become a sound home buyer. Until and unless that happens, it is better for him to be a tenant.

Also, we feel that, in meeting our immediate and very urgent problem of providing the type of housing that is necessary to relieve the kind of a pressure for shelter which exists, it is essential to emphasize especially rental housing, and particularly large-scale rental housing, because we are operating in the midst of a boom. We are in an extremely inflated period, and that type of provision can meet best and most economically the problem of the cost of home construction and also the speed with which good units, soundly constructed, can be provided.

We have a very special problem in that connection. It is not gratuitous on our part to emphasize the immediate need for rental housing. We do have information now, which we did not have when we visited with your committee before, showing that we have had a tremendous increase of doubling up. Instead of estimates we now have facts.

In April 1947, according to the census, we had 2,712,000 families counted as married couples but living with other families. Two million seven hundred and twelve thousand families living with other families constitutes an increase of 1,000,000 over 1945 in doubling up, despite the additional supply of housing, because of the large number of new families added.

We have here a strongly congested area of our community in which there are largely newly married couples, which are, to a very large extent, veterans who have married since their return fom the service and who are forced to live doubled up with other families in the most crowded part of our whole housing supply.

That, it seems to us, is one area in which it is imperative to provide an immediate solution, to provide aids. It cannot be left to the operation of the forces of the market itself for the provision of such housing as might come on the market as a result of completely unguided initiative on the part of the suppliers. It is an emergency area. It has to do with millions of children that are to come within the next 2 or 3 years, and with millions of lives whose whole future is affected by the kind of surroundings in which they live.

It is that area which emphasizes particularly why we need to have comprehensive legislation of this kind, which will aid in doing one thing: And that is to make sure that homes are provided not only for those with high incomes but also for those with low incomes. Because the families which are doubled up-the veterans, particularly, which would be given preference by this legislation-are the ones who will be served first, and without this legislation that service would not be provided.

If it is not done, we do have, under these present conditions, a situation which is pretty hopeless.

We have a great deal of difficulty in securing comprehensive data on the present costs of construction. There are limitations. It is not comprehensive. We need it. But the Bureau of Statistics so far has not been equipped with a sufficient budget to provide comprehensive knowledge on the housing costs in the United States that we all desperately need in order to know what the situation is and how to deal with it.

But the survey made by the Bureau of Labor Statistics for the fourth quarter of 1947, for individual cities-a very limited one-pro

vides a shocking picture of what construction costs are today. According to the Bureau of Labor Statistics, in the fourth quarter of 1947-half a year ago-average construction costs, exclusive of land, exclusive of architects' fees, exclusive of sales expenses, and exclusive of profit, of single-family dwelling units, was $9,800 in Boston, $9,300 in Chicago, $11,000 in New York, Newark, and Jersey City, $8,900 in San Francisco, and well over $10,000 in Washington.

Now, this is not the sales price. This is the average construction cost for the average dwelling unit that came on the market in the fall of 1947. If you provide the necessary mark-up in these communities for land, architects' fees, sales expenses, and profit at the present inflated rates at which all these mark-ups are occurring you will find that in these cities the range is not from $9,800 to $11,000 or $10,000, but is from $12,000 to $14,000 or $16,000 for these houses.

The great mass of the people who are so desperately in need of homes are not going to have them brought within their reach at those prices.

It may be said, Mr. Chairman, that because of this inflationary situation and because of the cost problem we ought not to attempt to deal with this kind of aids because their help will not be sufficient to overcome the pressure of inflation. Our feeling on that score is that this argument is of no value because, in the first place, the very aids which help increase the housing supply at the present time will greatly serve to check the rise in costs. Also, by spreading the supply from the high-income brackets and the high-cost brackets to the types of housing available at a lower cost, they certainly will provide the only available and ready means of having supply balanced with the demand and stabilizing the industry, which, without it, is riding for a tremendous crash.

