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ness of the financial fraternity to participate in solving the problem, I earnestly recommend to your committee favorable consideration of the amendments to the National Housing Act reflected in H. R. 6164. How certain national Housing Act sections would read if H. R. 6164 were adopted.

No. 1: Section 207 (a):

(1) The term "mortgage" means a first mortgage on real estate in fee simple, or on the interest of either the lessor or lessee thereof (a) under a lease for not less than 99 years which is renewable or (b) under a lease having a period of not less than 50 years to run from the date the mortgage was executed, upon which there is located or upon which there is to be constructed a building or buildings designed principally for residential use or upon which there is located or to be constructed facilities for trailer coach mobile dwellings; and the term "first mortgage" means such classes of first liens as are commonly given to secure advances, including but not being limited to advances during construction, on, or the unpaid purchase price of, real estate under the laws of the State in which the real estate is located, together with the credit instrument or instruments, if any, secured hereby, and may be in the form of trust mortgages or mortgage indentures or deeds of trust securing notes, bonds, or other credit instruments. No. 2. Section 207 (a):

(6) The term "rental housing" means housing, the occupancy of which is permitted by the owner thereof in consideration of the payment of agreed charges, whether or not, by the terms of the agreement, such payment over a period of time will entitle the occupant to the ownership of the premises, or space in a trailer court or park properly arranged and equipped to accommodate trailer coach mobile dwellings. No. 3. Section 207 (c):

(2) not to exceed 80 per centum of the estimated value of the property or project (when the proposed improvements are completed): Provided, That except with respect to a mortgage executed by a mortgagor coming within the provisions of paragraph numbered (b) (1) of this section or a mortgage on a trailer court or park, such mortgage shall not exceed the amount which the Commissioner estimates will be the cost of the completed physical improvements on the property or project exclusive of public utilities and streets and organization and legal expenses; and

No. 4. Section 207 (c):

(3) not to exceed, for such part of such property or project as may be attributable to dwelling use, $2,000 per room (or $7,200 per family unit if the number of rooms in such property or project is less than four per family unit) or not to exceed $1,000 per space or $300,000 per mortgage for trailer courts or parks; Provided, That as to projects to consist of elevator-type structures, the Commissioner may, in his discretion, increase the dollar amount limitation of $2,000 per room to not to exceed $2,400 per room and the dollar amount limitation of $7,200 per family unit to not to exceed $7,500 per family unit, as the case may be, to compensate for the higher costs incident to the construction of elevator-type structures of sound standards of construction and design.

That completes my statement, Mr. Chairman.

Mr. BROWN (presiding). Do members desire to interrogate the witness further?

Mr. O'HARA. Mr. Chairman, I have one question.

Mr. BROWN. Mr. O'Hara.

Mr. O'HARA. The proposal covered in the bill before us now has been acted upon by the committee in the other body.

Mr. LUCAS. Mr. O'Hara, I am very happy that you asked that question. The same amendments to the Housing Act were presented by Senator Sparkman through the Banking and Currency Committee of the United States Senate. Hearings have been held on those amendments. The same group that was here today came before the Banking and Currency Committee and testified, and while I do not think it is official yet, I think I can say to you that the subcommittee recommended unanimous passage, and so did the full committee.

There are some complications with respect to technical aspects of other phases of the bill, but insofar as the amendments we presented are concerned, the Banking Committee unanimously endorsed them. I think I am correct on that.

Mr. O'HARA. That is the action on these proposed amendments was unanimous?

Mr. LUCAS. That is my understanding.

Mr. BROWN. Dr. Talle.

Mr. TALLE. Senator Lucas, I wonder about school facilities, hospital, and services of the medical profession, whether they would be sought elsewhere, or whether provision could be made in such a setup for those services?

Mr. LUCAS. I would think that would depend on the facilities in each and every community. I should think that that would be a factor to be taken into consideration by the FHA when they finally make the loan upon the particular plot, where the applicant has applied for it.

Those are things that would all have to be taken into serious consideration, school facilities and hospital facilities. Obviously, there would be no difference in the establishment of a trailer park than there would be in the establishment of a subdivision, for instance, on real estate, where the FHA makes these loans.

I presume that they take those things into consideration before they make a loan on a subdivision.

