A further extremely desirable feature of S. 3503 is that it directly and for the first time, involves the Federal Reserve System in assuming a minimal amount of responsibility for helping to house the citizens of this country. For too long the FED has refused to accept any responsibility for alleviating the unequal burden that falls upon housing in periods of tight money. S. 3503 would give housing, the prime victim of the Federal Reserve's tight money policies, a means of withstanding, to some extent, the heavy impact of these policies. CONCLUSION In recent years housing has shared a smaller and smaller segment of our Gross National Product. From a high of approximately 62% in 1950, it has dropped to about 32% today. It is our firm belief, as enunciated by the Commission on Mortgage Interest Rates, that an additional 1% of the Gross National Product should be allocated to hous ng. This can only be accomplished if this Nation consciously decides to do so. This entails a continuous recognition by the Congress of the need to follow through on its commitments of 1968, as well as a complete willingness on the part of the Administration to use fully and imaginatively the authorities given it by the Congress. The proposals now before this Committee will not by themselves solve the present housing crisis or meet the future housing needs of the Nation. However, they are principal components in the broad, correlated efforts necessary to give to the housing of our people the priority it deserves. We urge prompt and favorable action on these bills. On the point of prompt consideration, I would like to state that, for any action of Congress to be helpful to the 1970 building season, it must happen quickly. There is not sufficient time to await consideration of the Administration's general housing legislation proposals. It is our firm belief that the Congress must act within the next 30 days to really help housing this year. Thank you for this opportunity to present our views. NATIONAL ASSOCIATION OF HOME BUILDERS OF THE UNITED STATES 1625 L STREET, N. W., WASHINGTON, D. C. 20036 THE WHITE HOUSE Statement By The President Yesterday I met with Secretary Romney, Louis Barba, and officials of the National Association of Home Builders to discuss the crisis situation we are facing in the housing of our people. The continuing decline in housing production, the outflow of funds from savings institutions supporting the housing market, and the drying up of traditional mortgage sources are contributing to a serious housing shortage which is of grave concern to our national well being. Housing and the industry which provides it are bearing a disproportionate burden of both current inflationary pressures and the antiinflation measures instituted to restore price stability. As a result, a major national resource-the productive capability of our private home building industry to meet our national housing needs-is being greatly threatened. The decline in housing production must and will be stopped. The private sector and all levels of government must take the steps necessary to assure that the nation's housing needs are more fully met now. There are no easy answers to the housing problem, and a full solution will require time. Extraordinary and unprecedented steps have already been taken. These include extensive direct support to the mortgage market through the Federal National Mortgage Association and the Federal Home Loan Bank Board. In addition, the Department of Housing and Urban Development has authorized issuance of mortgage-backed securities fully guaranteed by the government and has released $1,150 million of funds to provide special assistance in the financing of housing production for low- and mod. erate-income families. The need now is to go beyond these steps-to change basic attitudes and reexamine old patterns of activity-so that we can reach more quickly the full solution we seek. The first step is for all sectors of our economy-business, labor, consumers, and all levels of government-to be fully aware of the nature of this crisis, and for each of them to address itself vigorously within its sphere of responsibility toward adequate solutions. The need to regain early control over inflation is paramount, and voluntary steps to restrain unnecessary spending can play a vital role. In this connection, I have firmly committed the federal government to do its part. In order to maintain a surplus in the budget, I have cut federal spending to the minimum possible levels this year and next. Some needed federal programs simply will have to be postponed, so that we live within our means. This will help free resources for housing. I urge the private sector to follow this example by also postponing avoidable expenditures and increasing savings. Some time ago I cautioned business and labor against continuing to base price and wage decisions on the expectation of continued inflation. Those who do are bound to lose. The sooner this is realized the better off they-and the nation as a whole-will be. Lack of mortgage money is perhaps one of the most pressing immediate restraints on housing. Needed housing must and will be financed and built. All financial institutions-commercial banks, mutual savings banks, savings and loan associations, life insurance companies, pension funds, and trust funds—should recognize the investment opportunities that will exist in this field over the years ahead. They should seek now to move affirmatively into a better position to capitalize on these opportunities. I pledge that this Administration will take every possible step to solve this most serious housing problem consistent with the overriding need to contain inflation. The housing of our people is and must be a top national priority. 42-120 0-70- -17 January 21, 1970 |