So it is not only the long-range look at housing that we need-both locally and State-wide and federally, here, the kind of planning that stems from the local community that this legislation contemplatesbut also the immediate impact of the kind of a confidence that in each area of supply we are going to have, under a long-range plan, a large and stable supply of homes at that particular price level which is going to help establish the market over a longer period of time and avoid the disastrous consequences, not only to the home buyers and the tenants, but also to those who provide the homes-the home builders and the investors.

In the tables that I would like to leave with you there is some information which certainly will be helpful. I will not go through them in detail. They will be available for the committee and for the record. But it is basic information which brings up to date some of the things that I have mentioned and some additional factors that are very vital in the consideration of the background of this legislation.

There is only one thing that I would like to emphasize particularly, and that is that we have information now-for 1947-from the Bureau of the Census, on the increase in monthly rents paid from 1940 to 1947. In all tenant-occupied units, outside of the farms, in the nonfarm area, we had, during that period-since 1940 and up to 1947-an increase in the median monthly rent of over 40 percent.

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This is the first time that we have had evidence documenting the contention made all along by organized labor that the stabilization of rents, although effective with respect to the particular individual units during that wartime period, was not effective, because of these great shifts in migrations and the movement of families from one place to another and changes in tenancy, as has been shown by the index of rents in the cost of living index.

The 40-percent rise from 1940 to 1947, of course, has been followed by a further rise in rentals since last April because of the fact that the largest single rise occurred in the rental levels since that time. So drastic increases in rentals of this kind is something that does present to us a very important incentive for increase in the supply of rental housing, for the ability of families to get housing that will be brought within their reach.

Mr. NICHOLSON. Mr. Chairman, may I interrupt for a question? The CHAIRMAN. Mr. Nicholson.

Mr. NICHOLSON. Have you any statistics to show the number of people who were able to build houses previous to 1940 and who did not build them?

Mr. SHISHKIN. I do not understand what kind of statistics you are asking for.

Mr. NICHOLSON. For instance, I build a house, and the fellow next door is renting a house and makes twice as much money as I do, is much better able to build a house than I am-and yet he never builds one. He is always a renter. How many people are there like that in the United States?

Mr. SHISHKIN. I do not think there is any correlation between the number of people whose incomes

Mr. NICHOLSON. Well, there is correlation when they ask us to build houses for them when they are able to do it themselves, is there not?

Mr. SHISHKIN. They are asking whom to build houses for them? Mr. NICHOLSON. They are asking the Government to build houses, are they not?

Mr. SHISHKIN. I am not.

Mr. NICHOLSON. You are against the bill?

Mr. SHISHKIN. No; I am for the bill. That is not in the bill. Mr. NICHOLSON. Perhaps I am speaking about the wrong bill, then.

Mr. SHISHKIN. I am here to support S. 866, the whole impact of which is to provide for the construction of housing by private enterprise and which provides for a series of specific programs, initiated by the local governments with a degree of Federal aid, in order to make possible urban redevelopment, slum clearance, and a very small program of housing in which there is a small measure of Federal assistance but in which the housing is built by local housing authorities. It is not a bill to provide for Federal construction of Federal housing. We have studied this legislation very thoroughly, have participated in deliberations on this legislation, Mr. Chairman, very completely, and over a period of years there have been some modifications, there have been some improvements, and there have been some additions that we would not wholeheartedly support. There are many things which we think ought to be done, many provisions which we

think would improve the housing situation which are not in the bill, and it is for that reason that we feel that legislation of this kind is the essential first step in the direction of a minimum program.

The bill is important, because it provides a set of national housing goals, because it does not impose upon anyone an obligation to do just the kind of thing that this gentleman thinks it does-and it does not call upon the Government to go out and build housing anywhere, in any place, for anybody.

It provides entirely and all the way through that the local initiative would be there. It provides a prior consideration to private enterprise for the construction of everything. There is no provision for any construction of homes-not only in the area in which there is a feasibility, at the current, present delivery on the market, at the time by the private enterprise-and in addition there is a 20-percent gap between any housing which is currently provided by private enterprise on the market and anything that may be provided with public aid or through the utilization of private facilities.

