private control, the Secretary of HUD is urged to use his statutory regulatory controls over FNMA to assure that FNMA continues to carry out to the fullest extent its responsibility to provide an adequate secondary market for federally backed mortgages.

A number of other institutional changes are necessary to adjust to the fact that there have been great changes in the savings patterns of Americans.

• In recent months the savings and loan system, chief reliance of the home building industry, experienced a greater net outflow than at any other time in the 35-year history of the present system. Meanwhile, forced savings systems (pension and profit sharing trusts) grow by leaps and bounds, but they invest almost exclusively in the stock and bond markets the savings of the very workers who need housing most. By appropriate revision of the favorable tax treatment they now enjoy, pension trusts should be required to invest in residential mortgages a fair share of the people's savings entrusted to them.

• The competitive position of savings institutions must be strengthened by such actions as providing tax exemption on a stated portion of annual interest on deposits in thrift institutions.

• We commend the Federal Home Loan Bank Board for the high level of support provided by the board to member institutions. This must be continued.

• A secondary market for conventional mortgages must be provided, either through FNMA or the Federal Home Loan Bank system, or both.

• Mortgage-backed securities of the marketable bond type, authorized 18 months ago by the 1968 Housing Act, should be made effective immediately.

The recently announced GNMA "Tandem Plan" should be broadened to include all FNMA eligible mortgages which fall within GNMA purchase limits.

We call on the Congress to investigate the rapacious practicenow standard in insurance company lending and spreading to other institutions (including pension funds)—of demanding a share of property income in addition to astronomical interest and fees. Whether or not it is a device to protect lenders against long-term inflation, the practice is thoroughly and intrinsically unsound. Unless checked, it will lead to widespread foreclosures at the first substantial economic downturn-with serious adverse consequences to developers, to lending institutions and those entrusting their savings to them, and, most importantly, to the general public.

Taxes

The Tax Reform Act of 1969—although less destructive than the original House version-will further greatly diminish the real incentive to invest in housing and income properties needed to support community development. As a direct and inevitable result, the plight of the millions of average American families-unable to afford higher rents but not eligible for subsidy-will become even more desperate.

Technology and Housing

For years NAHB has sought, with considerable success, to improve housing design and materials and to reduce costs through its own Research Foundation and by support of federal research programs.

The industry's present problems are not technological but economic a lack of mortgage money, exclusionary and restrictive zoning practices, lack of community facilities, excessive and unnecessary development requirements, suffocatingly high local and increasing federal taxes. As documented in the Kaiser report from the highly regarded President's Committee on Urban Housing, none of these will be solved by a "systems" approach.

We are deeply concerned lest our major problems be neglected by over-emphasis upon efforts to discover an instant technological solution to a highly complex situation.

Manpower and Productivity

We pledge our support to the newly established Construction Industry Collective Bargaining Commission which has been charged with developing programs to expand industry's manpower training opportunities and to influence more reasonable wage settlements in the public interest.

The serious shortage of skilled craftsmen in all construction trades, aggravated by the prolonged failure of government to foster an adequate manpower training program, has inevitably resulted in enormous increases in wage rates. Unsupported by little, if any, increase in productivity, current construction wage increases add to an already dangerous inflation. Even if the economy is restored to stability, these increases will continue to add automatically to higher housing costs.

The rigid and restrictive apprenticeship requirements imposed by construction trade unions artificially and unnecessarily increase the shortage of trained construction mechanics while members of minority groups and others seek jobs for which they could be easily trained.

We call upon government to start now to encourage training of

the hundreds of thousands of mechanics who will be needed if America is to achieve its housing goals.

Because of the present imbalance at the bargaining table, the Congress should require mandatory arbitration of economic issues in the construction industry when requested by either party to the bargaining.

The prevailing wage requirements on certain federally assisted rental housing serve needlessly to increase costs and resultant rents. They should be abolished.

Resources for the Future

Increasing housing production to the levels needed would raise the possibility of severe strain on the supply of materials.

A commission should be established to conduct a continuing review of resource requirements and supplies in the housing industry, to provide information to the industry, and to recommend policy to assure an adequate supply of essential materials and products.

The crisis early in 1969 in the price and supply of lumber and plywood should not be permitted to recur when housing production takes an upturn. We urge quick enactment of the pending National Forest Timber Conservation and Management Act and revision and restructuring of the management and sale policies of the Forest Service.

sive national land use policy thwart continuing efforts toward rational and sensible land use.

The cost of developed land increased by an average of almost 12 percent each year during the past decade; the cost of raw land has soared at an even higher rate in the last five years. Rising

land cost deprives millions of citizens of decent housing in reasonable proximity to where they earn their livelihoods.

We support federal financial and technical assistance and other incentives to promote state and local laws, codes, and ordinances responsive to sound and comprehensive land planning and use, and to assist appropriate local provision of utilities and community facilities for urban growth.

We urge state and local communities to abandon exclusionary zoning and subdivision regulations which distort the cost of land, reduce the supply, raise housing costs, and effectively bar lower and middle income families from housing.

We urge local communities to be responsive to the development patterns of neighboring communities and jurisdictions and to work together on area-wide or regional comprehensive planning, not in competition with or without reference to each other.

We urge the federal government to use powers already available to it to encourage local communities to engage in sounder land use practices.

We urge state governments to be more active in the formulation of policies to encourage more efficient use of land within their boundaries and thus to spur more needed housing production.

As a matter of prime necessity we also urge a more vigorous and coordinated program of federal, state, and local governments in the creation of efficient public transportation as an effective means of opening more land for housing and making land more accessible to jobs.