ought to be working hand in hand with the people who are going to provide houses. But they are off in different offices, and I have said to the coordinators in many cities "Why don't you get together? Aren't they on speaking terms yet? Aren't they in communication one with the other?" That is FHA, when you get FHA locally that is the picture I get, that it is somewhere off by itself, and it acts as if it were entirely independent and not just tied up with the other agencies that are planning, for instance, to acquire land, as a land-use authority. Sometimes you will find 10 agencies-I think I counted 10 in Chicago recently-and they have made some progress, but not very much. Mr. VANIK. That is all, Mr. Chairman. The CHAIRMAN. Monsignor O'Grady, we are glad to have your views, and I am sure the committee will consider them when we go into executive session. Monsignor O'GRADY. Thank you very much, Mr. Chairman. The CHAIRMAN. The committee will recess to reconvene tomorrow morning at 10 o'clock. (Whereupon, at 3:31 p. m., the committee adjourned.) Hon. BRENT SPENCE, CITY OF NEW YORK, OFFICE OF COMMITTEE ON SLUM CLEARANCE, Chairman, Banking and Currency Committee, DEAR CONGRESSMAN: Your committee now has under consideration the bill H. R. 5827 extending the National Housing Act. The committee on slum clearance strongly approves the slum-clearance and urban-renewals amendments in the bill providing for additional grant authorizations of $200 million per year for the years 1955 and 1956; the additional $100 million to be authorized at the discretion of the President; and the discretionary power authorizing the Administrator to distribute an additional $35 million of these appropriated moneys, if unallocated, to local public agencies in States where more than two-thirds of the 10 percent maximum allocation has been obligated. The present program in the city of New York, consisting of 10 projects now underway and 7 other projects in planning, is more comprehensive and further advanced than any other local program in the country and involves almost $600 million in Title I redevelopment work through private capital, as shown on the attached tabulation. Preliminary estimates indicate that the projects shown on the tabulation not covered by capital grant contracts or project reservations and further projects contemplated will require an additional $50 million in Federal Title I grants. You will note that of the $500 million provided for capital grants in the original Federal program that, although approximately $48 million was allocated to the city of New York, it was still essential for the city to apply for additional Federal funds to carry out its program. Of the additional $35 million on hand for this purpose, $15 million was allocated to this city. This provision has worked very well in the past and should be included in the new legislation in order to provide incentive and permit speedy and effective progress to be made in States which are pushing their programs faster. In regard to low-rent housing, a sound, substantial program is a necessary adjunct to the public and private work on redevelopment of slum areas in major cities. The 35,000 additional units per year provided in the bill for 1955 and 1956 are an absolute minimum from the point of view of need. We are in favor of the increase in maximum commitment amount for a single mortgage under the provisions of section 220 from $5 million to $50 million. The $5 million limitation is too small for slum clearance projects such as we are carrying out in the city of New York in view of the fact that nearly every project involves larger sums. Such an increase will permit more flexibility and effec tiveness in planning the construction and financing of large scale redevelopments as a unit. One other change in the FHA provisions should be made. We strongly recommend that specific inclusion be made in the provisions of section 220 to the effect that it is the intention that the mortgage commitments to be made thereunder by FHA should be made on the basis of actual and proven construction costs as shown through certified statements. The references to value as a measure of the mortgage commitment, which have created difficulties and obstacles in getting the Title I program underway and which have brought with it depressing factors arising out of the slum nature of the property, should be eliminated. These are part of a coordinated slum clearance program sponsored by the Federal Government and the local public agencies, and it was intended as a means of inducement and encouragement that the actual costs involved should be the measuring device for mortgage commitments. Certainly the slum nature of the property, which it is the purpose of the law to clear, should not be the yardstick for reducing these commitments and penalizing the sponsors. Because of the inclusion of the term "value" not a single project in the New York City Title I Slum Clearance program has received an FHA commitment despite the long period during which section 220 has been in effect. Interminable procedures and difficulties in promulgating regulations delayed FHA action in the Agency until very recently. We are now proceeding in New York with the local FHA offices under an agreement with Commissioner Mason in a way that we believe will finally produce actual FHA commitments as intended under section 220. Nevertheless, the fact is that prolonged delays have hurt the program not only in New York, but throughout the country. It is significant that in New York only the two projects which have received conventional financing, without FHA commitments, have proceeded to construction. On other projects, demolition and relocation have proceeded in substantial areas but actual construction has been held up because of the lack of FHA guaranties provided for by the law. If it were not for the recent agreement with Commissioner Mason, the program in New York would have been abandoned and a great measure of discredit and responsibility placed at the doorstep of the Federal Government. We believe that FHA commitments will now be issued without further redtape and delay, but there is still general skepticism about it. We shall appreciate having your record include this communication stating our position, and shall appear before your committee on May 18 as scheduled. Sincerely, ROBERT MOSES, Chairman. City of New York-Committee on Slum Clearance-Title I projects 1 Using 3.70 rate; old average at acquisition; new average, estimated. 