immense problem of housing the great masses of our people in the years ahead in areas outside the central cores.

Production and the cost of new housing in the United States, of course, is relevant to the current problem of the central cities and to future urban growth. The home building industry, as it is now constituted and as it is likely to expand, is an integral factor in planning that future.