Mr. TALLE. Then there is another service that would be important, namely, the mail service.

Mr. LUCAS. Yes.

Mr. TALLE. Those things should be taken into account. It may be assumed that a good many of the occupants would be in the younger age range, so that the occupants would have children. I would think

So.

Mr. LUCAS. I would like to have Mr. Wilson make a comment on that observation, Congressman.

Mr. WILSON. We have made surveys from year to year across the country, and oddly enough the figure seems to stand almost constant that the number of individuals dwelling in a mobile home is 2.9. The number of children will be comparatively large at a young age today, depending on where the park is if it is in an area, say, outside of Chicago but as they get to a school age they begin to decrease. The couple has more children, and they move into a permanent-type home, they are a little more settled. They may come back when they are 40 to 45 years old, but as an instance, this particular park that I men

tioned outside of Des Planes-I happen to be acquainted with it because I did a zoning study on it-there are 80 units there. There are only 25 children in the 80 units, of which 12 are of school age and of the 12 I think about 6 are public school and the remaining 4 are private or parochial school.

As they begin to get on into that age couples look for larger quarters in many cases. It is a thing we are not the least bit ashamed of. It is a quite natural social development. So you don't have a great number of children in your 12 to 16 age group, or 10 to 16 age group in these developments. Your percentages are roughly this from year to year, and some of these gentlemen may have conducted later surveys, but in general through the years it has run about 25 percent to 35 percent for military personnel, then you run in the neighborhood of 25 to 35 percent young marrieds, then you have a middle group in construction activities, field construction groups, that are many times a little older.

Our retirement group has been increasing in the last 3 years. For a while after the war it got as low as 4 to 6 percent, and now has gone up into the neighborhood of 10 percent-people who are retired. Of course, that is predominantly in Florida, and places like that, although in this park outside of Chicago I think you will find about 15 percent retired people. So it is almost the same as a cross-section of America in every park.

We had the University of Pennsylvania and the University of Princeton conduct a survey in Bucks County, Pa., 2 years after the steel industry went in there. There was quite a housing problem then, and the report was published by the Housing and Home Finance Agency. One of the most important sentences in that report, at the conclusion of the survey, was that the only difference they could find between the trailer park in Bucks County, Pa., and the average American community was that the income was a little bit larger in the trailer park. Otherwise, they said the cross-section of the population was the same, their likes and dislikes were the same, their desires to go to church were the same. The only thing the income was larger in the trailer park.

Mr. TALLE. As I understand it, the lien on real estate and underground facilities would rest with, say, one company, instead of with the individual units; is that right? There wouldn't be a separate lien on each unit?

Mr. WILSON. There is no relationship between the individual unit and the lien on the mobile home park. The individual unit is owned by the man living in it, and he has a mortgage with a bank or a finance company. He is merely parked there and paying $25, $30, or $35 a month for the privilege of parking in that park, and using its facilities. Mr. LUCAS. Were you talking about the space?

Mr. TALLE. Yes, I was wondering if the rent he pays serves to retire the blanket mortgage on the entire tract of land.

Mr. LUCAS. Yes, sir.

Mr. TALLE. Thank you, Mr. Chairman.

Mr. BROWN. Senator Lucas, we are very happy to have your splendid statement, as well as the statements of your associates here. We are always glad to have you with us. We all recognize the fine work you did when you were a Member of the House, and, of course, as a Member of the Senate.

You may stand aside now and we will call the next witness. Mr. LUCAS. Before you do that, I thank you for that statement, and again I want to express my sincere and deep appreciation for the interest that has been taken in our problem. We honestly believe that we have a very meritorious cause, that it will be a tremendous factor in aiding the housing economy of the Nation if this bill could go through.

Mr. BROWN. Thank you.

We will now hear from Mr. Ralph Kaul, representing the Trailer Coach Association.

You may proceed, Mr. Kaul.

STATEMENT OF RALPH KAUL, REPRESENTING THE TRAILER COACH ASSOCIATION

Mr. KAUL. Mr. Chairman and members of the committee, my name is Ralph Kaul and I am president of the Kaul Co., 1025 Connecticut Avenue, Washington, D. C., which advises and represents the Trailer Coach Association, 607 South Hobart Boulevard, Los Angeles, Calif., on matters of national interest and legislation. The Trailer Coach Association represents all segments of the industry, manufacturers, suppliers, dealers, and park operators, mainly in 14 western states. At the present time the Trailer Coach Association has 542 members, including 320 mobile home trailer parks.