2 Redevelopment Co. 3 Plus all Coliseum net revenue in excess of $1,225,000. THE UNITED STATES CONFERENCE OF MAYORS, CLERK, HOUSE COMMITTEE ON BANKING AND CURRENCY, House Office Building, Washington, D. C. DEAR SIR: I submit the resolution on housing unanimously approved on Saturday, May 21, in New York City at the annual conference of the United States Conference of Mayors. It would be appreciated if this resolution were placed in the record of the present hearings. I am Very truly yours, PAUL V. BETTERS, Executive Vice President. SLUM CLEARANCE, REDEVELOPMENT, AND URBAN RENEWAL Under the present housing act many cities are going forward on broad slum clearance, redevelopment, urban renewal, and housing programs. Blighted areas are being wiped out and redeveloped in accordance with sound city planning. There has also been notable progress in carrying out substandard housing rehabilitation projects. It is essential, therefore, that the present program be continued and we support the administration's proposed legislation to revise and amend existing policies. It is specifically recommended that the FHA phase of the total Federal program be integrated much more closely with redevelopment and urban renewal to the end that all potentially available private capital be utilized. It is further recommended that procedures now in effect be simplified and streamlined to enable more speedy consideration of project applications, and less delay in actual construction and rehabilitation work. Unanimously approved, 1955 annual conference of the United States Conference of Mayors, the Waldorf-Astoria, New York City, May 21, 1955. STATEMENT OF H. R. NORTHUP, EXECUTIVE VICE PRESIDENT OF NATIONAL RETAIL LUMBER DEALERS ASSOCIATION ON H. R. 5827 Mr. Chairman and members of the committee, I appreciate this opportunity to present to the committee the views of the members of the National Retail Lumber Dealers Association on H. R. 5827 pending before your committee. This bill would provide for the continuation of certain programs of the Housing and Home Finance Agency. GENERAL MORTGAGE INSURANCE AUTHORIZATION H. R. 5827 would increase the authorization for FHA mortgage insurance by $4 billion. This additional authorization is necessary to assure continuation of the FHA programs and should be approved. EXTENSION OF FHA TITLE I HOME REPAIR AND MODERNIZATION PROGRAM One very important provision of H. R. 5827 is the section which would extend the FHA title I home repair and modernization program for 5 years to July 1, 1960. This program has, over the last 20 years, provided a means of financing home repair for over 18 million homeowners. In 1954, over 12 million borrowers used property improvement loans insured by FHA. The title I program has had the effect of lowering and stabilizing financing charges on property improvement loans and has stimulated interest of lending institutions in this type of loan. Many families have found it necessary to expand their living quarters because of an increase in the size of their families or for other reasons. Others have used the program to prevent deterioration of their property. The title I program is a necessary adjunct to the urban renewal program for neighborhood conservation and improvement provided for in the Housing Act of 1954. Lumber and building material dealers have a vital interest in the title I program. The repair and modernization business is a major source of revenue to dealers which would not be available without adequate financing of major improvements. We, therefore, urge the continuation of this program. In your consideration of the continuation of the title I program, we suggest that thought be given to certain amendments which, in our opinion, would improve the program. The President's Advisory Committee on Government Housing Policies and Programs recommended that "Title I of the National Housing Act should be amended to permit the insurance of class 1 (a) loans to finance the modernization and repair of existing structures up to a maximum amount of $3,000, and up to a maximum term of 5 years and 32 days." The basis for this recommendation was that the present statutory limitation of $2,500 is not sufficient in terms of today's prices to finance home modernization operations while the present 3-year maximum term requires a debt service on larger loans that is beyond the ability of many families to carry. Last year the Congress amended the law to make title I available to new house owners only after a 6-months occupancy. We believe that your committee might find it advisable to reexamine this provision to determine (1) whether it accomplishes the purpose for which it was intended, and (2) whether it is unnecessarily discriminatory against new homeowners who, by reason of this restriction, are forced to finance home improvements through other more costly channels. This program has been in effect for 20 years and has become an accepted method of financing home repairs, as much as the mortgage insurance and guaranty programs of FHA and VA are now accepted by most lenders. We believe that it would provide more stability to the program and to home modernization if the title I program were made permanent instead of a periodical renewal of the program by legislation. Of We do not want to be misunderstood in making these recommendations. primary importance is the extension of the title I program. Our suggestions for amendments would however, we believe, improve the program. PUBLIC HOUSING In the past, an authorization for public housing has been on the statute books and the issue of the number of units to be approved has arisen each year under appropriation bills for the Public Housing Administration. Because the authorization existed, we are confident that many Congressmen supported the appropriations for a limited number of public-housing units only because they felt there was a moral obligation of the Government to provide such funds. Your committee, however, has a much greater problem to consider in connection with H. R. 5877. It is no longer a question of a moral obligation to provide funds for an authorized program. You, as a legislative committee, must decide whether or not additional authorizations should be granted to continue this program. Without such authorizations the programs ends. A thorough study of the public-housing program will, we are confident, convince your committee that a continuation of the program cannot be justified. Such a study will reveal that public housing is not serving the purpose for which it was intended; that it is more costly than anticipated by Congress; and that it is political housing. Without reiterating the arguments against public housing made in the past, we want to emphasize that your committee has a much greater responsibility than appropriations committee have had in the past. You must decide whether socialistic housing is to remain part of our Government policy or whether the program is to be terminated as an unsuccessful experiment. This association and its members urge your committee to permit the public housing program to terminate. Respectfully submitted. H. R. NORTHUP, Executive Vice President. STATEMENT OF ELEANOR M. HADLEY, WASHINGTON REPRESENTATIVE OF THE AMERICAN ASSOCIATION OF SOCIAL WORKERS ON H. R. 5827 AND H. R. 3919 Ever since passage of the Housing Act of 1949, we have all been fond of talking in terms of a decent home for every American family. Last year in his special housing message, President Eisenhower declared: "The development of conditions under which every American family can obtain good housing is a major objective of national policy. It is important for two reasons. |