We think those safeguards are important. We are for those safeguards, because we feel that the essential thing here is to strengthen private enterprise, in order to supplement it by devices of this kind, because unless that is done we feel very strongly that we will revert inevitably to the housing market in which housing is handed down only from the rich to the middle-income group and to the poor and in which the increased discontent on the part of the people who are driven into the slums because of that proposal will undermine our entire system. It is a situation in which I think America today is thoroughly mobilized in its support for this kind of a program.

We have the recommendations that come from all quarters. The legislation, after careful study, has been supported by labor all the way through. It is supported by religious organizations. We had recommendations for it from the Council of Economic Advisers.

I have just had the privilege of participating in a conference which, while it does not recommend legislation, has dealt with the fate of the American family-perhaps the most representative conference that I have seen in operation in America at any time. One hundred and twenty-five voluntary organizations representing veterans' organizations, welfare organizations, religious organizations of all kinds, and the whole range of them, considered housing and conceived of this program as the basic essential.

We had a special housing committee which was widely representative in the conference, which has adopted the report of the housing committee, strongly endorsing a program of this kind.

The CHAIRMAN. Mr. Shishkin, have you any recommendations with respect to how we can accelerate the building of multiple-dwelling units, large apartment houses, in the metropolitan areas? Mr. SHISHKIN. In the metropolitan areas?

The CHAIRMAN. Yes.

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Mr. SHISHKIN. It seems to me that the combined effect of the visions of this bill will be extremely helpful. Not only the yield insurance title, in itself, will prove helpful, but also the special aids under the provisions of this bill will undoubtedly help a great deal to accelerate rental housing construction.

The CHAIRMAN. What particular special aids? We are told, with respect to yield insurance, that it might not be used. It has not been used up to the present time. I think perhaps it is a rather innocuous provision, harmless perhaps, but of doubtful benefit. In addition to that, what provisions are you speaking of?

Mr. SHISHKIN. On yield insurance, Mr. Chairman, I have discussed this particular provision with a number of representatives of the insurance companies, and my own impression, from the direct discussions with them, is that there is a great deal of interest in that type of property and that kind of an aid to them. There is also some in the savings banks, institutions which are anxious to take advantage of it.

The CHAIRMAN. Are there practical provisions, other than that, in the bill that you think would encourage the building of multipledwelling units in the large cities?

Mr. SHISHKIN. I think the amendment of the National Housing Act which gives special aids to rental housing, and particularly the provision that would permit

The CHAIRMAN. Title I of 866?

Mr. SHISHKIN. Yes; and particularly the special provision for cooperative housing, which has been going on at a greatly accelerated rate even without aids, will make possible rental housing construction particularly of the type of which the veterans will take advantage. The CHAIRMAN. You have reference to the bill which was reported out of the House Veterans Affairs Committee the other day?

Mr. SHISHKIN. No; I am referring to the provisions of this bill. By providing differentials in incentives to cooperative housing, it gives special consideration to the possibility of having such projects initiated. In case of cooperative projects of this kind the guaranty applies to the extent of 95 percent instead of 90 percent. It is that type of aid which is provided.

The CHAIRMAN. Do you think the key to multiple-dwelling construction is largely in title VI?

Mr. SHISHKIN. As far as the particular features of title VI are concerned, Mr. Chairman, we feel that title VI, as a wartime provision and a wartime incentive

The CHAIRMAN. I am referring now to title VI of the Federal Housing Act.

Mr. SHISHKIN. Yes. Under the National Housing Act, title VI has largely served its purpose. We do not think that it should be abruptly ended. We agree entirely with Mr. Foley in the view that the transition should be accomplished as rapidly as possible, but that we should revert to the permanent title as amended by S. 866. In other words, we feel

The CHAIRMAN. In what way was S. 866 amended, other than the amendment we agreed upon and sent over to the Senate about 6 weeks ago, and upon which I believe you testified?

I understand that there is no substantial difference, if it can be called substantial, between the bill which we passed 6 weeks ago and sent to the Senate 2 weeks before they ever had hearings on this bill. The difference between the provisions in S. 866 and the bill which the House already passed being that they reduced the ceiling on the interest from 5 percent to 41/2 percent.