The amendment to include mobile trailer parks under title II of the National Housing Act, H. R. 6164, has the support of the entire industry. We join with the Mobile Home Dealers National Association and the Mobile Home Manufacturers Association in supporting this amendment, and have prepared a detailed statement of our views. In order to conserve the time of the committee I would like to submit the statement for the record and simply enumerate in 2 minutes or less 5 points in favor of such legislation.

Also, time permitting, I would like to attempt to answer the questions raised by Mr. Davidson and Mr. McDonough.

1. The trailer park is not only the preferred housing for some 2 million people, it is the only solution to family housing, and home ownership, to many thousands of people in migratory occupations. I refer particularly to servicemen, construction, and farm workers.

2. The mobile home has become permanent year-around housing for more than 90 percent of the mobile homeowners. That the mobilehome park is here to stay is attested by the fact that 60 percent of new trailers are bought by people that now own one. The vacation trailers are a small part of the present-day market.

3. The mobile home is an ideal housing solution for an increasing number of retired people whose needs have been largely overlooked in housing legislation. The mobile home has the advantage for these people of low cost, minimum household chores, and mobility.

4. The quality of trailer parks will improve if they are included in the National Housing Act. Not only will the operators be able to obtain the funds for better construction, but FHA can establish standards which will make the trailer park equal in every respect to the suburban garden apartment with landscaping, recreation areas, and complete utilities. It will take time, but this amendment will raise the quality of all parks.

5. This amendment, we believe, will not require additional appropriations and it will not cost the taxpayer a cent. In our opinion the insurance premiums which FHA will receive will very substantially exceed losses. The addition and modernization each year is estimated at about $50 million. Even if one-third of this amount required FHA insurance, it would have a negligible effect on the authorizations under title II.

Now, Mr. Chairman, with regard to the question raised by Mr. McDonough on the convertibility of mobile-home parks for housing purposes, I think there are a number of parks which have been developed along this line, and we could furnish the committee with examples of this type, but we must not overlook the fact that parks are located on arterial highways, frequently between large and growing cities, and there is, in many of these parks, development of hotels and a variety of commercial establishments which would very considerably appreciate the value of the real estate covered by a mortgage for a mobile-home trailer park.

And so I think that it should not be limited in any way to convertibility to other housing.

Secondly, Dr. Talle raised the question as to schools, mail, and other community facilities. The trailer parks are located, again, on the fringe of the cities, where the children are picked up by school buses and go to the schools in that area.

The question of the mail is handled by the operators of the park, in our experience, where the mail is delivered to the central office of the mobile home park, and delivered by the management to the

tenants.

With regard to other community facilities, in most cases parks are located by the investors with careful regard to that point.

The third point raised by Mr. Davidson, as to the balance sheetin addition to representing the Trailer Coach Association, I happen to be on the board of directors of one of the largest trailer park operating companies in the United States. I would say that we calculate, for a profit of between 10 and 12 percent.

The reason we have run into reluctance, I believe, on the part of the banks, to extend the amount of credit we need, is that banks are reluctant to invest in areas that are outside the developed, central part of the city, and I think that if we can be brought under the FHA mortgage insurance that will greatly help us in bringing backing into this field.

In conclusion, Mr. Chairman, on behalf of the many thousands of families owning trailer coach mobile homes, and the industry that serves them, the Trailer Coach Association strongly urges that the committee consider and pass the proposed amendment.

Thank you, Mr. Chairman, for permitting us to be heard. Our association will be pleased to compile and furnish any further information that the committee may need.

(The detailed statement of Mr. Kaul is as follows:)

DETAILED STATEMENT PREPARED BY THE KAUL Co. FOR THE TRAILER COACH ASSOCIATION IN SUPPORT OF H. R. 6164

At the present time in the United States there are more than 2 million occupants of trailer coach mobile homes. The Trailer Coach Association joins with the Mobile Home Manufacturers Association and the Mobile Home Dealers National Association in urging that the benefits of the National Housing Act be extended

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